Store management activities include tasks such as industry comparison, product selection and development, store monitoring, product analysis, and marketing tool analysis. Data analysis can provide a basis for decision-making in all operational links. Analyzing and evaluating the indicators of store management performance can help merchants find an operation plan suitable for the store and maximize sales profits. The indicators commonly used to evaluate store management performance on the Alibaba International Station platform are mainly the data systems on the operation and business sides mentioned above. Stores need to collect and analyze this data and adjust and optimize marketing plans in a targeted manner.
If you want to systematically understand the operation and business development, you need to comprehensively analyze these indicators. In many cases, you only need to have a general understanding of the results, especially when companies determine KPIs, they often use simple result data definitions. Let us try to define a set of simplified evaluation indicators for operations and business.
(1) Marketing cost per monthly single inquiry.
We define the operating cost of a single inquiry as a simplified indicator of operation, which is generally assessed on a monthly basis. The calculation formula is:
Marketing cost of a single inquiry per month = total store marketing investment per month / number of valid feedback per month
This data reflects the ability of the company’s operating personnel to use marketing funds to obtain inquiries. Excellent operating personnel will try their best to reduce the waste of funds and reasonably arrange the allocation of funds for various marketing tools to maximize the effect. Obviously, this assessment indicator is problematic when used alone. In order to reduce this value, in extreme cases, the operating personnel can give up store marketing investment. Regardless of whether marketing expenses are invested, most stores will have some inquiries. Therefore, when there is no investment, the marketing cost of a single inquiry per month is the lowest. In addition, because some marketing tools are mainly used to increase brand benefits, it is necessary to pay attention to long-term data effects. It is not reasonable to simply include brand marketing investment in a certain assessment month. It is recommended that brand marketing expenses be controlled by an annual budget, and the annual budget should be evenly divided into each month and included in the monthly marketing expenses.
(2) Monthly sales growth.
Monthly sales reflect the ability of a company’s sales staff to convert the inquiry resources obtained from operations into orders. Using monthly sales growth can not only reflect the salesperson’s ability to negotiate orders, but also examine his or her efforts. Growth needs to consider two situations, one is month-on-month growth, that is, the growth relative to the previous month, and the other is year-on-year growth, that is, the growth relative to the same month last year. Generally, the sales of stores will have a certain degree of seasonality, so month-on-month growth is not very meaningful, and the main focus is on year-on-year growth. The calculation formula is as follows: Monthly sales year-on-year growth = sales of the current month – sales of the previous month. Of course, the difference between the actual sales and the planned sales should also be considered. This difference reflects the planning ability of the team. There are the following benefits to using the above two indicators as the core indicators of operators and business personnel. First, generally, cross-border e-commerce companies are composed of operations personnel and sales personnel to form a project team. The salesperson actively promotes the sales process, the operations personnel assist them in developing business, and the salesperson serves as the project team leader. When the salesperson’s core indicator is set as sales increment, he or she will promote the operation to add new products and increase marketing investment. However, the addition of new products and marketing investment will lead to an increase in the operating cost of a single inquiry. At this time, the operations personnel must carefully select products and optimize marketing strategies because they must meet the needs of the salesperson. That is, as mentioned above, if the operations staff does not invest in marketing expenses, they will not be recognized by the sales staff.
Secondly, in order for the operations staff to perform well, the sales staff have to help the operations staff reduce marketing costs, rather than blindly increase investment and sacrifice marketing results (to ensure profit margins). If the sales staff cannot generate new sales on new products, the operations staff will take the initiative to request product optimization.
Third, these two core indicators avoid the trouble of calculating profits. Many people think that directly calculating the team’s profits is the best way, but in practice, on the one hand, profit calculation is difficult (many costs, such as employee wages, are confidential), and on the other hand, the boss may not want employees to know the profits clearly, so using profit assessment is often not the best choice.
In short, business and operations are complementary partnerships, mutually beneficial and mutually restrictive. Operations are cost units, and core indicators guide them to focus on costs; business is a profit unit, and core indicators guide them to focus on revenue growth. This simplified indicator setting allows them to work closely together, which not only achieves independent assessment, but also helps to enhance team cohesion.