Using traffic and customer conversion rates


In retail, the traffic and Customer conversion rates are what professional marketers check religiously. They are easy to set up using our software.

What I will discuss is the manual process. If it's automatic in our software, it's going to be all different as it's automatic.

Now, you need to set up a spreadsheet which will be a record book. Here are the following columns


1) Date

You can do hourly with some counters, but we will leave that to another post.

2) Summary of the highlights of the day

Examples might be raining, EOFY sale, Easter, road works mucking you up, etc.

3) The traffic

Traffic is generally considered the number of marketing groups that come into the shop. For example, a husband, wife and three kids are one buying group. If he went by himself, the husband then came into your shop. He would be a buying group. It is best described as the number of decision-makers.

The best way to get this figure is to put a people's counter at the shop's entrance. These counters are not particularly expensive; a few hundred dollars should be enough for a good one. Some cheap people count the number of people that come into the shop. This can be deceptive. In the above example, five (5) people ( a husband, wife and three kids) came into the shop, yet there was only one buying group. Some of the better people counters have options that can overcome some of this  problem. They count one person, switch off for a few seconds, and then start counting again. The idea is that the above family will all come together. It works better, but it does not solve the problem totally. Some can do both, which is better still. We use what we have.

Some cheap systems only hold one day, and some better systems have many days of counting. Depending on its cycle, e.g. if it's daily, then every day, generally first thing in the morning, a person records the number and resets the counter to zero. If it can be done monthly, even better, as this process can be monthly.

This you put in this column.

4) The number of sales for the day you get from our POS Software.

5) Now, you calculate the conversion rate as a percentage

So the conversion rate per day = (Number of sales) / (Number of people)

Most of our clients are looking here at about 30%.


You could write a book on what you can determine with this.

It does help with rostering as it does tell you when people are coming into the shop, but its primary use is to assess marketing campaigns and shop fits.

Professional marketers determine a low and high point for traffic and conversion rates. Once you have a month of history, this is pretty easy to do. Sometimes Saturdays and Sundays need adjustments.

For example, a shop I talked about a few days ago might consider 100 low traffic and 200 high traffic.

Now they want to know what days had low or high and why. Is it something the shop did? If so, maybe they can repeat it? 

Similarly, it might determine that conversion rates of 20% are low and 40% as high.

The same point here. Why are the conversions high or low?

The most intriguing days have high traffic and low conversion rates. ; why? Plenty came, but little was brought. What did we do wrong that day? Say we had an EOFY sale, well the people came, but what we had was not what they were interested in.

Another interesting one has low traffic and high conversion rates, but in my experience, 90% this is often the weather, as rain often does discourage window shoppers.

People that do such analysis religiously claim a 1% improvement in the shop. So if your shop does a million dollars of sales, it is worth an extra $10,000 of sales to the shop. For most, this can justify a few hundred for a people counter.

Try it out. If you want an automatic system, let me know.

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