Fact – Most spas are missing out on profitable sales every single day.
Depending on the size of your salon or spa business, you could be missing out on anywhere between $20k to $100K per year from add-on sales that never happen; the serum with the facial, the brow tint with the lash tint, or the gel upgrade with the pedicure. Simple add-on sales that are simply being ignored.
So why does this happen?
In my experience, there are 5 major reasons why spas are missing out on this substantial additional revenue.
1. Therapists or receptionists miss their opportunity to offer something extra during the booking process.
2. There’s not enough time to provide something extra during the service.
3. There is no formal expectation by management that spa therapists will offer an add-on or up-sell to their clients, and therefore, no motivation to do so.
4. Formal training is not provided on how to up-sell naturally.
5. Spa therapists are not confident or comfortable with the process of recommending something extra to their clients.
Let’s take a closer look at these 5 fail points and discover how they can be handled to produce better results.
1. Missed Opportunities
The ideal time to offer clients an additional service/s is, without a doubt, during the booking process. Not only is the existing client’s service history at your fingertips to quickly review for possible add-ons she may have previously had, but if an additional service is added to the booking at this point, it will eliminate the need to squeeze something extra into the allocated appointment time on the day.
For new clients, or where no service history is available, a relevant extra services list, kept at the reception, can be referred to quickly for suitable up-sells. This list can easily be generated through brainstorming with your team members.
2. Lack of Time
Lack of available time can be a real problem if the additional service takes extra time and could cause the therapist to run late for her next client. When this happens, the best up-sell is one that will replace an existing component of the treatment, or be very quick to deliver.
A few strategies that come to mind are:
• Serums applied during the facial to enhance results
• Up-graded masks that will take the place of regular masks
• Gel polish instead of regular polish
• Brow tints while lash tints develop
• Hand peel while the face peel activates
Depending on the services your spa offers, there are loads of various up-sells that can be included when time is tight.
Always look for opportunities to up-ell to a more premium service that requires no additional time.
3. Goal Setting
Not setting individual sales goals for team members means no accountability is in place, and this results in a lack of motivation to offer additional services or up-sells.
Make time at the beginning of each day to spend a few minutes with your team members to review their clients for the day and discuss beneficial up-sells for each.
Set a daily goal for each therapist based on the number of clients she has booked in her column and follow up at the end of each day to see if she has met her goals. If she has, congratulate her on her performance, and if not, discuss strategies she could have used to reach her goals.
The important points here are to set goals, create accountability, review performance, and provide encouragement and support.
4. Team Training
Your team members need to know not only what is expected of them but also how to achieve it. Keep in mind that training on any topic is not a ‘do-it-once-and-hope-it-sticks’ activity. It needs to be provided regularly and reinforced constantly to keep it front of mind.
The best and most successful training methods are those that are inclusive and fun for the trainee. Training that includes ideas and input from your team members will always have the best outcome.
To facilitate this, ask all team members to contribute suggestions and solutions to every training topic instead of sitting back and turning off while the team leader does all the talking.
Make training a team effort and you will be rewarded with a higher level of participation.
5. Changing the Employee Mindset
I’m yet to meet a spa therapist who loves to sell (unless of course they are the business owner). Selling often feels uncomfortable for therapists and they see the whole process as outside of their real job of providing services and pampering clients. Basically, therapists want to nurture their clients and don’t see selling as part of that process.
The way to overcome this is to change their mindset from selling being just about grabbing some extra money from their clients, to selling as a way to benefit their clients and help them achieve a better, faster outcome.
Good selling in a spa environment is always about strengthening the relationship with the client. It should result in a better solution for their problem. Bad selling happens when a client is pushed to purchase something that won’t benefit her and therefore damages the relationship.
Make certain your team members understand that you only want them to do what will strengthen their relationship with their clients and not the reverse. This will help your team members feel more positive about suggesting extra services or items to their clients, and they will be less resistant to the idea of making beneficial recommendations.
When a client achieves a better, faster solution to their problem they will be grateful.
