June 22, 2015
Good data provide good insights. A useful measurement can be a single number that indicates the health of a days work (or any other unit of time). For example, in a c-store the inside sales traffic is key. Those spending money inside is even better. Many operators use the measure of coffee sales to judge inside traffic that drives sales. Once you find a key measurement, it is easy to assess progress and drive your staff’s actions. Hence, it makes sense to determine “what’s your coffee cup?”
Thermometers
When managing a business that is multi-faceted, fast moving and volatile, people who have been in their business a long time tend to select one statistic that will act as their thermometer to relay the health of their company. It could be something that may seem highly unlikely that they would base their business decisions on because no text book would ever suggest it. Obviously you cannot rely on this for the overall management of your company. However, just as a thermometer reading will indicate there is an issue, you would not rely on the temperature of your child to indicate their entire health. You will investigate further if there is a high temperature This concept is the same.
Simple Tracking
For instance, there is a C-Store company that monitors the number of coffee cups sold each day. They know that if at a certain level, their store traffic was at acceptable levels and therefore their other goals would be met as well. They would only be alarmed when the number of cups sold reached a number below that which they noted as the optimum level.
Another C-Store company measures for sales comparisons between different periods of time. As long as the sales were the same or more as the previous year at that time, they weren’t concerned. And yet another company watches projected sales. They like how it will let them know if numbers are not be met, while there is still time to do something about it.
Find the Right One
There are so many indicators as to how a business is doing, but typically there are one or two that will relay how things are going before it begins to impact the CEO’s reports. Great managers will find their key indicator and watch it. This is not to say that other analytics aren’t viewed but these are the stats that they ask about while passing someone in a hall, or walking into a store, and are probably thinking about while making their coffee first thing in the morning. Finding that one statistic may not be as hard as you think.
- What statistics can easily be correlated to store performance?
- What else is impacted by changes in this statistic?
- Does a small change impact lots of other things?
- Are bottom line numbers follow this measurement?
So books may not be recommending you monitor coffee cups, but an experienced manager might. It will tell them how much traffic they are getting. Of course, you can correlate other breakfast foods sales on early shift to coffee. Conversely, if the gas sales are high, but coffee cups are down, perhaps the station is not clean. Maybe low coffee indicates house-cleaning is in order. Obviously there are other factors so as it needs to be in that store or, pricing may need to come down based on a nearby competitor’s price.
It can tell you if people are considering you as a fast food breakfast alternative to indicate how your sales may be doing in breakfast foods. The list goes on and on.
Linkage is Key
When the numbers is below the level you want, you look at these other things and fix them. . It may not be an obvious statistic, but it one that can relay a lot of possibilities of where failure can occur. If you take the time to answer these four questions in order to find your coffee cup, your life may become a whole lot easier when comes to assessing performance.
Spend some time with your data. Data Analytics can help you sort through your key results. Find your coffee cup. It can make it easier to have your cashiers impact the bottom line. Perhaps you too want to be the manager who is always asked how you reach your goals each month. You can simply say, “We sold enough coffee”.