Same-store sales (SSS) reveal how an existing location is performing and helps business owners and investors measure sales performance over time. Same-store sales are directly connected to customer satisfaction and it’s important for operators to increase SSS over time.
In this post, we’ll review what same-store sales are and explain five ways that you can increase Same-Store-Sales for your business.
What are Same-Store Sales?
Same-store sales is a business term which refers to the difference in revenue generated by a
A merchant doesn’t have to be performing well in its existing stores to open new locations. Opening a new location can affect revenue, but positive growth in same-store sales is indicative of how a merchant is performing overall as a business. This means that a store in a bad financial state could actually have increased revenue. Same-store sales reveal the true growth of a merchant and are highly correlated with share performance price. Increased same-store sales indicate that customers are happy and that there is room for expansion.
Sometimes, same-store sales can be influenced solely by price increases, instead of customer satisfaction or popularity, but when evaluating same-store sales, it’s important to take into account foot traffic in addition to price changes.
Know who your customers are
In today’s marketplace, it’s important to use marketing tools that capture data about who your customers are. Instead of being reactive to customer feedback, you can be proactive by measuring which of your customers visit the most and spend the most. Your top customers are most loyal to your business, and they are the ones who are most likely to increase your same-store sales.
Capturing customer data will enable you to develop personalized communications strategies. For example, if you use a customer engagement platform like Thanx, you will be able to see if one of your best customers stopped visiting your location. Addressing this gap in their visit frequency early on, can bring them back through the door and make them feel valued. You can win them back by sending them a personalized offer and asking them about their experience at your business.
Send personalized offers and promotions
You can also use targeted offers to increase foot traffic during slower hours. For example, if your coffee shop is slow on Monday afternoons, you can send your VIP customers an offer for 20% off between 2pm-4pm on Monday. This won’t only drive more traffic, it can also increase customer engagement and same-store sales.
Customers love to feel like their favorite merchants know who they are and appreciate them. The more personalized and targeted you can be with your communications, the better. Sending personalized offers to your VIP customers (those who visit and spend the most) at a specific location, can increase their average spend and visit frequency. You can use a customer engagement platform like Thanx that has robust data around each of your customers to segment all of your campaigns and make sure that the right person is receiving the right offer at the right time.
Listen to customer feedback
Customers drive same-store sales and it’s important to listen to and respond to their feedback. When a customer leaves positive feedback about their experience, it will validate the “health” of that location. If a customer leaves negative feedback, address their concerns and respond in real-time.
For example, if customers consistently leave negative reviews about your staff, you may want to have a staff meeting and conduct an organized training to address any gaps in their performance. If customers are happy, they’ll keep returning and increase your revenue over time.
Maintain the quality of your products
If you own a pizza restaurant and you’re hearing from customers that the pizza is not as tasty as it used to be, it will be difficult for you to increase same-store sales and stay in business. While this is obvious for most operators, it’s important to always re-evaluate the quality of your products, determine where there is room for improvement, and create innovative solutions.
For example, restaurants use limited time menu items to ensure that all of their food is fresh and seasonal. This also creates an incentive for customers to come in quickly to enjoy limited time only dishes. You can also use data to determine which of your products are your top-sellers and which almost never sell. These metrics can determine the quality and popularity of each product and help you keep costs down and revenue going up and to the right.
Keep an eye on trends
Brick-and-mortar businesses have evolved as the world advances and becomes more technological. It’s important to keep an eye on the latest market trends and understand what your customers’ needs are. For example, many businesses are going cashless to make the selling and buying process more seamless. Many merchants of all kinds also offer delivery options to increase flexibility, demand, and meet the customer exactly where they are.
Restaurants are adding more diet-friendly and healthy options to their menus like gluten-free, or vegan dishes. Others have apps so that customers can pay using their mobile phones. Using technology can also help you capture meaningful data about all of your customers so that you know who they are down to when they visit, what they buy and what their lifetime value is.
The more up-to-date you are with recent trends in your industry, the better you will be able to cater to your customers’ needs, compete with your competition, and increase same-store sales.
Increasing same-store sales isn’t only affected by increasing costs — sales are driven by customer satisfaction and customer engagement. Increased same-store-sales is a positive indicator that your business is growing. It’s important to invest in infrastructure, efficiency, and a personal and engaging customer experience that builds an emotional connection with customers to keep them coming back.