Measuring Marketing

Chapter 87 Retail Close Ratio

Measurement Need

To determine how many prospective customers become paying customers (not just window shoppers).

Solutioni

The close ratio measures how many customers convert from shoppers to actual buyers. It is calculated as follows:

$C_r=\frac{B_t}{T_r}$

Where

Cr = close ratio

Bt = buyers in time t

Tt = total traffic in time t

In this example, a retailer has 300 total buyers on any given day. If this retailer has total traffic of 1,500 shoppers, then the close ratio is 10%, computed as follows:

$\begin{array}{l}=\frac{300}{1,500}\\ =.20\text{or}20\%\end{array}$

Impact

Understanding the close ratio can assist retailers in developing strategies designed to increase the conversion from shoppers to buyers, which will likely lead ...