August 25, 2019 | By Neil Ducoff | 1 Comment
The retailing of professional products through salons and spas is a no brainer. Always has been.
Retailing in salons and spas has also been a source of major frustration for owners and employees.
As an owner, you want employees to sell retail, while at the same time, many employees avoid selling retail as if “selling” is something evil. The infamous service provider excuse is, “I’m an artist, not a salesperson.”
Many years ago, Strategies started teaching and coaching a system we fondly call “Happiness.”
“Happiness” is simply a procedure that service providers are required to use at the end of a service — before the client leaves their chair, station or treatment room.
“Happiness” has the following five steps for a service provider to complete:
- Provide every client with a recap of the services/work completed.
- Verbally recommended professional products for the client to use between visits — and write the product names on the client traveler, ticket or designated piece of paper.
- Verbally explain the recommended maintenance cycle with an “on or about” date for the next visit — and write that “on or about” date down below the recommended products.
- Tell the client that guest services will assist the purchase of the recommended products and schedule (prebook) the client’s next appointment. (To drive prebook and client retention rates, guest services can schedule the next two or three appointments.)
- To complete the service provider’s “Happiness” requirements, the written recommendations for products and future appointments must be handed to guest services by the service provider, or designated employee.
“Happiness” has the following two requirements for guest services to complete at client checkout:... Read More
November 6, 2017 | By Neil Ducoff | No Comments
If you get caught speeding, you get a ticket.
In sports, if you commit a foul, you get penalized.
So, doesn’t it make perfect sense that if an employee breaks enough rules, he or she can be “disqualified” from team bonus?
The answer is YES, NO and it DEPENDS.
Strategies has been teaching the in’s and out’s of Team Bonus for over 24 years because it’s an integral element of our Team-Based Pay (TBP) business model.
NOTE: Team Bonus is not exclusive to TBP. It can add a “teamwork” incentive to any pay program.... Read More
May 15, 2017 | By Neil Ducoff | No Comments
Why would anyone open a salon, spa or medspa if it can’t make money? Especially when they’re notorious for operating at low single digit profits, or losing money … and plagued by staff walkouts.
It’s also true that many service provider owners wouldn’t get a paycheck if they weren’t working behind the chair or in the treatment room.
In fact, many owners realize they could make more money as employees in their business, working on the very compensation system they designed.
The true, but sobering, news is that when any business struggles to pay bills and create profit, it’s because their owners design and operate them that way.
The top four culprits are:
- Compensation systems that are financially unsustainable
- Undisciplined spending behaviors
- Excessive borrowing and credit card debt
- Excessive employee turnover
IMPORTANT: Throwing in the towel to go booth rental or suite is a knee-jerk reaction to a bad situation.... Read More
May 30, 2016 | By Neil Ducoff | 1 Comment
Why is it such a challenge for owners and staff to discuss service pricing with clients?
Why do owners have so much anxiety about doing a necessary and justified price increase?
The cost reality
There is a value to all of the training, experience and dedication to deliver the services salons and spas provide to clients … none of which is free of charge to the business.
- First and foremost, there is the cost of service payroll.
- There are guest services and administrative payroll costs.
- There is the cost of continuing technical and business education.
- There is a cost to using the finest professional products.
- There are overhead costs in the form of rent, utilities, insurance, maintenance, advertising, etc.
- There is the cost to build out and equip an attractive facility.
- There is the cost and repayment of debt that financed the start-up and/or periodic upgrading.
- There is the need for the business to generate a fair profit on revenues.
- Finally, there are the ever-increasing costs of doing business that eat away at profit.
Salons and spas sell time in exchange for services. Every hour that is sold … or unsold … has a cost. That means every service hour MUST be priced according to its “cost per hour + desired profit margin.”... Read More
April 25, 2016 | By Neil Ducoff | No Comments
I was recently honored to be the opening keynote speaker at the two-day Art of Business seminar in Philadelphia.
One of the benefits of being the opening speaker is that attendees get to hear my content and have the rest of the event to discuss their challenges with me. My keynote was on “Creating Profit.”
