OK, the title of this blog leaves little to the imagination for anyone from the accounting department. Their world is purely black and white, numbers driven, and results-only focused. That’s important, of course, but it hardly tells you how your stores are truly performing.
Consider these two examples. Store A has exceeded its forecasted sales goals for 6 consecutive months by at least 15%. Top line business has been great. But, when you visit the store you discover that it’s a disaster in every other respect. Merchandising standards, marketing execution, staff initiatives, loss prevention standards and more are all far below expected levels. How is this store really performing?
Now, Store B has missed its forecasted sales goals for each of the past 4 months. This is a store that used to be great. When you visit the store, every other aspect of the store is running exceptionally well. The brand experience is in place, and everything that is supposed to be done is executed well. How is this store really performing?
The reality is that both stores have significant issues to deal with, and big wins to recognize. The point being made is that if you base your evaluation on just top line sales performance, you’re only looking at about 50% of total store performance. That approach lacks any true insight into how a store is really performing.
The implementation of a Balanced Scorecard is the best move any retailer will make if they don’t have one in place already. This comprehensive approach to evaluating total store performance gives you a clearer view of how your stores are really performing. It clarifies expectations for your stores. Most important of all is that it forces everyone to become much more proactive at fixing areas of the store that aren’t executing the way they are supposed to.
In all my years of consulting with retailers I’ve never seen a single tool improve performance so much and so fast.
So, do you know how your stores are really performing? If you don’t have a Balanced Scorecard in place, you’re likely in the dark.