March 18, 2019 | By Neil Ducoff | 3 Comments
The dilemma for salons/spas is that they suffer both the loss of revenue and client loyalty when a busy service provider leaves.
The salon/spa industry is known for its notorious employee turnover rate. It is also ground zero for the business wrecking ball known as a “walkout.”
Owners hire stylists, estheticians, massage therapists and other service providers with the expectation that they should “build” themselves.
The thinking is that the more service providers fill their columns on the appointment book, the busier and more successful the salon/spa becomes.
The overriding question all owners must answer is — Are you growing individuals or growing your company?
THE ACID TEST: Look at all those client names on all those columns on the appointment book and ask yourself, “Are these clients loyal to my company, or are they loyal to the names at the top of the columns?”
FACT 1: If you’re growing individuals, be prepared to lose clients, revenue and cash flow.... Read More
February 25, 2019 | By Neil Ducoff | 2 Comments
FACT: Delivering consistently extraordinary customer experiences in a salon/spa is the result of the seamless integration of the “hands that do work” and the “minds that care for guests.”
At first, they were called “receptionists.” They answered the phones, booked appointments, greeted clients and checked them out.
As salons and spas evolved into more sophisticated businesses, they were upgraded to “coordinators” because it became obvious how the right individual(s) at the front desk can influence the overall productivity of the entire team.
Today, “guest care” has become the catch-all term to describe the front-line team of employees that are responsible for executing a multitude of systems that include:
- Mastering the company’s point-of-sale software system
- Supporting company service and retail goals
- Drive productivity and client retention rates
- Manage the appointment book for efficiency
- Effectively, patiently and flawlessly handle the phone
- Sell and close retail sales
- Prebook appointments
- Anticipate and respond to customer needs
- Ensure that everyone is on schedule
- Represent the image and brand of the salon/spa
There is no question that it takes the right individual to successfully fulfill a guest care position at today’s salon/spa.... Read More
November 12, 2018 | By Neil Ducoff | No Comments
When it comes to tracking first-time and existing client retention rates, one rule does not fit all business models.
Today, the beauty industry landscape is a complex mixture of salons, spas, blow-dry salons, curly hair salons, medical spas, skin care, massage, nails, lash, hair replacement, waxing and other industry business models.
The longstanding approach to tracking first-time and existing client retention of examining one month and the number and percentage of return client visits within 90 days of that month, requires some modification based on the business model.
Frank Zito, from Ten Friends Blow Dry & Style House in Hinsdale, IL, posted the following question on our Facebook discussion group, Strategies Salon Spa Business Idea Exchange.
Why is the recommended date range 90 days? Is that just a “how it’s always been” kind of a thing? We are a blow dry salon that doesn’t do haircuts and color. I feel like 90 days may be more full-service salon/spa specific. What is the risk of using a 30-day or 60-day return period?... Read More
November 5, 2018 | By Neil Ducoff | No Comments
It doesn’t matter how busy, big or beautiful your salon/spa is, if you want to know just how good your business is, take a hard look at your client retention rates.
FACT: Client retention rate tells the truth about the quality and consistency of the technical skills and customer service experiences your salon/spa delivers.
First-Time Client Retention Rate: The number and percentage of first-time clients serviced in one month that return within 90 days.
- The conversion rate of first-time clients to a second vision is the true acid test on the level of quality your salon/spa delivers.
- First-time client retention rate shows the number and percent of clients added to your existing client data base.
Existing Client Retention Rate: The number and percentage of existing clients serviced in one month that return within 90 days.
- Existing client retention rate shows the number and percent of existing clients that return within 90 days.
- The number and percent that DO NOT return is your company’s client attrition rate.
- KEY: If your first-time retention rate is not adding enough clients to offset attrition, it’s a major red flag that needs a solution.
Here are my SEVEN No-Compromise Leadership reality checks on Client Retention Rates:... Read More
May 7, 2018 | By Neil Ducoff | No Comments
On a busy day, take up a position near your front desk. Listen to the checkout dialog between clients and guest services. Observe for 30 full minutes. Process what you see and hear.
Answer these questions:
- How many service clients did you observe walking out without a commitment to return?
