Project Details
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Background
Our Client operates multiple eyewear stores across the country. There are 850+ eyewear stores of which data for 144 stores was shared. These 144 are company owned stores (the rest are franchised).
Challenge
Our Client stores were performing well year on year, but the company wanted to know whether they were leaving something behind on the table. In addition, the eyecare brand did not have a robust metric to compare the performance of various stores. The company only calculated the “Achievement % per month” (ratio of revenue generated in the month to the target set for that month). However, this metric does not account for various factors such as store size, store vintage, store location and employee mix in the store. Also, there were issues in the target setting practice-the targets set for the stores were not scientific and aspirational. When the achievement % was reviewed for all stores, it was identified that the achievement % was greater than 120% in a few months and was less than 70% in other months. Aspirational target setting would allow for achievement % to be between 90% and 110%. Any achievement beyond this band suggests that the target is either easy or brutal.
Solution
Quanta People (QP) came up with two unique metrices- R2TCR and CAR2TCR- to compare store performance. These metrices normalized the store variants and got all stores on a common platform for comparison. On this scale, it was identified that the top performing stores were achieving ~3.2x times the bottom performing stores. Even among stores with similar vintages, the dispersion in performance was significant. QP also identified the correlation between the performance of stores against the employee salaries, the rate of attrition between off-roll and on-roll employees and the extent of infant attrition among off-roll employees.
Outcome
QP developed two unique metrices which were helpful in discovering the value that was getting left behind on the table. The real story was not in the profitable performance year on year but in the dispersion of performance among stores. The client also identified and acknowledged the power of performance metrics employed by QP. Establishing the correlation between employee salary and performance of the stores, QP uncovered that the off-roll employees were attriting at an alarming rate and the policies for off-roll and on-roll employees were different, even though they were performing the same activity.
Impact
The client applauded QP for the study and has agreed to execute multiple projects with QP for target setting. In addition, the assignment opened the door for businesses with other companies of the TATA group like Tanishq. The initial project was POC, but the client has agreed to pay for all future consulting exercises.