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If You Want a Salon/Spa Team — Pay Team
November 7, 2021 | By Neil Ducoff | No Comments
As a salon/spa owner, you want and expect the highest levels of teamwork in your company.
You want everyone on the same page.
And, you want your team to work together to grow your company so you can reward them better.
All owners want these things.
But in the salon/spa industry, there is a “way” things are done — the accepted way.
But what if that “way” is flawed?
What if there was a “different” way that was more effective, efficient, productive, stimulating, motivating, exciting, … and revolutionary?
What if this different way was the breakthrough you’ve been hoping and searching for?
And what if your response to this breakthrough way was, “This isn’t the way things are done.”? Poof … you watched opportunity pass you by.
In business, traditional ways of doing things are merely accepted habits. When time, circumstance, and new thinking merge, those habits are challenged. The flaws are revealed. A different way … a better way … emerges. Team-Based Pay was one of those “different” ways.
And guess what? Team-Based Pay wasn’t a fad either. It’s a proven compensation business model that has stood the test of time. The Team-Based Pay pioneers have been using it for decades — and more owners join their ranks every day.
Today, Strategies does more Team-Based Pay conversions in salons, spas, medspas, and barbershops of all shapes and sizes than ever before — because it works.
The Team-Based Pay business model creates growth opportunities for the business and its employees that the old way — the accepted way … the “commission way” … simply cannot.
Team-Based Pay appeals to owners and leaders that want to create something different and more dynamic for their companies, employees … and customers.
Here are some No-Compromise Leadership thoughts on the Team-Based Business Model:
- Commission isn’t THE BIG motivator: It has been proven time and time again that commission motivates the few … not the many. Not everyone is hungry for the dollar or motivated by money. Not everyone is blessed with the sales gene, in fact, most are not. Nowhere else is this more evident than in the salon/spa industry where “selling” retail for a commission is more bust than boom. Creative and skilled service providers are passionate about their work and the products they use, but when it comes to “selling” those products to earn a commission, most simply opt out because commission gives them the choice. Commission is simply not the motivator it’s cracked up to be. KEY: The motivation that drives productivity, engagement, and performance in a company is driven by its systems, leadership, … and its culture. Salons and spas on Team-Based Pay typically generate retail sales of 18% – 25%+ of total revenues … with NO retail commission.
- Commission is not and will never be “team-based”: Commission is an “I/me/mine” pay method that creates an “I/me/mine” business culture. My client. My time. My sale. My price. My schedule. And when client loyalty is to the “I/me/mine” individual and not your company or its brand … your company is an accident waiting to happen. Teamwork can only go so far in a commission environment. KEY: True teamwork demands an inclusive culture free of individual barriers. Geese fly in formation because the formation is “team-based.” If geese were on commission, it would be a drag race.
- Reward overall performance/contribution: Commission is pay based on a percentage of an individual’s sales. No matter how those sales are generated, employees get their commission. KEY: Team-Based Pay allows a company to reward each individual’s overall performance and contribution to the company and the team. It rewards the right attitude … not the wrong attitude. It rewards high client retention … not low client retention. It rewards retail recommendations and sales … not ignoring retail sales. It rewards consistency … not inconsistency. It rewards attendance and being on time … not absenteeism and lateness. If what gets rewarded gets repeated … then reward all the thinking and behaviors that define a great employee … not just sales.
- It’s about controlling the company’s payroll percentage: Business owners need to control their payroll expense percentage and you can’t control a commission-based payroll. As the cost of business rises, straight and sliding scale commission IS NOT sustainable long term. On commission, if sales go up, payroll goes up. Raise prices, payroll goes up. KEY: On TBP, service payroll is a controllable expense. Sales up. Payroll is fixed. Payroll % drops. Payroll increases are determined by cash flow. NOTE: If your service payroll percent exceeds 35% of Total Revenues (Service + Retail = Total Revenues) … your payroll is out of control. Implementing product/service charges is a band-aid that won’t fix a payroll that is sucking the financial life out of your company. You need a long-term solution … Team-Based Pay is a proven solution.
- It’s about driving your overall productivity rate: As an owner, you obsess over white space on the appointment book. KEY: What would happen if everyone obsessed? QUESTION: How quickly would white space fill if it was a team responsibility? QUESTION: How much better could you pay service providers if your company consistently enjoyed high productivity rates?
- It’s about Career Paths: The commission-based career path sounds like, “Grow your book. Raise your prices. Double book.” But employee income stalls when their hours are filled. That’s when suites and going independent appear as a logical next step — and the clients go with them. KEY: The Team-Based Pay career path sounds like, “Pay increases based on continued excellent overall performance. As long as service payroll % is within the Strategies benchmark of 30% – 35% of total revenue (Service + Retail), top-performing employees can be rewarded for continued excellent performance. And then there is Team Bonus.
Here’s my challenge to you: Implementing change is about creating opportunity for everyone that contributes to growing your company … and change rocks the boat.
If your business isn’t changing, adapting, and moving forward, why should employees hang around a company that isn’t going anywhere?
If you’re hesitant or afraid to rock your boat, your company is becoming irrelevant.
When leaving is more attractive than being an employee at your company … don’t blame anyone but the face in the mirror.
You owe it to yourself, your company, and your employees, to explore how the Team-Based Pay Business Model can help you create the business of your dreams.
Come join the largest gathering of Team-Based salons, spas, and medspas at the Team-Based Conference.
Categories: Team-Based Pay