What does it cost if you fail to deliver on your brand promise? How does it affect your current and future sales? What does it mean for the long-term health of your business and ultimately your brand? These are important questions and, unfortunately, to ignore them can be a costly mistake.

There is a simple truth when it comes to in-store execution. It costs just as much to deliver a bad experience as it does a great one.  Labor costs vary only slightly, but differences in the effectiveness of your staff can be dramatic. Star performers will deliver consistent growth and profit, while poorly run locations fight for solvency. At scale this is a costly problem that yields a 5-8% swing in annual revenues.

A simple example of two locations illustrates the power of customer experience to amplify growth.

Store A: £1M in annual sales

  • Well run, hitting all operational standards and growing at 5% per year
  • Consistent performance yields a new sales level of £1.157M in 3 years
  • Benefits from low turnover, bonus potential, and the ability to develop new talent for expansion along with a culture of success

Store B: £1M in annual sales

  • Struggling with execution, turnover, and customer retention and shrinking at 5% per year
  • Inconsistent performance yields sales of £.857M after year 3 threatening solvency

The challenges and opportunities of volume present themselves as a function of how well you operate. As volume increases, labor and product costs increase fractionally yielding higher profit margins on incremental sales. As volume decreases labor often remains constant, and cap-ex and marketing costs are funded at the expense of profitability and margin. If this continues, locations can become insolvent as the underlying economics of the business break down. 

So, what is your best defense? 

There will always be good and bad real estate. Good and bad employees. There will be market and localised factors that impact sales. There will be competition. All of these threats are real, but in many respects, they are not the focus for market leaders. Instead they are equalizers as all players are subject to these same threats. Market leaders focus on their own game. They focus on delivering exceptional experiences, developing talent, expanding their reach into new markets responsibly, and managing execution above all else. It takes both vision and discipline to succeed.

In terms of discipline, there are four pillars of growth. If you are a multi-unit operator focused on growth, there are four questions you must ask about each location that you operate. Ignore any and your brand health is at stake.