Navigating Through A Declining Customer Base

One of the biggest challenges facing salon owners who want to grow their business is monitoring employee and salon performance and effectively incentivizing their employees.

The tanning business is changing rapidly. What worked in the past, may no longer be effective. To demonstrate, let’s create a theoretical salon owner to demonstrate the point. To protect the innocent, let’s call him Mortimer.

Mortimer had a problem. Like many salon owners, Mortimer was experiencing a declining customer base. He wasn’t sure if it was due to a decline in disposable income from a worsening economy or because of all the negative press surrounding tanning. To make matters worse, his method of incentivizing employees, Per Tanner Average (PTA) was flawed. As fewer and fewer tanners came in the door, PTA averages rose. Since the employee bonuses were tied to PTA, their bonuses went up even though salon revenues were going down.

He knew there were better metrics he could use to appraise his employees’ performance and help close more long term memberships, but it took hours and hours each week to collect and enter all the data into the spreadsheet to run the calculations.

By the time the numbers were sent out to the employees, they were a week old. With the recent acquisition of two more salons and a new baby, Mortimer’s time was stretched very thin. He could hire someone to crunch numbers, but that would require a lot of training and just add more management headaches. He knew he had to do something, but what?

A friend in the industry had told him about Salon360, a dashboard service that pulls data in real time from the salon POS system and does all of those time consuming calculations for every employee and every store in seconds. The system could be modified to exempt promotional packages and other non-bonus transactions. He could set employee and store goals, and the employees could view their progress instantly, not a week later. He could view historical data and graphs of each employee and store to watch for trends. Reports showed up automatically in his e-mail, he didn’t have to pull them up or even be near a computer.

When Mortimer signed up for Salon360, he was able to analyze past metrics in the same way, and set up goals and incentives for his staff that they could track immediately. He was able to double his close rate on EFT memberships, and was able to increase upgrade and lotion sales tremendously. By using a system that gave him and his staff real time access to important data, he was able to grown revenue over last year even with less tanners.