- What does this say about your salon/spa’s systems, consistency and accountability?
- What are you going to do about it?
Client frequency of visit (number of client visits per year) and client retention (first visit and existing) are powerful critical numbers.
- If your salon/spa’s overall frequency of visit increases by just one, its impact on productivity rate and annual revenues can be profound.
- Higher first-time and existing retention rates are a prime indicator that your team is delivering quality services and those extraordinary customer service experiences.
FACT: Productivity rate, client retention rate and higher frequency of visit are Outcomes. (An outcome is the end result of specific functions and activities.) The key Driver for these Outcomes is your Pre-Book Rate.... Read More
October 17, 2016 | By Bruce Hourigan | 1 Comment
Guest contributor: Stan Bialecki, Strategies Director of Business Development … and salon owner
Has this ever happened in your salon or spa?
You’re excited about this Saturday…
A quick check of the appointment book on Friday night shows an amazing 87% booked. You sleep well assured that Saturday is going to be a great day.
The team arrives and they are excited for a busy Saturday. Then at 7:30am, things start to fall apart…
The first two clients don’t show up for their appointments.... Read More
October 3, 2016 | By Bruce Hourigan | No Comments
By Stan Bialecki, Guest Monday Morning Wake-Up Contributor
Has this ever happened in your salon or spa?
A client states that she’s not happy with her service or experience at your salon/spa. The service provider tells the client, “I gave you what you asked for … live with it for a few days … see if you like it.”
At checkout, a guest care team member completely dismisses the client’s concerns.
They think they handled the situation well.
…until the bad online review pops up twenty minutes after the client leaves your business.
Poorly addressing client situations happens far too often in our industry. It’s one of the reasons why the industry’s average first-time client retention rate continues to hover around a disconcerting thirty percent.... Read More
July 25, 2016 | By Neil Ducoff | No Comments
DEFINITION – First-Time Client Retention Rate: The percentage of first-time clients that return for a second visit within a specified period of time, usually ninety days.
Converting first-time clients into repeating loyal customers is the undisputed growth driver for salons and spas. In fact, it’s the undisputed growth driver for all businesses.
Here are my 12 No-Compromise Leadership crucial facts about first-time client retention (FTCR):
- FTCR is NOT about Request Rate: Request tracking is an old measurement system. It only measures “who asks for who” – not how many first-time clients return to the salon/spa for a second visit. FACT: Request rate measures if “a column on your appointment book” is building a following. At Strategies, we refer to “Request Rate” as a salon/spa’s “Walk-Out Factor.” If you want to know how much damage will be inflicted on your business if a “column on your appointment book” leaves … track individual request rates. If you want a “team-based culture” … never track individual request rates.
- FTCR is teamwork driven: Growing a successful salon/spa isn’t about how busy certain individuals are, it’s about how your entire team works in concert to create the highest levels of customer satisfaction. No matter how technically excellent the service is, indifference, attitude, lack of professionalism, appearance and other factors by one or more employees can degrade FTCR. That first visit is your one shot at making a great impression.
- FTCR is the prime factor for pay raises: Strategies’ prime issue with commission is that it is compensation based entirely on an individual’s service revenue. If you keep feeding new clients to a service provider with a low FTCR … you’re paying that service provider commission on every new client that he or she fails to retain. On Team-Based Pay, the first critical number that measures performance is FTCR. Low retention … no raise. TBP puts your payroll dollars where the performance is.
- FTCR measures if your systems are working: You go to a fine restaurant. The meal was amazing, but the service was horrible and it took forever for your meal to come out. You don’t return. The systems in the kitchen were malfunctioning. The wait staff was short-handed. It’s exactly the same at a salon/spa. A new client’s hair or spa service may have been wonderful, but if the elements surrounding and supporting it were not … the client may be lost. FTCR is a measurement of how thorough your systems are designed and executed. You cannot achieve impressive first-time client retention rates if your systems are misfiring.
- FTCR is your salon/spa’s Quality Score: If your salon/spa’s FTCR is 40 percent, that means 60 percent of the first-time clients you fight hard to attract are not returning. You can “believe” all you want that your salon/spa delivers on its promise to the customer, but if half or more of all first-time clients do not return … you and your team are talking quality more than delivering it.
