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Chapter 4: The Financial Abundance Factor

By: Jamie Scalise
Posted: June 16, 2009, from the July 2009 issue of Skin Inc. magazine.

page 3 of 19

Let’s get back to the Spa at DelMonte, where hypothetically Shauna the Esthetician has now read this book and is excited to use “The Power of Three Method”, but she is currently paid a flat hourly fee. And quite frankly she feels that she should be rewarded for her proactive efforts in implementing this method and making the spa more money, creating a win-win situation. That’s only fair, right?

Shauna decides to take her idea into the Spa Director and the plan they develop is simple. It’s based on a bonus for each time she, or the other providers perform the Kiss or Super Kiss instead of the Basic. There is no need to change the pay structure, as she’ll still be paid her flat hourly rate plus any “The Power of Three Method” upgrade bonus she earns each week.

In this case they decide it costs $3 in product to upgrade from Basic to Kiss, and $6 to upgrade from Basic to Super Kiss. Of course, the flat hourly pay and the owner’s hourly fixed costs are all the same since any and all of the choices are one hour long, so they don’t need to include them in the negotiations.

The additional profit (Kiss $140 minus Basic $95 = $45) from Basic to Kiss is, $45 - $3 (our cost of products), or $42. So they agree that of the extra $42 generated, Shauna and the other providers should get a bonus of $17 and the spa should keep $25 for each upgrade from Basic to Kiss. This amounts to an approximate 40% provider, 60% spa split.

In the case of a client upgrading from Basic to Super Kiss, the additional profit (Super Kiss $175 minus Basic $95 = $80) from Basic to Super Kiss is, $80 - $6 (our cost of products), or $74. Of this additional $74, they agree that providers should get a $30 bonus and the spa should keep $44 for each upgrade from Basic to Super Kiss, with the same approximate 40/60 split applied to this example. The split you and your management/team agree on is up to you and you alone.

Fictitious ‘Bonus’ Program for The Spa at DelMonte (with the base facial being the Basic @ $95)

Service

Price

Bonus Amount Paid

Spa Gets to Keep

Kiss

$140

$17

$25

Super Kiss