Rather than putting 450 people to sleep with the mechanics of financial statements, I focused on the thinking, behavior and decision-making that create profit.
- I addressed the belief that getting busier and driving top-line revenue is no guarantee that profit will occur.
- I addressed how to accurately forecast monthly revenue and expense budgets.
- I addressed the monumental task of controlling payroll costs.
- I drove home how sloppy spending decisions chew away at profit … and add debt.
- I emphasized the need for building cash reserves.
After my keynote, I spent the remainder of the seminar at a table talking to owners and answering questions. Keynotes are fun, but one-on-one conversations bring out the real issues.... Read More
February 29, 2016 | By Neil Ducoff | No Comments
Are you scheduling appointments or just filling orders?
Whenever a salesperson is referred to as an “order taker,” it means that salesperson lacks the initiative and experience to truly engage, discover and understand the needs of the customer.
The order taker goes after the “what do you need today” low hanging fruit and moves on.
A true salesperson, on the other hand, asks questions, listens intently, identifies problems, provides solutions, educates and builds relationships.
I’m not suggesting that order takers don’t work hard, because they do. They cover a lot of ground and talk to a lot of customers. It’s hard work collecting all that low hanging fruit.... Read More
December 21, 2015 | By Neil Ducoff | 1 Comment
Consider the annual income of three salon/spa employees from entry-level to senior service provider. If the-entry-level employee is making $10 an hour and working 40 hours per week, the annual gross income will be $20,800. A mid level service provider at a rate of $20 an hour, working 40 hours per week, will earn $41,600. A master level service provider at $45 an hour, working 40 hours per week, will earn $93,600. (Tip income is not included.)
Now, let’s go shopping for a new car in the $20,800 price range. There is a wide selection of economy-priced cars on the market today. From an expectation point of view, you want a decent level of quality, performance, comfort and some nice features like Bluetooth phone connectivity. You know your expectations must be in line with your budget – but you also will not accept any car that doesn’t meet your minimum expectations. QUESTION: When paying an entry-level service provider $20,800, why would you accept anything less than your minimum expectations?... Read More
November 30, 2015 | By Neil Ducoff | 2 Comments
Any discussion on salon/spa service pricing can quickly turn into a debate based on historic practices, entitlement, ego and emotions. That being said, what follows is sure to open a “can of worms” debate.
A debate is a formal discussion of opposing viewpoints where the best debater is crowned the winner. My intent is not to win a debate, but to create an awareness of the issues and practices that do more to compromise and complicate salon/spa pricing than help it.
But, if anyone wants to debate, sound business practices will beat entitlement, ego and emotional arguments every time.
As you will read, most of the service pricing issues are more salon related than spa. Why? Because there is a heck of a lot more entitlement, ego and emotional stuff that exists on the salon side of the industry. Spa pricing is more consistent across service providers … even those with many years of experience. That’s so not true on the salon side where many price levels can exist within the same salon and are justified by the size of stylist’s clientele and years of experience.... Read More
November 23, 2015 | By Neil Ducoff | No Comments
Getting busier and working harder can drive top-line revenue, but more revenue is no guarantee that profit will occur. The process of creating profit is far more complex than selling more services and products and then checking that last line on your Profit & Loss Statement to see if Net Profit is positive or negative. Unfortunately, too many owners leave profit to hope, good luck and a favorable nod from the business gods. Of course, creating profit takes hard work, but it takes hard work and focus on the right things at the right time. Only then do you have the best chance of finding your salon/spa’s profit sweet spot.
Profit is the end result of a number of critical operational and financial disciplines. Think of it as an on going dialing in of systems, performance, information flow and a relentless commitment to paying attention to your numbers.