- FTCR tells you truth about your brand: Building on the fact that FTCR is your Quality Score, FTCR also tells you if your brand image is rock solid or cracked and breaking up. FTCR is a powerful indicator of brand strength because it measures your salon/spa’s ability to satisfy and WOW new clients that were attracted via marketing, reputation and word of mouth. Converting a first-time client to an existing/retained client is the ultimate brand acid test.
- FTCR doesn’t care who a client returns to: FTCR is about building a company … not building a column on the appointment book. If a first-time client returns to the original service provider … great. If a first-time client returns to different service provider … great. Owners need to communicate to every employee that when a client returns to the business … it ensures the sustainability of the business and the growth opportunities for all employees. The higher the FTCR … the higher the salon/spa’s productivity rate. The FTCR battle cry is, “The skills of the entire team are available to each and every client.”
- FTCR and pre-book rate are interdependent: There is a direct correlation between pre-book rate and FTCR. The higher your salon/spa’s pre-book rate, the higher the client satisfaction rate … the higher your first-time and existing client retention rate. Hair grows back. One facial doesn’t fix a skin issue. Failure for a service provider to communicate the maintenance cycle for a service is a failure of professionalism. Allowing clients to walk out of your business without engaging your pre-book system is simply squandering the client retention and frequency of visit opportunity.
- FTCR is NOT about that “third visit”: Where the heck did the … “A client is not retained until the third visit”…come from? Guess what? If a first-time client doesn’t return for a second – there is nothing to track or retain. The first visit is the acid test. Pass it with flying colors.
- FTCR measures consistency: Is your salon/spa’s service experience truly consistent? Consistency creates predictability. Delivering great service every time, across all columns on the appointment book requires systems, training, coaching, measuring, etc. The lower your FTCR, the more inconsistent the customer experience is. If your vision is to deliver world-class service experiences … consistency is a non-negotiable.
- FTCR reflects your culture: Culture is the collective thinking and behavior of your salon/spa. The tighter and more disciplined your culture – the higher your FTCR. The more committed your team is to delivering the extraordinary service – the higher your FTCR. Likewise, the more country club and unstructured your salon/spa is, the more it springs leaks in revenue opportunity and its ability to attract and retain first-time clients.
- FTCR defines your leadership ability: The previous eleven crucial facts about FTCR all require a level of leadership that may be uncomfortable for many owners. Leadership is about taking a company and its team to a better place. The more you develop your leadership skills … the more impressive your FTCR. No compromise.
Quiz time! Let’s see how you score: Use these twelve crucial FTCR facts to rate your salon/spa. For each fact, rank how your business rates on a scale of one to ten (ten being extraordinary). Be brutally honest. Have staff members rank the salon/spa too. If you score a 90 to 120, your company is pretty extraordinary. The lower that score goes … the more work you need to do.... Read More
June 20, 2016 | By Neil Ducoff | No Comments
Everyone is accountable for customer loyalty.
Yes, customer loyalty begins with leadership and that’s where the problem can begin.
Leaders are notorious for going on those infamous rampages when a customer quits the salon/spa or when customer retention rates go critical. The no-compromise question to ask is, “Where is the accountability and how far down in the salon/spa does that accountability go?” Playing the blame game is a compromise and totally unacceptable.
The no-compromise leader places accountability for customer loyalty in the hands of every company employee.
It cannot be any other way.
For this level of accountability to exist, employees need to understand just how accountable they are. What I’m talking about here is a team-based business culture.
In a team-based business culture, ALL employees feel the pain of a lost customer. They feel the pain when a customer has a problem that could have been avoided.... Read More
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…... Read More
October 5, 2015 | By Neil Ducoff | No Comments
No-compromise leadership = Consistency across all four business outcomes (Productivity, Profitability, Staff Retention and Customer Loyalty). It’s such a simple equation. Yet, within its simplicity is a profound message to all who lead, or seek to lead others. The rich word for me here is consistency. Consistency is perhaps the most challenging aspect of no-compromise leadership to comprehend and live, because how one leads is influenced by the leader’s collective abilities, beliefs, behavior styles, perceptions and life experiences.
