So you are responsible for running a salon and want to increase your salon’s performance. How do you go about this? First things first, you need to run a performance analysis to check how your salon is currently performing so that you know how you can bring in improvements.
What are some of the metrics, or KPIs (key performance indicators), that can help you understand at what rate your salon business is growing?
If you want to measure your salon’s sales and growth accurately, you must know the KPIs to factor in as part of your overall performance analysis. Measuring incorrect KPIs will not give you a clear performance breakdown.
For example, you might be trying to gauge your salon’s profit by the number of hours your salon booths are occupied. What you should be measuring instead (when you have fewer salon professionals than booths) is the number of hours these professionals bring in work.
Booth occupancy shouldn’t be a KPI if your hairstylists and nail service providers are sitting idly. Once you ensure that your salon workers are booked at capacity, then adding stylists may be an option.
If customer retention is your focus, identify which salon staffers are the best at rebooking and retaining their clients. Reward these staffers along with their customers. Keep in mind that retaining a current client is much less expensive than constantly generating new traffic, so make certain to take care of the clients you already have.
For instance, make rebooking a natural part of your salon dialogue, a habit that’s second nature. Clients who call in versus pre-booking average 13 weeks between salon appointments. This seriously affects your frequency of visit number, and, ultimately, your income.
A good way to streamline your KPI measurements is to utilize a software system to help you track your numbers.
Here are some examples of metrics that you can monitor:
Client and repeat client count
Number of new clients
Frequency of visit
Client retention rate
Length of visit
Gift card sales/redemption of gift cards
Daily client rate
A salon owner or manager can use the above KPIs to identify growth opportunities, recognize top performers, and even reward the clients who are actively promoting the salon through their patronage and referrals.
Managing a salon can be daunting. You may be capable of running a salon creatively, but you also need to be cognizant of the administrative and business needs involved. Revenue figures are one way of measuring your salon’s growth rate, but assessing other growth indicators and making the proper shifts can help bring long term success and prosperity.