Beyond Traffic Counting to Customer Service Analysis

If you were to ask most specialty retailers if they gave great service, they would look at you and say, “Of course, that is what we are known for!” Yet, if asked if they can quantify this, in other words, prove it, they often cannot. I believe that you cannot prove something if you cannot measure it, nor can you change something if you cannot measure it.

Traffic counters have been around for over 25 years and are used by many retailers to calculate conversion rate, the number of shoppers that actually buy. This is also called close rate.

Traffic counters will not only give you the conversion rate for shoppers in the store (the formula is total traffic divided by total transactions) but it will also give you a more important number called your Customer Service Ratio (CSR). This ratio is simply the desired customer to staff ratio, how many customers one staff member can serve, divided by the number of customers in a specific time frame, often calculated as a 15 minute period.

First, ask yourself the question. How many customers can one of my sales associates serve simultaneously? The obvious and “perfect” answer is one. But the real world answer is closer to two or even three. In most cases a good sales associate can balance three customers at the same time, but this is the maximum and more than three would surely mean that the customers are not getting anywhere near good service. So, the question becomes, how many times last Saturday did you exceed this desired customer to staff ratio? For example if we agree with the customer to staff ratio as being 3, which means that each staff member can adequately serve no more than 3 customers simultaneously (some stores set this number at 2 or even 1) and if you have three staff members working and your traffic counter tells you that between 11:00 am and 11:15 am you had 15 customers in the store, you had a Customer Service Ratio of 5 to 1 instead of the 3 to 1 that you wanted during this fifteen minute period.

Obviously if you had 5 customers for every sales associate during this time there were likely many customers who had questions about items and could not get answers, long lineups at the cash register, as well as customers who simply walked out and were never served at all.

You know that if you are shopping and have a question, if you cannot get the answer to that question, many times you just put the item back on the shelf and leave. The same thing happens when we have a CSR that exceeds 3 for longer than five or ten minutes. Yes, there are times when a group will “rush” the store and it would not make financial sense to flood the store with additional staff. Indeed, in most cases it would not even be possible. In these cases we have to balance the potential of the group that came in against the cost of staffing for that brief period. For example, if it was a group of tourists or runners prior to an event, the likelihood is low that they would be purchasing running shoes or high involvement merchandise. It would be much more likely that they are buying event t-shirts or socks or other last minute accessory items. In that case I would simply make sure that I had as much self serve merchandise available as possible in an easy to select display and put most of my staff on POS to simply ring up items. But if I discover that there are times on Saturday and Sunday that I consistently exceed my CSR by more than 50%, then I need to add more staff at these times.
Here is an example of the math of CSR
• Traffic counts for last Saturday indicated that in 5 fifteen minute periods I had 24 customers in the store
• I had three staff working during each of these 15 minute periods
• My staff to customer ratio was 8 to 1 vs. the desired 3 to 1 during these five periods
• My customer loss was the 24 that were there minus the 9 that my staff could adequately serve which leaves 15 customers in each of the 5 periods who did not get served properly or at all
• This totals 75 customers who were not served during the total five periods
• I would likely not have been able to sell all 75 as my normal conversion rate is 38%
• My average transaction is $68.00
• So my loss was 75 times $68.00 times 38% or $1,938 in potential lost sales
• What would two more staff have cost for the day?

Obviously, if the majority of your customers shop as couples, you can decrease this number, but your conversion rate would already take this into account. And in addition, you can often sell a couple items for both of them.

Do your own math, take your own measure, calculate what potential business you are losing by not having sufficient staff when required, and assess your real customer service level. Install traffic counters and test the logic for six months. I bet that you will notice a marked increase in sales and customer satisfaction if there were times when your CSR exceeded your target and you responded by staffing properly. Good luck and good counting!

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