How long your voyage to no-compromise leadership will take depends on current behavior patterns. Some people are natural achievers while others are procrastinators. There are those who obsess over every minor detail in their quest for perfection. In leadership positions they can bog things down by micro-managing everything. At the other end of the spectrum are those who hate the details and do all they can to avoid them. In leadership positions, they can wreak havoc by communicating in such broad brush stokes that the outcomes they desire are vague and open to broad interpretation … if achieved at all. For a company’s performance and culture to be consistent, its leader must be a model of consistency. This is non-negotiable. It is one’s commitment and ability to be consistent that defines the no-compromise leader.... Read More
August 6, 2015 | By Eric Ducoff | 2 Comments
Before you begin laying out your retention program, you will quickly find that any program designed to improve your salon/spa’s client retention performance will cause you to rethink many aspects of your business.
This is because virtually everything that happens in a salon or spa directly affects client satisfaction to some degree. The reasons a client will move to another salon or spa are many and varied. A total retention program addresses as many of these reasons as possible. It can be overwhelming at first, that’s why we suggest you start with the basics and fine-tune your program as you gain confidence and control.
The following ground rules should be planned into your basic program:
- Track client retention — not request rates. Request rates do not have anything to do with client retention.
- Pre-book, pre-book, pre-book!!! It’s a simple concept, yet one that is desperately overlooked by most owners and service providers. Stop spending the marketing dollars to attract NEW clients, when you can work smarter (and keep all those marketing dollars) by pre-booking the clients you already have. And we don’t want to hear about client excuses. Spend an afternoon writing a script on how to position the importance of pre-booking, and watch your retention rates soar!
- Base service provider compensation on their ability to retain clients.
• Reward improving and excellent retention rates with a raise, bonus, prize, etc.
• Address poor and declining stylist retention rates quickly. Coach, train, mentor, etc., until rates improve within a specified time frame. Release the employee if there is no improvement.
- Assemble a basic assortment of marketing promotions to support retention.
• Develop programs aimed at first-time clients to get them back for a second visit. “Thank You” cards/e-mails, second visit discount cards/e-mails, haircut and massage club cards and other simple programs that encourage repeat visits. With the wealth of automated e-mail providers available these days (Demandforce, Aweber, Constant Contact, Infusionsoft, etc.) there is no excuse for skipping this step. Program it once and it’s done!
• Use call-back or e-mail campaigns to find out why first-time clients did not return.
- Profile and guide new client traffic.
• Match new clients with those stylists best suited to retain them based on skill level, personality and personal profile.
- Relentlessly communicate the goals with your team.
• Evaluate and review each service provider’s retention rates every month.
• Review retention goals during your daily huddles and weekly meetings.
• Post monthly retention rates in the dispensary. This will reinforce your resolve to improve retention and encourage stylists to reach for the best overall retention rate. They can’t play the game if they don’t know the score!
- Develop a marketing program to introduce clients to other qualified stylists.
• Print and mail an announcement card to your client list introducing your “total salon concept” that places the skills of the entire salon at the disposal of each client. You want clients to get comfortable with the idea that they can switch stylists within the salon.
- Perfect the teamwork concept.
• Every staff member should be working to achieve the salon’s goals.
• Set up team projects, retention evaluation committees, first-time client programs and other team-based efforts.
- Assemble a target list of real and potential retention problems at your salon/spa.
• Examine every major and minor detail of your operation; parking, music, cleanliness, retail displays, reception area, website, telephone answering techniques, signage, etc..
• Evaluate the skill level of each provider in each service category. If a service provider has a bad retention track record with a particular service — prohibit them from doing those services until trained and certified.
- Develop a client referral program that encourages retained clients to recommend your salon to friends, family and associates. We’ve seen salons and spas do very well with “send-a-friend” referrals and two-for-one promotions that are either simple cards that stylists hand out to clients, or automated e-mails that are sent out to pre-defined groups of clients.
- Make the commitment to develop your retention program and stick with it.
• Don’t try to accomplish everything too quickly. Develop your program and fine tune it as you gain control and master retention skills.
• Don’t leave retention to chance.
• Take the bull by the horns
Staff Involvement ... Read More