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Profit From a Performance-based Pay Structure

By: Denise Dubois
Posted: November 29, 2012, from the December 2012 issue of Skin Inc. magazine.
performance-based spa pay structure

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You can work on their consultation skills or hone in on what additional education is needed, whether it’s technical skills, simple product knowledge or the ability to thoroughly identify client expectations. If clients are not coming back after seeing a certain service provider, then something is wrong and it needs to be corrected. Whether it’s quality of service, personality, poor consultation or simply a lack of rescheduling, it is very important to track the reason for a service provider’s low client retention rate. Gaining new clients is very costly, so it’s important to retain them once they walk through the door.

Measure new client retention rates by calculating the new clients from a specific time period, such as January 1–January 31, and compare it to the next three months—February 1–April 30—to see how many of the new clients have returned. The percentage ensures service providers are planning for their clients’ next visits and making that a part of their service plan. Again, it’s an opportunity to further train the service provider on their consultation and maintenance recommendations with the client. A 40% retention rate is a good goal to reach.

New client referrals

New client referrals indicates the number of new clients that come to the skin care facility who were referred to a specific service provider. The service provider should be actively trying to bring in new business for themselves each month. When you track this number, two things happen: They take some responsibility for their growth, and they can’t blame anyone else for their schedule not being busy. A good starting goal for referrals is 12 new clients each month. Providers can accomplish this by handing out business cards; getting out of the back room and introducing themselves to clients arriving at the facility for other services; getting involved in in-house events to showcase their work; and promoting their business outside the facility. Bridal shows, fashion shows, charity events and social media websites are all excellent avenues to find and bring in new clients

Another good opportunity to grow this number is to have a Refer and Receive program in place in which the service provider hands out cards to the clients in their care to pass along to their friends. When the friend comes in, she receives a special discount and the referring client is sent a thank-you along with a special gift or discount. Monitoring the new customer referral number engages service providers in their own growth and holds them responsible as well. They are rewarded with new clients and referrals for making the best use of their down time to actively seek new clients for the business.

Pre-booking percentage

Pre-booking percentage is a measurement of how many clients pre-book their next appointment before they leave on the day of an appointment. If the service provider saw 40 clients during the pay period and 20 of them booked their next appointment before leaving, her pre-booking percentage would be 50% because half of the scheduled clients are pre-booked for their next appointment. Pre-booking increases the number of appointments clients have in a given year and results in their return in a timely manner to maintain the results of their in-spa treatment. A conversation should take place with clients during every appointment about when they need to return to maintain results. For example, a nail tech should let each client know how long a manicure will last and suggest a date for the next appointment.