Here is a 7-point No-Compromise Leadership hit list that will help you dial-in and lock-in your salon/spa’s profit sweet spot:... Read More
November 16, 2015 | By Neil Ducoff | No Comments
Systems bring structure and discipline to the profit creation process. Accuracy and extreme attention to detail is nothing short of non-negotiable. As a business coach, I’ve seen more than my share of “garbage in, garbage out” accounting and financial reports. Blatant errors, improperly posted or categorized entries, expense line items that no one can explain, and huge miscellaneous accounts, are just a sampling of the financial nightmares that regularly occur when poorly designed systems exist. The end result is totally useless financial reports. You just can’t make the best financial decisions with bad data. And with all due respect, sloppiness in the bookkeeping office is a darn good signal that compromise exists at the leadership level. Otherwise, such nonsense would never be tolerated for even a nanosecond.
Profitability systems extend far beyond general bookkeeping. When revenues are generated, there needs to be financial systems in place to ensure proper reporting. And wherever money is spent and purchases made, financial systems must be in place. Checks and balances, there is no other way to control and drive profitability.... Read More
November 9, 2015 | By Neil Ducoff | 2 Comments
Profit is simply a measurement of business performance. It’s the reward for generating revenues, doing great work and staying within budget. Job security, advancement, better benefits, being able to invest in the best training, getting the best equipment, etc., are all part of profitability. Realizing all of the amazing opportunities that profitability can deliver will require a no-compromise sense of urgency. Urgency is paramount to achieving profitability.
When a salon/spa business culture takes a lethargic, lack-of-urgency approach to profitability, it gets in its own way. It’s akin to letting go of the controls that allow leadership to guide business activities toward its profitability goals. The cash-flow plan is demoted to the “optional task list,” or evolves into nothing more than an annual ritual that is rarely, if ever, looked at or put into play. Reviewing financial reports or having cash-flow planning meetings happens when it happens, if at all. Financial discipline and consistency is out the window.... 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
September 7, 2015 | By Neil Ducoff | No Comments
Business is about driving growth and making progress. The only way to measure that growth and to know if your company is making progress is to have monthly goals. Interestingly, no matter how scientific or mathematically savvy you are at goal setting, a goal is simply your best guess. If you’re overly optimistic, your goal guesses will tend to be more aggressive and require high levels of coordination and effort. If you’re overly conservative, your goal guesses will be conservatively middle of the road. If your overly pessimistic, your goal guesses will typically reflect the lethargic state of your company under your leadership. If you don’t set monthly revenue goals, you are leaving the fate of your company up to the powers of the universe which translates into, “If you don’t care, neither will the universe.”
Given that a goal is simply a best guess, the secrets to achieving monthly goals have everything to do with how you position, approach and apply effort to achieving those goals. If you want to lose weight and get fit, the first step is to make an unwavering commitment to losing weight and getting fit. I use the word “unwavering” because anything less leaves room for that rogue Twinkie and too many naps. Then comes the diet and fitness plan. Once the plan is set, it’s all about effort and execution. The more focused, intense and flawless the execution, the better the results and the closer you get to your weight and fitness goal. It’s the same in business.... Read More
April 7, 2014 | By Neil Ducoff | No Comments
At Strategies, every aspect of our business training and coaching is focused on what we call The Four Business Outcomes: productivity, profitability, staff retention and customer loyalty. Business success, and your success as a leader, is defined not only by the proficiency and mastery of each outcome, but by how equally you balance and synchronize The Four Business Outcomes. Think of each Outcome as one of the four powerful jet engines on a Boeing 747. Maximum efficiency and thrust to lift the 875,000 pound jetliner with over 500 passengers and cargo requires all four engines to be in sync. Should one engine underperform or fail, the performance and safety of the entire jetliner is compromised.
Outcomes are an end result. High productivity rates are an outcome. Impressive Balance Sheets and Profit & Loss Statements are outcomes. A unified and cohesive company culture with little employee turnover is an outcome. Fiercely loyal customers and high client retention rates are outcomes. In order to produce extraordinary outcomes, you’ve got to get the drivers right.... Read More
March 31, 2014 | By Neil Ducoff | No Comments
When no-compromise leadership targets the profitability business outcome, it does so with a by-the-book discipline. That means that fiscal responsibility is practiced at every level of the business, from the leader and the leadership team to every salesperson, service provider, assistant, guest services representative and maintenance worker. Everyone pushes the numbers in the right direction. This becomes a culture in which everyone is responsible – everyone is accountable. Waste or cost without purpose is unacceptable.
