Selling Metrics Matter and Make a Difference
When it comes to measuring the success of a business, sales metrics are an essential tool.
Two of the most important sales metrics are units per transaction (UPT) and average sale. In this article, we will discuss what these metrics are and how they can be used to improve your business.
Units per transaction (UPT) is a sales metric that measures the average number of items that customers purchase in any given transaction. The higher the UPT, the more items customers are purchasing for every visit. Retailers often make UPT a key performance indicator (KPI) as it is an excellent way to measure customer engagement and satisfaction. A basic unit per transaction (UPT) is calculated by dividing the number of items purchased by the number of transactions for the period.
Average sale is another important sales metric that measures the average amount of money spent by customers in any given transaction. It is calculated by dividing the total revenue generated by the number of transactions for the period.
Both UPT and average sale can be used to improve your business in several ways. They should be run daily, weekly , and aggregated monthly and they are critical measurements to coach (and track) your selling staff. If transactions are down, then the average sale needs to increase to cover lost business. Additionally, if transactions are down week over week, then a third metric to review is your conversion rate. The conversion rate is a measurement of your traffic to buying customers.
The above chart shows how small incremental changes over the course of the year can have a huge impact on revenue growth.
The changes above are compared to the last 12 months.
Increasing units per transaction, even as small as indicated in the chart from 1.34 to 1.5 on the same number of transactions, increases revenue by $140,000.
Increasing average sale by a little less than $9.00 per item improves revenue on the same number of transactions by $181,875
Increase both UPT’s slightly and average sale on the same number of transactions and revenue growth is $274,000
This is a huge change that occurs by paying attention and coaching every day and every week on each and every transaction. (Note: the results are assuming the same traffic and same number of transactions).
In conclusion, sales metrics such as UPT and average sale are essential tools for measuring the success of your business. By tracking these metrics, you can identify areas where your business is doing well and areas where it needs improvement. You can then use this information to make data-driven decisions that will help you grow your business over time.
If you would like to discuss this further or would like to receive a copy of the chart for your own what-ifs, contact me or the Management One Customer Success team. We are always happy to discuss your results and share solutions for you and your indie retail business.
Onwards, and Upwards,
Marc Weiss - Co-founder, Management One