It’s always a good business strategy to ensure your clients are aware of the additional services you have available for them, as this awareness will help when it comes to suggesting something they may not have tried previously.
Don’t fall into the trap of assuming your clients are fully aware of all your spa has to offer, as few actually are this aware.
One way to create additional awareness is to add your service extras to your Service Menu, grouped with the services they complement. Upgrades such as serums, masks or LED therapy can all be grouped within the Facial and Skin Treatment categories so that clients can easily see what else is appropriate and available to them.
Apply this concept to all your extra options where room permits.
The Best Time to Suggest and Up-sell
The last thing you want your therapists to do is chat all the way through a relaxation-based service and leave the client feeling annoyed and deprived of their special relaxation time. This means you need to be strategic about choosing the best time to introduce the idea of a little something extra.
So, when should it be done?
The ideal time, in most cases, is either during or just after the consultation phase of the treatment, but before the main body of the treatment begins. The therapist should have completed her examination of the treatment area and asked the client questions about her problems and expectations.
If your therapists are not providing pre-treatment consultations, they are depriving themselves of a great deal of important information that will help them to not only deliver a much better service, but also make useful recommendations for extras.
How to Up-sell in the Treatment Room
Once the consultation is complete, make yourself easily seen by the client. If she is already on the treatment couch, then come around to the side and bring yourself down to her level by sitting on a stool.
Place yourself in a position where the clients can see and interact freely with you to reduce any feeling of intimidation.
As you make your suggestions, phrase them in a way that highlights the benefits they will receive relative to the problem they are trying to solve. If your suggestions don’t relate to fixing problems the client believes are important, she simply won’t be interested and a quick ‘no thanks’ will follow.
Here’s an example:
The client has expressed issues around her recurring acne breakouts. She is booked in for a deep cleansing treatment but nothing else.
After consultation, the therapist determines that a suitable serum applied under an infusion mask will reliably provide much better results for the client.
The conversation would go along the lines of, “Sara, it’s great that you’ve booked in the for Deep Cleanse Treatment today. That will definitely get you started on your journey to clearer skin. I’d also like to suggest we apply a healing serum and infusion mask also to give you even better results from your treatment. Are you okay with that? The extra serum and mask will be $20 but the results will be worth it.”
Note: I always recommend you provide your clients with full disclosure on the additional cost to avoid any problems when it comes time to pay for their service. Surprises at the register are never a good idea!
If you have a Client Service Agreement document in place, be sure to add the relevant details outlining additional costs for extra services here also.
If you follow the guidelines in this article, it won’t be long before you see a real improvement in your revenue. If you’re offering performance bonuses, your team will also see worthwhile benefits. This means that your spa, your therapists and your clients will all benefit from this sales strategy.
It’s not good enough to just go from day to day making a basic living from your salon or spa. Each day should be taking you a little closer to the business you dreamed of having, but that doesn’t happen by accident.
As the saying goes… ‘If you’re not prepared to change what your doing, don’t expect anything else to change’.
Having said that, you don’t need to make the process any more difficult than it needs to be. Good, productive and profitable changes can often be achieved in the simplest of ways. You don’t need to be an expert in ‘everything business’ to steadily increase your business growth and profits.
In this article, we’ll take a look at 6 easy ways to make worthwhile changes to your beauty business that will result in positive growth.
Get Your Team Excited About Retail Sales.
Let me tell you, this has to be one of the fastest way to add great profits to your bottom line. Extra profits means you can invest in more equipment, better training, staff incentives, updated décor, more retail stock and a host of other great things that are most likely on your wish list.
For the same amount of time invested, retail sales will return 3 – 4 times more profit than delivering most services. That’s pretty amazing don’t you agree?
To increase retail sales and get your team motivated, you need to ensure:
a. Team members are all using the product your stock.
b. Team members all have a sales target to work towards.
c. Team members have the training and knowledge they need to talk to clients about the product benefits.
d. The salon has the right product in sufficient quantities to generate sales.