Just as you can see, feel and measure a business with a high-performance productivity culture, so too you can see, feel and measure a business with a high-fiscally responsible culture. It doesn’t mean the company is “tight” or “penny-pinching”; it simply means that purpose and discipline are the rule with regard to how it deals with money, spending and cash-flow management.... Read More
March 24, 2014 | By Neil Ducoff | No Comments
The best-of-the-best are committed to doing the “work” of business. They don’t avoid the stuff they don’t like or the tough stuff that defines a leader’s determination to win. Just like profitability, success is an outcome. Leaders and companies that master the disciplines of success stand out from their competition.
Using a simple grading system of 1 to 10 (10 being truly outstanding), each characteristic listed below establishes a benchmark that you can use to quickly assess the viability of any business … including yours. Using this approach, a score of 10 for each characteristic will yield a perfect score of 100.... Read More
October 21, 2013 | By Neil Ducoff | No Comments
Consistency is a beautiful thing. It’s what makes great companies truly great. It’s about a company’s commitment to getting it right not just some of the time, but all of the time. Going for consistency means that, as a leader, you are prepared to do what others will not. You are prepared to do whatever it takes and define yourself as a true No-Compromise Leader.
Consistency is about the execution of work and systems to exacting standards. It’s what defines world-class service. It’s embedded in the thinking and behavior of a company’s culture. Anything less than total consistency is a compromise. But it’s the journey to consistency that most leaders underestimate in terms of degree of difficulty and time. Consistency is something a company chases for a long time, and only those committed for the long haul stand a chance of catching it. (more…)... Read More
June 17, 2013 | By Neil Ducoff | 4 Comments
I was in Livermore, CA, last week doing a private No-Compromise Leadership training session for a client and friend. I stayed over an extra day so we could do a bike ride through the beautiful vineyards and countryside. While riding, we got into a discussion about time management. I said, “Manage time like money. Think of all the stuff you need to accomplish as if they are line items on a Profit and Loss Statement. Income is your time. Now, what would you do differently?”
Time truly is like money. We only have so much of it and always wish we had more. If we are frugal with it, we can maximize our time, invest it wisely, and be incredibly productive. We can squander our time by being disorganized, lazy, and a master of procrastination. Lastly, we can allow our time to be stolen by others simply because we let them. Like money, time will disappear if you don’t pay attention and budget it like the precious resource it is. (more…)... Read More
February 11, 2013 | By Neil Ducoff | 3 Comments
One of the great mysteries in business is why profit isn’t cash. Well, it’s not really a mystery – profit is more like an abstraction that requires further interpretation to fully understand its meaning. We can all agree that creating profit is a good thing and that negative profit (loss) is a bad thing. However, the mind games begin when there is profit but no money in the checking account. And why don’t you go out of business when your profit and loss statements keep showing negative profit? The answer is simple: profit isn’t cash. Hmmm … perhaps it is a mystery after all.... Read More
October 8, 2012 | By Neil Ducoff | 6 Comments
Profit is a strange little beast. Leaders fight for it – and obsess over it – but profit doesn’t mean cash in the bank. It’s like profit is some sort of sick mind game where you can be profitable and broke at the same time. Even crazier is that profit can be negative for extended periods and you’re still in business. And the ultimate body blow is when you have to pay taxes profit even though there’s little or no cash. Clearly it’s better to show a profit than a loss, but wouldn’t it be nice if you could get some control over that little beast?
September 28, 2012 | By Bruce Hourigan | 2 Comments
John Cougar Mellencamp said it best: “Hurts so good. Come on baby make it hurt so good”.
