In a recent conversation with a retailer about metrics I shared the three key elements that have to be in place to measure impact of decisions. In our case, it’s results from training, but these elements apply to the full range of metrics or KPIs you may want to measure.
First, do you have either company historical information about the area to be measured or at least an industry benchmark? Without knowing what the trend has been or the minimal impact to date it’s much harder to assess progress toward any KPI.
A second factor is understanding what your systems can and cannot provide is essential. We have been asked by retailers to measure something their current systems can’t or don’t provide. A conversation with IT will be essential to determining not only if you can get the data but in the form that will be most helpful to analyzing and comparing it to the history.
Lastly, retail is an industry that has many variables; all of which might impact KPIs. Before you begin measuring impact from a decision it’s important to assess what else might be happening in the business that might impact the KPI you’re measuring. For example, if there are competitive changes that either give you a market advantage it’s important to note that it may move the needle all by itself which negates the connection between what you’re measuring and history.
Metrics are important but the quality of that information is essential. What do you measure in your business? Which of these factors are the hardest to review? Tweet us @mohrretail or share your thoughts here.