Have a Marketing Plan
If you want new clients to find you and existing clients to stay loyal to you, then you absolutely must have some kind of marketing plan. It’s doesn’t need to be flash or fancy, but it does need to be written down and applied consistently.
You may well have the best treatments, delivered by the best staff members, at the best prices, but if no-one knows about any of it, then you won’t sell anything. It’s not good enough just to be great at what you do – no matter how many times you may see this said on social media!
You not only need to be great at what you do, but you must make sure people know about it. After all, you can’t sell a secret.
Reward Client Loyalty
There is almost nothing as important to your business as retaining the loyalty of your clients. After working with a truck-load of salons, I’ve realised that in nearly every instance, organic growth was pretty great, however the reason the businesses weren’t growing was poor client retention.
These days, your clients have a ton of salons and spas to choose from. Organic loyalty is pretty much dead in the water. So, to keep your clients returning, you need to dangle the proverbial carrot in the form of a loyalty reward. It will provide that extra incentive for your clients to return to your business to collect their reward points rather than trying out the salon or spa down the road.
Create a Benefits-Based Service Menu
When you think about it, the first thing many prospective clients come across is your Service Menu. They usually head straight to your menu to find out what you offer and how much you charge.
If your menu is constructed poorly, the client will only focus on the price of your services and that’s not how you want to be judged. Instead of the price, you want your clients to focus on the benefits they’ll receive if they have your treatments.
There are other factors with your printed menu that need to be considered also. Colours, print size, font, categories and layout are all important to ensure easy readability for your readers.
A well-constructed Service Menu will help you sell services to your prospects and clients without you even being present!
Work Towards Attracting Only Premium Clients
Do you ever feel like the clients who come to your salon or spa are exactly the opposite of the clients you really want to work with? Believe me, you are not alone. Most salon or spa owners will say that they want to attract a certain type of clients (big spender, loyal, refers others) but instead seem to always attract clients who are looking for a bargain, won’t purchase retail and never re-book.
The truth is that in most instances, the salon’s own marketing is to blame for this. The wrong clients walk through your salon doors because inadvertently you are asking them to. But the good news is that you can turn that around and become much better at attracting the premium clients instead.
This can make a massive impact on your business. Imagine finding clients who value your work, pay your prices happily and buy the retail products you recommend. Now that would make going to work each day pure bliss!
Increase Your Service Prices
Be honest! How long has it been since you’ve put up your prices? If it’s been over 12 months then you are due to have a price increase right now.
If you continue to hold off, eventually your profit will dwindle due to increasing expenses, and this means less for you.
A small regular price increase, while not being heartily welcomed with open arms by your clients, is expected and accepted. The problem occurs when all those small price increases are held off resulting in a massive price increase all at once.
And there you have it. 6 simple and straightforward ways to grow your salon or spa business. Why not get started on implementing them straight away?
The fairy tale version of owning a salon or spa is that you learn your trade, start your own business, deliver outstanding treatments and gain a large and loyal clientele that will make you both rich and fulfilled. This is the happy-ever-after version!
The truth, however, is that you learn your trade, start your own business, deliver outstanding treatments and struggle constantly to pay your bills, take home a wage for yourself and make any kind of profit to re-invest into your business.
Things used to be sooo much easier!
The internet and social media didn’t exist and you didn’t have to contend with other salons competing energetically for your clients. On top of this, the beauty industry has also undergone a pretty intense revolution in the past 15 or so years with the introduction of more potent (and more expensive) products along with high-tech equipment now needed to deliver the level of results clients expect to get. In other words, everything just costs more; and so more revenue needs to be generated to cover those higher costs.
All in all, the fairy tale version is done and dusted and newer, better strategies are now needed to generate more revenue and hopefully bigger profits that will help you to thrive and grow in your business.
And that’s where retail sales stride into the profit equation.
When you sell a service you are, in fact, selling your time. But time is finite and so it’s important to understand that retailing can actually return 2-3+ times more profit (depending on the markup of your salon or spa retail range) for the same amount of time invested in producing a sale.