Personally, I can think of a few times when that statement was actually true. One time was when I finished my first marathon in 95-degree weather. All the pain and commitment from months of training finally paid off as I crossed the finish line after 26.2 miles. Another was recently when I had to have physical therapy on my shoulder due to two dislocated ribs. As a stylist of 29 years, the pain in my shoulder had become almost unbearable when I would blow dry. My physical therapist pulled, twisted, massaged and made major adjustments that were down-right painful, but at the same time “hurt so good”. Now I’m on my way to a full recovery thanks to the pain I was willing to endure to get the end result.
Now let’s put a spin on this and relate it to running your salon or spa business. Do you have some painful areas that are clouding your vision for your company? Or perhaps there are some sore spots you need to address, such as people on your team that you would be better off without? Maybe you need to make some serious financial cuts that would be painful at first, but in the end would be more beneficial for the company and your financial future? The pain is worth the end result.... Read More
August 2, 2012 | By Eric Ducoff | No Comments
Successful promotions and events play a pivotal role in every salon or spa’s bottom-line health. The added influx of service clients and retail/gift certificate sales — not to mention the often deeper-discounted purchasing opportunities presented by manufacturers and distributors — are simply a “no brainer” to take advantage of. The good news is, most salons and spas do offer promotions throughout the year. The bad news is, many of them are often poorly planned, and do not take full advantage of the opportunities presented to them.
But lets get back to the good news. Executing killer promotions in your salon or spa doesn’t have to be daunting. All it takes is some effective and creative planning.
Here are six ways to help you get the most out of your salon/spa promotions:
- What’s your plan? It seems like every year, we’re hit with more and more promotional opportunities: Mother’s Day, Valentine’s Day, Breast Cancer Awareness Month, Back-to-School — these are just the tip of the iceberg. In order to make sure that you and your staff are ready for each promotion, it’s imperative that you get your plan down on paper. You need to define what supplies are needed, who does what and when it needs to be completed. All that information then needs to be transferred to a main promotional calendar that the entire business lives by. Better yet, enter the dates into your computer or smart phone so you get automated reminders!
- Make a date out of it! Promotions don’t just have to be centered around holidays and distributor/manufacture deals — make them an event! Schedule special dates throughout the year that will appeal to different demographics within your client base. Ladies night, mom’s night, guys’ night, or even a Super Bowl night — get creative and get your staff involved in the planning.
- Don’t forget to sweat the small stuff: Remember we mentioned how critically important it is to get everything you need for a successful promotion down on paper? Dedicate a quick meeting with your team to brainstorm each and every item needed to ensure upcoming promotions or events are a success.
- Budget, budget, budget! That last thing you want to do it is put time and effort into a promotion or event, only to find out that it actually lost money for your business. Yes, there are times when it does make sense to chalk one up as a “marketing expense”, but at the end of the day, the name of the game is driving increased revenue. With that said, the most critically-important step for any promotion is to plug it into your cash-flow plan to see if the business can afford it — and to forecast how much return you will get on your investment.
- Who pays for it? Although it can be sore subject, it’s one that needs to be addressed beforehand. If you are on a commission-based compensation structure, your staff needs to be made aware how they are going to be compensated if the business is promoting discounted services. Will their commission be based on the standard full-price (thus costing the business even MORE money to run the promotion) or will they be expected to invest in the promotion by taking a percentage of the lower promotional price. Luckily, if you are using a Team-Based Pay or salary/hourly model, this is a moot point.
- Get staff involved: One of the best ways to get your team members excited about upcoming promotions is to involve them in the planning process. They’re creative — use that resource!
Want to ensure your 2013 promotional and marketing plan is down on paper before January rolls around? Don’t miss Strategies Salon/Spa Game-Planning Retreat on September 30 – October 2, 2012 at the Strategies Business Academy in Centerbrook, CT. Learn more here.... Read More
July 9, 2012 | By Neil Ducoff | 10 Comments
You can lead a company that delivers extraordinary customer service, generates impressive sales, and from all outward appearances appears wildly successful – but if your company is fighting cash flow, it’s functioning under extreme financial stress. Cash is the fuel of business. If the business is starved for cash and running on fumes, it is officially in survival mode and begging for relief. It is the toughest position for any leader to be in because it is often unclear and complicated which path to take to lead the company back to daylight and fiscal stability.
