Metrics that can be
used to track and improve the effectiveness of systems tasked with
moving customers from an initial inquiry to a repeat purchase.
In the November/December 2021 edition of Furniture World we took a close
look at the four “funnels” customers pass through during their purchase
experience (see www.furninfo.com/furniture-world-articles/3962). They
often start in the first of these funnels, the virtual funnel where they
reach out before visiting a physical store. Once they arrive at a
brick-and-mortar location, they enter the physical funnel. Provided a sale
is made there, they enter the open sales funnel where they can remain for
a short or (now during the pandemic) a long time. Following a successful
delivery or pick-up, customers proceed to the post-sale funnel. The
purpose of the post-sale funnel is to invite customers to enter back into
the virtual and physical lead funnels where repeat business can be
In this article, I will discuss metrics that can be used to track and
improve effectiveness when customers enter each of the four funnels.
Virtual Lead Funnel Metrics
Lead source. This simple metric tracks the ways
customers make pre-sales inquiries. It measures the percentage of
telephone, chat, text, email, webform, appointment request, social media
and lead gen CTA (call-to-action) quizzes.
Conversion rate. Calculated by measuring the number of
sales made virtually divided by the number of leads, conversion rate
provides a measure of how well retail teams perform when selling remotely.
Average sale of virtual leads. This is a measurement of
the typical value of converting a prospect online. Typically, average
e-commerce sales are lower than the in-person average sales..
Improving the experiences of customers who are waiting for products to
be delivered is important for most furniture retailers in the current
Number of appointments made from virtual leads. A
critical number to track since appointment sales are proven to yield
better close rates and higher average tickets. Appointments present
retailers with opportunities to deliver superior customer experiences, in
part because preparation is possible.
Conversion rate inclusive of appointments made. This
metric considers appointments made and virtual sales, together. It’s an
indicator of the success rate when customers move from the first to the
second funnel, calculated as the sum of the number of sales made virtually
and sales made by appointment, divided by the number of leads.
Physical Lead Funnel Metrics
Physical lead funnel metrics are the most common sales metrics tracked by
furniture retailers. I suggest that these metrics be adapted to track
leads received from at least three sources: appointments, repeat customers
and new customers.
Close rate by appointments from virtual leads. This close
rate equals the number of sales from virtual leads closed divided by the
number of opportunities times 100. It tracks the average chance of
converting an appointment prospect into a sold customer. It is among the
highest close rates for most furniture retailers, comparable to close
rates for house calls, typically in the 90-100 percent close-rate range.
This new metric will help you to get a handle on how much your teams
are actually following up. It is calculated as the number of
follow-ups (emails, texts, phone calls) divided by total customers
with open sales.
Close rate for repeat customers. Provided information on
known customers is already available in your CRM system, measuring this
close rate allows you to determine how well your store develops long-term
relationships. The better your close rate for repeat customers is the less
you may need to spend on advertising.
Close rate for new customers. This metric provides a
measure of how adept you are at converting on first impressions.
Overall close rate. You will likely find that if you
track and improve the number of opportunities from both appointment
customers and repeat customers, your overall close rate will also grow.
Average sale. Track average sales from all three sources:
virtual leads, repeat customers and new customers. The calculation is
sales dollars divided by the number of successful sales. The highest
average sale numbers will normally result from appointments and repeat
Sales per guest. Consider appointment customers, repeat
customers, and new customers when calculating sales per guest. This will
provide further evidence of the power of making connections with people.
If you improve systems to maximize flow of virtual leads into the physical
lead funnel you will produce more sales volume with less customer traffic.
Sales efficiency rate. This metric is measured by adding
your close rate to your no-sale capture rate for follow-up. Here’s an
example. Let’s say your store greets 10 shoppers. If three buy, four give
you their contact information for follow-up and the remaining three leave
without providing any contact information, your efficiency rate is 70
Open Sales Funnel Metrics
The open sales funnel has ballooned in the past two years due to supply
chain disruptions. It is, therefore, very important to manage and track
customers who enter this funnel. Improving the experiences of customers
who are waiting for products to be delivered is important for most
furniture retailers in the current business environment.
Cancellation rate. This is the number of sales that exit
the open sales funnel in the wrong direction. Follow this metric by
measuring the number of cancellations divided by the number of sales
written over a period of time. Presently, retailers are reporting this
number to be one percent at the low end to ten percent or more at the high
end of the spectrum. I’ve mentioned in many Furniture World articles, and
I will say it again: “If it is worth improving, start by tracking.”
Number of follow-ups per open sales. This new metric will
help you to get a handle on how much your teams are following up. It is
calculated as the number of follow-ups (emails, texts, phone calls)
divided by total customers with open sales. Remember that proactive,
routine follow-up on open sales, even if there is nothing new to report,
delivers a better customer experience. With the large number of customers
requiring follow-up right now, and many salespeople to manage, good
systems can help to facilitate appropriate follow-up scheduling. These
systems should notify salespeople or order management personnel when a
customer needs to be contacted by text, email or phone.
Delivery failure rate. This metric tracks how many
customers are dissatisfied. Dissatisfied customers often enter a different
type of funnel—the open service funnel. These customers may become brand
detractors if not handled correctly. Collecting metrics on why failures
happen helps retail organizations improve customer experiences.
Net Promoter Score (NPS). NPS is a popular way of
surveying customer satisfaction. Measured on a scale of 1-10, it measures
whether a customer is likely to be a promoter of your business or a
detractor. An example of a common NPS question asked is, “How likely is it
that you would recommend us to a friend or family member from 1-10, and
why?” Asking these types of questions just after delivery yields useful
information and actionable insight into the quality of your sales cycle.
Post-Delivery Funnel Metrics
Past purchase engagement rate. If you schedule past purchase follow-up,
via email, for example, you can track the resulting opens and
click-through rates of your campaigns.
Next purchase engagement rate. Retailers that collect
information on the timing of customers’ likely next projects can send out
emails that include a link to a digital appointment calendar. As with past
purchase follow-up emails, opens and clicks should be observed.
Known customer website visits. It’s useful to measure
known contacts that are visiting your website. These include customers who
have shopped with you before and left behind a digital email tracking
signature. If a known contact visits your site, you can alert the
salesperson they worked with previously to follow up. Regardless of how
you use this info, you want to grow total website visitors as well as the
proportion of known contacts to all contacts. See the chart on the
previous page where blue depicts “all contacts” and the green depicts
It’s useful to measure known contacts that are visiting your website.
These include customers who have shopped with you before and left behind
a digital email tracking signature.”
Repeat customer leads. Whether they are virtual or
physical, when a past purchaser or shopper who left without buying reaches
out to you again, they leave the post-delivery funnel and re-enter either
the virtual or physical lead funnel. The percentage of these shoppers is a
good measure of your customer experience and re-marketing performance.
The Future of Furniture Retail
Using customer engagement tools such as funnels combined with automation
is the future of furniture retail for those businesses who want to get
ahead of their competitors. We live in a time when, for the majority of
furniture retailers, there is a problem with a lack of human resources.
The solution to better manage the retail customer experience is
technology. In the next issue of Furniture World, we will show how
retailers can use automation to connect with all their contacts
(prospects, customers, vendors, new hire candidates, and employees) so
that more can be accomplished with fewer resources.