Both services and retail have a base cost but the important difference is in the time it takes to generate the sale. As an example, if you provide services for an hour and earn $75, you would make around $37.50 (average) in gross profit. However, if you sell a skincare product for $75 (with 100% markup) you would also make $37.50 in gross profit.
The difference, of course, is the time taken to generate the same amount of profit – 1 hour to deliver services vs 10-15 mins to sell a retail product.
These figures will vary a little from salon to salon due to the cost of labour and products as well as retail mark-ups, but there is absolutely no doubt that retailing is a far superior way to generate gross profits.
So now that you’re convinced you to need to sell more retail, what happens next? Here’s an overview of points to consider.
Recruitment – If retail sales are important to your long-term success (and they are), hire people who are not only good technically but who also have a proven sales record. Many therapists and stylists hate to sell. They are simply not comfortable with the process for a variety of personal reasons, so make sure that you focus on the retail capabilities of your new hires during the recruitment phase. You will struggle big-time to convert someone who hates selling into even a mediocre retailer.
Training – No-one can sell something they know nothing about. Make sure your team members know your product ranges inside and out. Also, ensure they use these products personally as team members generally sell more successfully if they truly believe in the products they’re selling.
Targets – We all work better when we work towards a target. Keep your sales targets realistic and achievable and help team members to improve the skills they need to achieve them. Once they reach their targets, reward them appropriately.
Product Range – No matter how fantastic a product range is, if it’s too expensive or too cheap for your clients, you will find it hard to sell. Also, look for a range of products that offers your salon or spa a 100% markup and is not readily available online.
In summary, retailing should never be treated lightly in your business as it can literally make or break your business financially. Remember, the profits from retailing can far outweigh the profits from providing services and so it deserves your full attention and planning.
I’m often asked this question by salon and spa owners, ‘How can I increase my revenue (turnover)?’ In fact, if staying in business and taking home a decent personal wage are the goals, the question should actually be ‘How can I make more profit in my business without working any harder than I already do?’
Almost every salon or spa owner I’ve met is already a very hard worker who puts in longer hours than nearly all their employees. They’re often the first in to open the doors each day and the ones left to lock up each night.
If this sounds a lot like you, then working harder is not something you should have to do, however working smarter certainly is!
Taking time out of the everyday grind to work on business growth strategies is an activity some salon owners are not that comfortable with.
After all, if they’re working on their business, they have to pay someone else to care for the clients, and that is often a frightening prospect on many levels.
But the truth is that working productively on your business by developing your marketing ideas, planning staff training sessions, investigating new service options, or developing a more streamlined roster, amongst many other things, can actually be the best use of your time.
Yes, you may earn an additional $50 by providing that client service yourself but a well thought out marketing strategy might bring you an additional $5000 instead. It’s really all about using your existing working hours more effectively.
If you’re in the rut of working too many hours in your business rather than spending some quality time working on your business, then read on to discover effective ways to break the cycle of chasing revenue instead of making a profit.
Remember, revenue is just the money that goes into your register and this figure means very little at the end of the day, especially if every dollar is consumed by expenses.
Instead, you need to focus your efforts on is how to keep as big a portion of your revenue as possible, because this becomes your profit (and the only thing that really matters in the long run).
Here are 5 profit-generating strategies that you should implement into your beauty business asap.
Strategy #1 – Start making a profit from your salon services.
This is a no-compromise strategy. Every service you provide must make you some profit, and to ensure this you must first know what each service costs you to provide. Guessing is not good enough.
Forget about what the salon down the road is charging or what your suppliers tell you is the ‘normal average selling price’. These figures are meaningless to your business.
The salon down the road may be slowly going broke because of the way they do business and the supplier has absolutely no idea about what your unique expenses actually are.
So, the only person who can work out a profitable selling price for your services in your business is you.
Consider the labour cost, the product cost and the consumable cost to work out a service cost price. Then, before you decide on a selling price, remember that you also have to cover every other expense your business generates also (rent, utilities, marketing, etc.), and only then can you set a selling price that will ensure you make a profit.
Strategy #2 – Start charging what you’re worth.
