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10 Reasons to Track Client Retention — Not Request Rates
March 4, 2016 | By Eric Ducoff | No Comments
Are you getting what you pay for?
What many salon and spa owners fail to realize, is that if they are tracking request rates, they may be being misled into paying big bucks for poor performance.
And what’s worse, it’s costing their salon or spa more than just high payroll expenses.
Let’s look at an example:
You’ve got a service provider with a 90-100% request rate and a waiting list. They’ve been with you for years, and you’ve watched their request rate slowly increase over time. They’ve now achieved “rock star” status and deserve a higher pay scale, right? Not so fast…
Here is what many salon and spa owners fail to take into consideration…
What if your “rock star’s” first-time client retention rate was at 26%? Meaning, for every 10 new clients they see, at least 7 never come back…
- Would you still be eager to assign those hard-won and precious first-time clients to this technician?
- Would you still feel like they deserve a higher pay scale?
- Or even what they’re being paid now?
Certainly not until some additional skill and customer service training is completed.
The point to this example, is that tracking request rates doesn’t provide any useful information to the business…
…and you need to stop tracking request rates now.
The trackable number that matters most to your business is client retention, and if you’re not tracking it now, contact your software provider and learn how to start running the necessary reports.
Client retention builds client loyalty to the business, and provides a highly reliable score of a company’s success at delivering True Quality experiences. It’s a rallying point for all processes – technical, interpersonal and customer service. No other score takes precedence.
Request tracking is old technology. It only specifies the percentage of clients that ask for a technician. It never reveals how many clients the technician didn’t satisfy during the time it took to build their request rate – or at what cost to the business. Moreover, request tracking encourages the stylist followings that owners fear and guard against.
Afraid of stylists leaving for booth rental or suites? Your request rates are essentially their “walkout score”. As soon as request rates hit the high double-digits, you’ve just given them the green light to take those clients elsewhere.
Here are Strategies’ 1o reasons to track client retention, and not request rates:
- Client retention is your Total Quality score. Client retention reflects a series of positive occurrences which has led the client to return. Reward and encourage those occurrences.
- Request rates encourage stylist followings. Clients are conditioned for stylist loyalty—not salon and spa loyalty. They will follow the service provider versus staying with the salon/spa.
- Request rates mask poor client retention. Request rates only show you the active clients in your salon or spa, not all of the others who visited the business and decided not to return.
- Requests limit clients’ choice of service provider. If a client is pushed to work with a stylist or service provider they don’t like, the client may leave the salon/spa altogether, thus lowering retention.
- Request rates are not a growth indicator. You want more clients than the salon or spa can handle, not more than the service providers can. And, you may not be retaining these clients (especially if the requests are from a special offer).
- Base compensation on client retention. A stylist’s or massage therapist’s client retention rate is the most important variable for determining increases in compensation. How many clients were serviced and how many came back?
- Client retention is team-based. Requests pit service providers against each other in a fight for client dollars. Client retention encourages clients to be serviced by a team of professionals.
- Request rates result in gridlock. By promoting and rewarding request rates, service providers reach a point of saturation when they cannot successfully service more new clients.
- Tracking retention saves advertising dollars. As retention improves, you can cut back on advertising because you potentially need to attract less new clients to reach your goals.
- Client retention will uncover client attrition. You need to know how many clients you have lost along the way during any given year.
If you’re still tracking requests, it’s time to stop…right now. If you’re not tracking client retention, take the time to learn how to get these reports from your point-of-sale software. There a many different ways to run retention reports, and some are more useful than others.
Need some help with getting started? Talk to a Strategies coach. We’re happy to help.