Leaders fail to achieve retail growth for many reasons, one being that they overlook the most important aspect of their business’ success — their team members. Team members play a vital role in retail sales. As a spa leader, you must truly grasp how important team members are to your success, and implement the following four essential business strategies to improve your retail sales once and for all.
SPAS LOSE PROFITS BY DEFAULTAt spas with low performing teams, guests arrive, receive their treatment and leave the spa empty-handed. They aren’t given any home maintenance advice or treatment upgrade recommendations. With each session that ends like this, your spa loses an opportunity to leverage your products and treatments to maximize the guest’s experience AND boost your revenues!
Billions of dollars are spent on beauty and self-care products every year! Unfortunately, most spas are not getting their share of the market, missing out on millions of dollars that can be generated from upgrade opportunities and retail sales.
Spa leaders constantly complain about the lack of retail and upgrade sales in their businesses, knowing that they’re not earning as much as they can. But when asked what the consequences are for team members who don’t meet sales targets, they don’t have an answer. How do you expect your team to improve performance and achieve results if they’re not held accountable?
Implement the following four steps to motivate your team to produce the results you desire, and begin tapping into these missed revenue opportunities:
1. Set Performance Expectations and MeasuresIf you don’t know what you’re aiming for, how will you know if you hit your target? Once you know what your expectations are, you will be able to measure them. You must set expectations to improve team performance. Your team must be fully aware of their professional obligations as therapists. Set specific targets for both treatment volume and retail volume per guest (see formulas on page 44). Then, measure results on a regular basis. Don’t wait until the end of the month to find out that your team didn’t hit your targets — by that time it’s too late. Track daily performance and watch your profits grow!
2. Link Compensation to PerformanceCompensation plays a huge role in boosting your revenues. A team member who is not recommending products and treatment upgrades does not deserve to earn the same amount of money as one who does. Tying service commission to retail commission is a guaranteed way to motivate the team to make recommendations.
3. Develop a Recommending SystemIt’s much easier for your team to recommend spa products and treatment upgrades if you have a recommending system in place. Systems ensure consistency, accuracy, and growth. I recommend a philosophy focused on delivering a complete, satisfying guest experience in the spa and at home. Implement a system in which your team members identify your guests’ needs or concerns, and then recommend the appropriate upgrades.
You can develop your own system customized to your own business’s way of doing things. It must be a system that you can teach your team, and one that allows you to measure effectiveness.
4. Training / Coaching the TeamPerformance improvement is an endless cycle, so your training and coaching efforts should be a never-ending process. Training is an essential component to your spa business success. It needs to be conducted often and involve role playing. Someone must be responsible for training and coaching the team. Your team members must role-play the process of recommending products and treatments. The more they do, the more confident they will be when suggesting in-spa and at-home regimens and treatments to your guests.
Team training should include knowledge of technical information, protocols, and the recommendation process to upgrade treatments and recommend home care options. Set a training schedule and make learning fun in your organization!
Beth Pestotnik, founder and CEO of Skin Essentials in Littleton, Colo., has achieved a Volume Per Guest (VPG) revenue of $189 from retail sales. Pestotnik swears by the VPG performance formula (right). This is a highly effective way of measuring the amount of revenue you generate, on average, for every guest.
SERVICE VOLUME FOR ONE MONTH
VOLUME PER GUEST FOR SERVICE
NUMBER OF GUESTS
The SAME FORMULA applies to retail sales:
RETAIL VOLUME FOR THE SAME PERIOD
RETAIL VOLUME PER GUEST
NUMBER OF GUESTS
Calculate your own VPG for each team member, set new targets, and apply the four steps. Make sure your team understands this new structure so you can enforce the consequences for non-performance.
CONSEQUENCES FOR NON-PERFORMANCEPerformance improvement and consequence setting start during the hiring process. Each new employee needs to leave the interview and orientation informed of the expectations of the position. The position description must outline your recommendation expectations, and your employee orientation manual needs to outline the consequences of not reaching those expectations. Your new hire needs to understand and agree to the performance expectations upon accepting the position. Only then can you can start managing and implementing rewards and recognition for them. If performance does not improve, consequences should progress accordingly:
– For new hires, additional training and coaching
– First verbal warning, more training
– First written warning, more training
– Second written warning, more training
– Refer them to your competition
Invest in team members who want to develop their skills and grow, not those who don’t understand the importance of home care and fulfilling their professional obligation.
COMMON MISTAKEMost spa leaders train their treatment and reception team on the technical aspects of their job, but drop the ball on business training. Focus first on spa business training, and then invest in team development — teaching them the essential skills for spa success and what that could mean for them — you will be amazed at the total transformation of your team!
Make the commitment to deliver a great guest experience and business excellence today! Focus on these four strategies and maximize your revenue generation.