5 KPIs to boost your beauty salon or spa profits in 2021
When looking to boost your salon’s profits in 2021, there are some important KPIs (key performance indicators) to be focusing on, says Graham Clarke, sales director for professional brand Image Skincare. These are the five KPIs guranteed to help your revenue soar.
1. Staff retention
The benchmark for good staff retention is 70% and the best way to achieve this is to give your employees a voice. Host a weekly 10-minute team huddle to cover what’s happening in the business and let people share ideas.
Also, think about ways you can incentivise your therapists to build their productivity with re-bookings. When you recruit – do you instil your culture into prospective employees? This is also important.
2. Average service price
This is the average amount clients are spending each time they visit you and this number should increase every year to cover your outgoings.
The thought of a yearly price hike doesn’t have to be frightening instead of a £5 increase on services each year, you could do something smaller like 50p. It’ll soon add up.
3. Retail per client ticket
This is how much product is being sold, on average, to each client that comes into your salon, and £20 is the average across the UK. Find out your current average using your software system and build on that.
4. Client retention
You want to maintain this at 50–70% ideally as a minimum. Retail sales can lead to higher retention rates – aroma is our most powerful sensory response, so using salon products at home will remind clients of your services.
This is the baseline for the industry – clients who purchase three or more products from salon tend to have an average return rate of 80%, while those who buy two or more have an average return rate of 60%.
For 85% of the time a service provider is scheduled to work in salon, they should be with a client. Look at how booked up your columns are and ask yourself: are my opening hours long enough? Can I open seven days per week? Could I expand my space to fit more clients in?
It’s also worth paying a bit to hit your local demographic on Facebook and Instagram with information on what you do, and start a recommend-a-friend scheme to help fill column space.
Graham Clarke is sales director for professional brand Image Skincare. Clarke plans to launch the Image Business University for salons in 2021.