Stop attracting those cheap-skate, discount-seeking clients who will never make you a penny in profit. You know the ones I mean. They’re the clients who only materialise when you’re selling something with a discount attached to it.
In business, as in life, we get what we aim for. If you want to attract more profitable clients, stop making every marketing offer into a discount-fest. Find better ways to position yourself by offering value to your clients instead of discounts.
If you’re offering professional services in a professional environment, then you deserve to ask a professional price for them. It’s important that you don’t undervalue yourself if you don’t want your clients to undervalue you.
One of the biggest expenses in any beauty business is undoubtedly the wages. Now, while you definitely need staff to deliver the services to your clients as your business grows, what you don’t need is them standing around for hours on end making cuppas, chatting and dusting the product shelves for the 6th time that week.
So, what should you do if this is happening in your salon? The answer is ‘measure and monitor’. Understanding the productivity of each team member is vital so you can determine how many hours you need them to work on your roster. Things you must monitor as a minimum are:
How many dollars per client they generate,
How many dollars per week they generate,
How many clients per week they service,
How much of the revenue they earn is going back out in their wages? (Hint: If it’s more than 35%, you need to find out why.)
You need to understand all these figures for each staff member and then take appropriate action to reduces excess wages where needed by amending your roster.
If you’re not already doing this, I recommend you start straight away.
Minimising unnecessary wages will often make the difference between taking home a pay packet or not for yourself.
Strategy #4 – Make more money from each salon client.
If you can’t get more clients into your business, then you have to make more money from each client. Easy to say, I know, but not that hard to do when you put your mind to it.
The obvious solution is to have a price increase, especially if you’ve been holding off for far too long because you believe your clients might not want to pay a little more.
The fact is you are in business. You are not a charity!
Your clients also know this but the longer you hold off having a much-needed price increase, the more the clients won’t like it when the time comes.
With this in mind, work out your true costs (see Strategy #1) and set a price for your services that will make you a fair profit.
Regular small price increases are less likely to upset your clients’ budgets than a huge price increase once every couple of years.
Another method to lift the average client spend amount is to up-sell additional services.
So many of your clients would happily purchase more if only they were asked to (nicely of course).
Your clients may be missing out on services they’d thoroughly enjoy and benefit from because no-one has told them about a new and improved service, or an add-on service that would complement the service they’ve booked in for.
Here’s a FACT. If you don’t ask you don’t get. Talk to your clients about the services they might be interested in trying and make a goal to upsell to every client.
And what about selling courses of services. This is always a good idea as it not only provides good value for the client (generally with a bonus service included), but you get a lovely chunk of money up-front that keeps the client returning to you over a set period of time.
Courses rock when it comes to making more profit and you should seriously think about how to maximise your sales using them more often.
Finally, how’s your retailing?
Are you monitoring and measuring it?
Do you have some goals in place?
Something that many salon and spa owners don’t know is that retail sales can offer 2-3 times more profit for the time invested than delivering services.
Learn the art of retailing and teach your staff how to retail as well. This one strategy alone will make a huge and positive impact on your profits.
Every dollar you outlay on unnecessary expenses is a dollar out of your profit (that means less in your holiday fund).
If you haven’t looked at the reports your accountant sends you each year, take a big gulp of something to calm your nerves and go find your last expenses report (I promise you will live through this experience, although you may come away feeling a little traumatised and in need a little nap to fully recover).
Now you have that report in hand, read through your expenses list.
What jumps out at you?
What appears to be way higher than you thought it would be?
Are these expenses ones you can do something about?
Some expenses are a necessity and impossible to budge but others can be culled or reduced without any ill effects to your business.
What expenses are a good investment (like quality coaching and training) and which ones should be minimised?
You’re bound to discover you’re spending way too much money in some areas, and this knowledge will allow you to reduce some of your expenses and therefore increase your profits.
And there we have it. 5 simple but effective strategies that will put more profits into your pocket without working any harder or longer. Be brave and do what’s needed so that you can enjoy your business knowing there’s a payday for you at the end of the week also.