Why Running Pilot Programs in (Only) Your Top Stores is a Huge Mistake
When you’re ready to try a new process or technology, how do you select your ‘test’ stores?
If you’re like many retailers we talk to, you’re focusing exclusively on testing pilot programs in a select group of probably top performing stores. Although this is a good place to start, there are definite downsides to this approach. Depending on the goals of your pilot project, these drawbacks can be significant.
How Are You Judging Your Stores?
Let’s start by looking at store performance, since it’s one of the keys to achieving the goals of your pilot.
Take a look at how you judge the stores within your chain. Many times, you’ll define your high, average, and low performing stores — let’s call them A, B and C stores — based essentially on sales volume. But revenue shouldn’t be your only consideration.
Take a closer look and evaluate your stores based on other servicing metrics, such as the refer to friend or net promoter score. Suddenly, your A team might not be your top performer and instead some of your B teams will truly shine.
Why You Want to Start With Your A Team
Your go-to test stores probably have good revenue numbers, but also really smart managers and great staff who are flexible and eager to try something new. These high-performing stores:
- Assimilate quickly to new technology;
- Imbue a sense of your brand;
- Have a team that offers valuable feedback and creative ideas when something isn’t working.
Put simply: These are your ‘A team’.
They’re ideal for a pilot program because you know you’ll have an invested crew implementing new technology or processes, and maximizing its potential. You can also be confident that the teams at these stores will provide helpful feedback, making them prime candidates for your pilot.
… But Consider Testing at Other Stores Too
Not every store performs optimally… and it’s not always due to the team running it.
Sure, a store may be performing under par because of poor management. Other times, poor performance is due to location. Or the store slipped into a lull and it’s ready for a refresh.
There are many reasons why stores might not be performing well. And since it’s normal for there to be a mix of performance levels in your retail chain, it’s recommended you include this variety in your pilot program. We’ll talk more about this in more detail a little later.
Sometimes Your “A Team” Really Isn’t
Sometimes what you think are your top performers are really ‘sandbagging it’. Sure, they’re performing well, but they could be performing substantially better.
Take one of our clients as an example. This national chain had some really great teams in place. However, when we did an initial pilot program, we found that some of their stores were getting by on sheer inertia. They had so many feet in the door that it wasn’t immediately obvious that these high performing locations were actually suffering from their admittedly sub-par service.
This was something that a lot of our contacts in the brand knew in their gut but couldn’t quite put their finger on. When we started showing side by side service metrics, the aspects of their operations that weren’t being optimized became apparent.
This encouraged them to prioritize a shift in how they did business, and the results paid off. They saw significant improvement in the performance of this store, and then of the overall chain.
Get Clear on the Goals for the Pilot
So now that we’ve looked at different levels of performance within your brand, it’s time to consider how those relate to the goals for your pilot project.
What do you hope to achieve from your pilot program? There are no right answers to these questions, since they depend on your unique brand priorities. However, there are a couple of things you’ll especially want to consider as you’re setting those goals:
- Would you like to know how something new will work with your top players? Or would you also like to get clear on the realities of implementation in other stores?
- Most stores are operating at an average performance level, so average stores will provide a clearer idea of how much you can actually move the bar across the brand. How important is if for you to see an ROI? Would you like to know how much uptick you can expect from your B and C stores?
Variety in Test Stores is Healthy
Most of the time, it will be healthy to include a variety of test stores in your pilot program. Not only does it give a more realistic idea of what will happen to your overall sales after implementing the new technology or systems across your chain, but it’s also a motivator for both low and high performers.
Many underperformers are hungry. They want to move to the next level, and if they’re provided with a clear path to do so they’ll be eager to make that move.
And sometimes, as discussed above, A players are doing well almost despite themselves, and have plenty of room for improvement.
Which Stores Should Be Your Test Stores?
Break down your stores into A players, B players and C players. Then, choose a number from each category. The more variety you include, the more opportunity to get feedback from different types of stores, as well as to see a spike in performance. Variety in test stores will provide a true representation of what a new program can do for your business as a whole.