Business Insight

Customer Attrition and What to Do About It


Possibly, you may have heard the stories of some independent shoe stores closing their doors, especially one-store operators. Often, the “retiring” owner is interviewed by the local newspaper and invariably the stated reasons for their store’s demise include: ”the economy,”  “can’t compete against the internet,” or “impossible to  compete directly against my vendors.” In some instances, these are not the real reasons for the store’s closure.  

Any shoe store needs a steady stream of customers to survive. Customer Attrition is a fact of business. Customers move, customers are attracted to other retailers, customers are fickle. My theory is that a failed business is run by an owner/operator who is ultimately responsible for allowing customers to flee to other retailers without replacing them. As part of the equation the failing retailer is often also responsible for not maximizing the customer experience in his store. He can blame it on the economy or blame it on the vendor, but more often than not, he needs to place the blame on himself.

If you lose too many customers, your business is lost!

The retail business is a grow or die business. The business has a need to grow (usually referring to increased volume) or it is headed south. Since Operating Profits are measured by subtracting Total Expenses from Gross Profit Dollars, business growth can be viewed as increases to Operating Income.

Expense Creep

Total volume (sales) might increase and the business can be dying at the same time. That is because Expense Creep has infected all businesses, but specifically the retail shoe business. Expenses tend to “creep up” and begin to erode a portion of profits.

Certain expenses are fixed, or fixed with regular increases (rent), or certain expense categories have recently experienced significant inflation (for example, payroll). Even in non-inflationary times, expense dollars increase over time and therefore, every shoe store needs to generate additional gross profit dollars in order to meet the go-forward expense dollars. The conclusion of Expense Creep means that all operators need to grow their financial results or be faced with lower profits (or worse). Businesses die if they experience declines in gross profit dollars year over year over year.

Customer traffic results in increased opportunities. Handled correctly, increased opportunities will result in increased profitable sales. Increased profitable sales, coupled with expense control, will equal increased operating income.

In my view, understanding what inhibits customer traffic and sales is vitally important to the goal of improving financial results. It is my contention that a consumer’s experience in your store is something a store owner can control.

What a potential or existing customer experiences in a shoe store determines if they leave the store with the maximum purchase they will be happy with when they get home. A happy customer base is the key to shoe store success. An unhappy customer base or even just one unpleasant shopping experience may result in losing the possibility of an entire family’s patronage.  

Why Do Customers Leave?
Customer Service

• Poor customer service

• Inconsistent experience

• Failed to complete your promise

• Lack of convenience

• Merchandising or Marketing

• Your business competitor is better.

• Unreasonable pricing


• Insufficient customer communications

• Customer’s lack rapport with your business

Customer out of market

• Customer Dies

• Customer Moved


• Competitive pressure or offers

Stores that can’t maintain their traffic counts and KPIs die!

Traffic counts are simply the number of potential customers walking through your front door. In a mall, these are people who walk across the lease line.

Key Performance Index (KPI) refers to statistics related to the traffic, including:

Conversion Rate – which is the percentage of store traffic that is converted into a sale.

Transaction Value – This is the average value of each sale made, expressed as many ways as you are able to track:

• Dollar Average

• UPT (units per transaction)

• PPT (pairs of shoes per transaction)

• Add-Ons - this means accessories to shoes (socks, insoles, shoe care, handbags), measured in various ways.

An analogy can be made between the game of baseball and the retail shoe business.

Any mistake that the owner/operator can prevent is an error in playing the retail game. It should be obvious that it is better not to commit errors. The more errors an owner makes, the smaller his business success will be.

• If traffic declines and is not replaced by acquiring new customers, that’s an error and a missed opportunity to make a sale. Without sales growth, gross profit dollar growth doesn’t happen.

• If a customer walks, that’s an error. Again, no sales, no growth.

• If average transaction values decline, especially because of recent inflation, that’s an error, leading to lower sales and lower gross profit dollars.

• If UPT (units per transaction) or PPT (Pairs Per Transaction) fall, that’s an error in training and supervision.

• If add-on sales are lackluster, that’s an error in making them an important goal for the front-line staff.

Keys to making fewer errors.
Consumer Focused Keys

• Understanding your typical customer.

• Building Top of Mind Awareness of your store via efficient and consistent marketing.

Merchandise Focused Keys

• Understanding what’s hot and what’s not.

• Counting and filling the top selling styles.

Human Resource Focused Keys.

• Hiring, Training and Developing the right staff.

• Dismissing error prone staff.

• Keeping front line staff focused.

• Setting and monitoring goals.

Environment Focused Keys

• Maintaining consistent clean, organized and efficient floor plan.

• Doing whatever is necessary to maintain a great environment for your customers.


A store owner is responsible for maintaining customer traffic in his store.  Potential customers need to be engaged. Staff needs to engage with potential customers in a systematic manner that is well known. We often call that “Meet, Seat and Greet.” Training staff how to properly do that in consideration of the end goals (maximized transactions) is the responsibility of the operator.

The operator of a shoe store is also responsible for building customer traffic to replace customers who don’t return. Marketing for new customers is both an art and a science that a store operator needs to learn and improve upon.

The details of owning and operating a shoe store aren’t any more difficult than they are in any other business. In some respects, they are easier to learn. The details matter!

Alan Miklofsky is a semi-retired shoe industry veteran and contributor to Footwear Insight. This is his tenth article in Footwear Insight. After a 40-year award winning career as a retailer, long-term board member of the NSRA (which included a stint as its Chairperson), Alan is currently a business consultant.

For more information on Alan, visit his LinkedIn page at: