Use the Moneyball curve to determine what effect your labor has on sales and margins.
"Moneyball," the best-selling book and movie about the game of baseball revealed how data insights could determine which players contributed the most, rather than relying on hunches. This breakthrough way of looking at baseball players, also known as Sabermetrics can be applied to retail labor, too.
Many retailers use Sales Per Labor Hour (SPLH) to measure productivity. However, analysis shows this interpretation to be lacking and even misleading. It does not take into account employees' ability to generate revenue, repeat business and ultimately increase margin.
Retailers cannot clearly see how labor impacts revenue and margin.
- Current incentives drive the wrong behaviors
- SPLH is not the metric it is thought to be
- Misunderstanding labor can lead to systemically depressed sales and margins
Using a statistical lens, retailers can isolate the impact that labor has on sales, while controlling other factors. The Moneyball curve shows how increases and decreases in labor drive ups and downs in sales, allowing retailers to get closer to their potential sweet spot.
Download this white paper to learn how Moneyball principles may be able to help you reach your sales goals.