I recently visited with a friend who runs a large company that includes multiple showroom locations. He was consumed with improving how the showrooms measure their metrics year over year and how they can get more people through the door in a more efficient manner. It became the inspiration for this column, and I continue to think of ways that showrooms will be able to accelerate the sales process in a brick-and-mortar world.

I am sure most showroom managers have a list of things that they measure to gauge performance against past years’ sales, a benchmark or a particular sales goal. Making sure you’re measuring the right things, as well as a few other touchpoints, can help you navigate an ever-competitive market.

Here are a few things that I have seen some great showrooms doing. I think it would be a good idea for you to consider measuring a few extra things as you enter 2024. Everyone loves a good scorecard; maybe some of these measurement tools can help your employees know where they stand.

• Conversion rate. Some would call this the bid-to-sale ratio. Simply put, it is how many bids are produced by a salesperson versus how many sales are closed. This is important since the time and effort of the sales process are expensive. Managing the time spent with the right customers is critical. Are designers coming in to use your showroom as a tool and then buy online? Measuring account customer close ratios is especially important; it measures their success and loyalty to you.

• Speed of bid follow-up. While many of you are not using a customer relationship management system, I would still expect your showroom manager to ensure that a bid is followed up within 24 hours. Rapid response means reducing uncertainty and demonstrating your competence as a sales associate.

• Transaction size. While this seems obvious, making sure that the customer isn’t cherry-picking items from your bid is important. Taking a salesperson’s transaction size and benchmarking it against peers in the same location is another measure of performance.

• Accessories added to order. I always advise taking a particular brand, especially ones that command high gross profit, and setting a goal for your employees to see how much they can add to an order. Bath accessories, vent fans, lighting, towel warmers and hardware are all necessary parts of the bath design, and yet they get pushed aside by fatigue or fear of adding on. You do customers a disservice if they must chase this stuff around from other sources.

• Number of returns per employee. This is the measurement that acts as a red flag when it comes to employee training. When you see excessive returns by an employee, it’s an indicator that they don’t know the products well enough to sell or aren’t listening to the customer enough. While there isn’t a benchmark in the industry, and of course, we all know everyone has a bad day now and again, you should still measure your employees and watch for trends.

• Store traffic daily/weekly/monthly. Measuring your traffic daily and creating a journal showing how many people come in your store, at what time, and the weather will give you a map of where your payroll dollars should be spent. Those consumers with money generally shop on the weekends in brick-and-mortar, and most showrooms do not have convenient weekend hours for people who are ready to buy. 

There is the argument that only tire kickers come in on the weekends, but I assure you that plenty of people come in who are evaluating your showroom and looking for a comfortable place for them to shop. I am sure they will take the time and investment to make an appointment during the week if it is right for them. Looking at store traffic may show that Mondays are the day to shorten hours; you won’t know until you measure.

• Sales per employee. While measuring profit per employee is much more important, having a scoreboard and healthy competition with your peers for a sales goal is a great way to measure performance. It’s also a great way to look at trends to see who is constantly underperforming.

• Profit per employee. Of course, most showroom managers measure this. Watching for low-performing profit per employee can be indicative that they only want to sell commodity-grade products or need more training to sell more luxury items in your showroom. 

Yes, there is the occasional sale that must go out the door at a lower price to meet a competitor’s quote but, again, watching for continual trends in performance or underperformance is a necessity.

• Vendor performance by rep agency. Measuring sales performance by vendor is an indicator of how your displays perform in the showroom. Taking this a step further and looking at how the vendors perform based on rep agency is a great way to tell which agencies do a solid job of training and pay attention to the needs of the showroom. It is also a great way for you to evaluate the vendors you work with and scale back on those not doing your sales justice.

• Number of visits a customer makes during a consultation. In many showrooms, when doing a complete home, it takes several consultations to get through the sales and selection process. It is time-consuming and expensive for everyone involved. 

Trying to shorten the sales curve and measuring the length of time each consultant spends with the client is an indicator of how well-trained that employee is. It will help with the overall satisfaction of the customer because they get to go through the sales process.

• Marketing costs. How much does it cost to get a customer in the door? Do you measure your marketing efforts, whether they be on social media, magazines, print, or other media? Asking customers coming in the door how they found out about your business is critical in knowing what works and what doesn’t. 

Unfortunately, there is no set rule for marketing in the showroom world since everyone has a different mix of customers. For some showrooms, running CEU classes and events work. For others, direct-to-consumer social media marketing works. The important thing is that you do some form of marketing, and you measure whatever it is you do.

Businesses need to measure what is important to them. And while some of these may not relate to your business, many showrooms need to take the step and document their progress.

My 2024 Wish List

A few trends I would like to see in 2024 include:

• Review your showroom vendors. Decide which ones have a dedicated direct-to-consumer strategy. Understand that profit matters and do your best to minimize the amount of display space they take up in a showroom. Even if the display is free, it does not mean it’s right for your business.

• Review your pricing strategy. If you’ve given 20 percent off your entire life, it doesn’t mean you still have to do it on every item.

• Review your commitment to employee training. The key to successful showrooms is having the most professional, polished, well-trained experts on the products they sell. Customers come to you as a trusted advisor, and you should not let them down. Commit and measure the amount of training your employees take each month, whether it be by rep agency, vendor, association or buying group.

I wish you all a prosperous 2024, and I hope your trend of measuring performance in the showroom reaps rewards throughout the year.