Fact: Cash is king – but you knew that. Cash gives a company power and options that cash-starved companies just don’t have. Cash is “sleep good at night money” because it creates a sense of security. Cash is truly precious. So, with all the upsides to building cash reserves, why do so many leaders focus on driving everything but cash flow?... Read More
June 4, 2012 | By Neil Ducoff | 1 Comment
If you were leading a publicly held company, your ultimate job responsibility would be to create value for the stockholders. Run an innovative, efficient, fiscally responsible, customer-service driven company with a strong brand identity, on a consistent manageable growth track, and the stockholders love you – and you get to keep your job. Wow, in one big sentence I just encapsulated the primary objective of a successful CEO who reports to the Board of Directors that represent the stockholders. At the end of the day, business and leadership is about growing the value of the company.... Read More
May 24, 2012 | By nducoff | 4 Comments
Pre-booking is merely the practice of asking your guests for the permission to book their next appointments before they check out. It’s centered on maintaining and fulfilling their needs. Pre-booking increases productivity, drives revenue, helps with staff retention and improves customer loyalty.
Here’s your pre-booking to-do list: (Goal: Build a total “Client Experience System” that includes pre-booking.)
- Ensure your team understands:
- What pre-booking is.
- Why they need to do it.
- How to do it. (More on that below.)
- How it will be evaluated.
- Develop the process. It’s as simple as asking the client how she feels about her service. You’ve just opened the door to make the recommendation for the next visit, which may involve the same service and/or the addition of a complementary service.
- Have your team build scripts to successfully pre-book.
- Role-play using the scripts so that they feel natural. This will help your staff feel comfortable recommending pre-booking and dealing with different responses from customers.
- Be sure your front-desk/guest-services team has the scripts to successfully pre-book. The goal is that every guest is pre-booked. Everyone is responsible.
- Communicate the progress daily.
- Ask your staff: “What can I do to help you reach pre-book success?”
What should this the pre-book score look like?... Read More
May 14, 2012 | By Neil Ducoff | 1 Comment
True forward momentum pushes through any obstacle. It has an implied efficiency because once an object achieves a certain level of forward momentum, it requires less energy to maintain that speed. By connecting the physics of an object in motion (a piece of matter) to a business in motion (an idea/concept), you gain a unique perspective on how momentum can work for a business.
A start-up business requires massive amounts of energy to gain enough forward momentum to sustain itself. Once it achieves a level of sustainable momentum, you can dial back the throttle a bit and allow “physics” to work for you. In essence, the leader is “piloting” the business by adjusting throttle to maintain its forward momentum. Achieve a certain level and the company can easily break through obstacles such as competitors, cash crises, loss of key employees, bad decisions and other issues. However, every obstacle the company breaks through chips away at its momentum. If the leader fails to throttle up the company’s sense of urgency to overcome the obstacles in its way, it will lose its energy and eventually stall. (more…)... Read More
May 3, 2012 | By Bruce Hourigan | No Comments
You’d never open a salon without the proper tools — state-of-the-art scissors, top-of-the-line blow dryers and, of course, fabulous, effective products. Similarly, no one would try to run a spa without massage tables, pedi chairs and wonderful scrubs and lotions.
Unfortunately, many owners do try to run their salons and spas without the proper business tools needed to be profitable and successful.
Many salons and spas struggle with cash-flow and figuring out what’s coming in (and going out). Without a clear financial picture, it’s impossible to plan for steady growth, as expenses always pop up. Many owners (maybe even you) start using their personal credit cards to pay the bills — even to cover payroll. It’s impossible to build a strong business without a realistic cash-flow plan.
Numerous other owners and managers grapple with staff concerns, from hiring to pay design to performance evaluations. Some owners have leadership issues, uncertain how to translate their vision to their employees so that everyone is working toward the same goals. Proper communication is one of the first steps in building a successful business, yet it is one of the basics that many salon and spa owners believe they don’t have time for. A culture where employees want to do their best, stay and grow is one of the hallmarks of a thriving, profitable business.... Read More