Business is all about numbers and the LAST number you should stress about is TURNOVER.
Rather focus on the numbers that matter and watch your turnover grow.
How many clients visit the salon on a monthly, yearly basis? Is that number growing or shrinking? Every salon loses clients and, if you don't have a new client strategy, your client data base will continue to shrink. The most effective new client strategy is referrals. If clients really are loyal to you and your business they will willingly recommend their friends and colleagues, maybe all you need to do is ask them - and back that up with a dynamic loyalty programme.
Monitor the average docket value of each staff member. Clients are shoppers and will buy anything professionally recommended by an industry expert that really cares about improving the health of their client's hair. To optimise turnover, new clients should be booked first to staff generating the higher docket values. Docket values grow in direct relationship to the amount of training staff receive.
Your colour business should be no less than 40% of turnover. Your client database is probably around 65% female and 35% male and virtually every client has colour. So the question is, if not by you, where are they having their colour done? We will blogging about building a strong colour business in one of our next blogs.
And by the way, how many of your clients have a treatment with every chemical service, when in fact they all should? Sell treatments, promote treatments, include the treatment in the cost of a colour service, but clients MUST have a treatment after a chemical service. Could you imagine having an operation (the equivalent to a chemical service) and not having the anaesthetic and the painkillers and the antibiotics?
Focus on retail sales and monitor both individual and salon ratio of retail to services. Retail should be 20% of your turnover and yet most homecare products are bought at the supermarket - why is that? There is no more convenient place for clients to buy their home haircare products than in the salon environment! And they will, provided the salon creates the selling environment.
The number of clients leaving the salon, having pre-booked their next appointment, should be growing as stylists get used to promoting this business building, customer service strategy.
No matter what your turnover is, you will always make a profit PROVIDED you monitor the numbers on a daily basis and keep costs in line with turnover. QED
- Terry Miles, MD of MySalon Software
Email: info@mysalonsoftware.co.za
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