Home » How Many Customers Does it Take to Change a Retailer?

How Many Customers Does it Take to Change a Retailer?

Two numbers every retailer should track are Number of Transactions and Average $ per Transaction. (Yes, if you know the first number then you can calculate the second).

Number of transactions is simply how many times you rang up someone on your register. Did that number go up or down? If it went up, life is probably pretty good. You can skip the rest of this post and wait for the next one talking about the Average Ticket.

If it went down, read on…

There are two reasons for your number of transactions to go down:

  1. You didn’t get enough traffic through the doors
  2. You didn’t convert that traffic into purchases


There are a number of reasons why you might not have as many people coming through the door. Here are the most obvious ones…

The market shrank. The population in your area decreased or at least the population that shops your category decreased. We have seen a decline in births in county for four straight years. Since we sell baby products it is not surprising that the number of transactions has declined. Fewer babies being born means fewer people buying cribs.

You can get population information from your local government. They track things like foreclosures, house sales, rental property availability, unemployment claims and taxes to determine what is happening with the local population.

In a similar vein, did your market dramatically change? Was there road construction outside your door? Was there a major shopping center constructed somewhere else (even if they didn’t have a competing store)? Was there a fundamental shift in traffic patterns? all of these could have an effect on the amount of traffic coming through your doors.

The competition increased. Did a new competitor come to town? Did a current competitor step up their game? Although I often tell retailers to focus more on what you can do than on what your competitors are doing, you still have to watch them. In 2010 Toys R Us opened a pop-up temporary store in our market. It only took a small piece of the pie, but in our shrinking market every crumb counts.

Your advertising did not work. Did you cut back on your marketing efforts? Did you change your message? Did you forget to change your message? If you cut back or made major changes to your message you may have caused the drop in traffic. (Not sure what your message should be? Download this free eBook “Understanding Your Brand”)


Two main reasons why this happens:

You didn’t have the right products. When there is a hot product in your market and you don’t have it, you’ll get plenty of lookers, but no buyers. Nothing cures more retail ills than having the product everyone wants. Did you have a bunch of calls or requests for a particular item? I know one store that has a daily worksheet that all the staff fill out including what requests were made to which they had to say NO. From that worksheet she often finds new products and categories to carry. Her rationale? Customers come in thinking she should have it. Why disagree with the customer?

Your sales staff wasn’t up to par. How much did you commit to training? How much did you work with the staff on what great customer service looks like? How much did you leave to a manager to do? Does the manager care at the same level as you care? Not only does a poorly trained sales staff cost you in conversions, it costs you in average ticket (which we’ll explore in the next post), and it costs you in repeat business (traffic coming through the door).

More than likely, if your transactions are down it is a combination of many of these factors. The two you can control the most are your Advertising and your Sales Staff Training. Get working on those right away. In fact, even if you had a good year, you can still raise the bar in both of those categories.

And that will make it a Happy New Year for your business.

-Phil Wrzesinski

PS One other thing that could happen… Your POS could change the way it tracks transactions. Our new release of our POS software did just that. Took us two months to figure out why our number of transactions spiked all of the sudden. Got that figured out so now we’re comparing apples to apples again.

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