Growing sales and anticipating trends is a challenge for many marketing managers. To make matters more complicated, they also need to prove the success of their strategies to stakeholders.
However, if you run an effective analysis of your retail marketing numbers, it becomes much easier to innovate in the business and present the progress of these initiatives to the board. That’s exactly why, in this article, we’ll show you how to analyze results accurately.
We’ll also talk about the benefits that mapping these numbers can bring to your company. So, want to better understand what your retail marketing results are telling you? Keep reading to find out!
So, how do you analyze the results of your strategies?
The biggest retail chains on the market are constantly focused on increasing sales — or recovering from a drop caused by some specific factor. The big question is: which technique should you use to measure the data and make your strategies succeed?
The answer is quite simple: define metrics!
Metrics are measures used to track the performance of marketing initiatives, whether to quantify trends, business variables, consumer behavior, or other results that need to be analyzed.
Now that you’re up to speed on the subject, let’s look at some important metrics for your business!
What are the key metrics for retail marketing?
First of all, it’s worth pointing out that there’s a wide variety of metrics, and each one suits a particular type of business. In this post, since the topic is retail marketing, we’ll focus on metrics related to sales and customer relationships.
Here are the 4 we’ve selected:
1. ROI (return on investment)
Although ROI can be calculated in several ways, in retail marketing it helps you understand the return generated by each of your investments in your stores — in other words, whether the numbers add up at the POS.
To calculate ROI, divide revenue by total marketing investment. If you invested R$10,000.00 and generated R$100,000.00 in revenue, for example, your ROI was R$10.00.
That is, for every 1 real invested, the company earned R$10.00 — which means 10% of revenue went to marketing. And if we look at this result in the context of retail (which typically sets aside between 1% and 8% of revenue for marketing investments), we can see that the number needs to improve.
With that in mind, remember that ROI can be used to analyze your entire strategy or even each individual marketing initiative. That way, you’ll know exactly where to invest more and what needs to be cut to boost results.
2. CAC (customer acquisition cost)
In general terms, CAC is the metric used to find out how much the company spends to win each new customer. In the specific case of retail marketing, a few variables influence this figure. Among them:
- seasonality;
- the level of market competition;
- brand equity.
In addition, it’s essential for marketing professionals to know how to analyze which factors help lower the acquisition cost per customer. This makes it much easier to prove that their initiatives are increasing sales and reducing costs for the business — in other words, that marketing is a source of revenue, not an expense.
3. Conversion Rate
Conversion rate is a metric widely used by e-commerce businesses. However, it can also be applied to retail marketing to analyze the relationship between the number of completed sales and the number of customers who visited the POS and showed interest in the products.
The main goal of this metric is to measure the efficiency of both the POS and the sales team, so you can define strategies to attract and retain potential customers who haven’t yet made a purchase from your company.
4. Revenue per POS
A benchmark analysis, combined with revenue per POS, helps you understand the effectiveness of each of the company’s brick-and-mortar stores compared to competing retail locations.
If the marketing professional finds that the metric is below the market average, for example, this indicates that they can take one of the following measures:
- step up marketing strategies to make the business stand out — with proper planning, of course;
- close the POS — which operates full-time — during off-peak hours (this measure may require laying off staff).
The second option may seem drastic, but if the metric shows that your POS is below the market average, it’s a sign that your competitors are being more effective than you. So something needs to be done to cut your losses.
Knowing how to analyze metrics is important, but it won’t do much good if you don’t know the benefits they can bring to your company, right? That’s why we’ll cover this topic in the next section.
What kinds of benefits can you get from this data?
All the metrics covered here help improve your marketing strategy and support your results presentations to stakeholders. Now, let’s see how they can benefit the marketing department and the company as a whole:
- they help increase marketing revenue;
- they help reduce the cost of attracting customers;
- they strengthen the company against its competitors;
- they increase customer conversion efficiency;
- they help uncover insights to deliver relevant experiences to consumers;
- they support customer retention.
With all this in mind, tap into the potential of each of these metrics and understand what they reveal about what’s working and what isn’t in your marketing management! By developing effective strategies, you can fix gaps in sales processes, brand positioning, and customer service at the POS.
So, did you enjoy this article? Do you now understand what your retail marketing results are telling you? Still have questions? Leave a comment on this post and tell us what your metrics have been showing!
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