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Retail: Turn Ideas into Action
By: Carol and Rob Trow
Posted: May 29, 2008, from the June 2008 issue of Skin Inc. magazine.
page 4 of 6
Moving into using commissions to motivate your staff, know that paying commissions is not effective unless you monitor performance and provide feedback to staff members every month to show them how they are doing. And there are several alternatives to paying straight commissions on sales. First, create a minimum sales volume for each staff member before commissions kick in, and make the percentages higher as an individual sells more. Increase percentages as sales volume goes up—for example, the first $500 week in sales pays 5% in commission. Then a $501–1,000 week pays 10%, and, beyond that, a week with more than $1,000 in sales pays a 15% commission or higher.
Another idea is to set up an incentive system based on sales as a percentage of service revenue by treatment type—if up to 40% of a service’s revenue is from retail sales, that leads to a 10% commission. Having 40–60% of the service revenue be from retail means a 15% commission, and a 20% or more commission would be when 60% of the service’s revenue is from retail sales. Still another option is to tie sales goals to specific treatments—for facials, 50% of the treatment revenue should in retail sales; for body treatments, 15% of revenue from retail sales; for laser services, 15–20%; 10% for injectibles; and 10–15% for hair and nails.
If none of these systems seem to fit your business, develop one of your own design. No one formula is perfect, so find the plan that makes selling the most exciting to your staff. And to be sure you are getting the right idea, involve team members in these discussions.
Essentially, an incentive program should be purpose-driven. Pick an area you want to see improvement in—such as the number of items sold, the average sales per team member, or promotion of a specific item or line—then be clear how the success will be measured, and state the reward specifically.
To also give retail sales an inventive flair, make it a game for your spa’s staff. Incentive programs that have been highly successful include:
- Tic Tac Toe—Make a board with squares, which does not necessarily have to be limited to nine. When an item is sold, have the seller put their initials in a square. The first person to make a line or the one with the most boxes at the end of the contest wins.
- Up, Up and Away—Fill balloons with coupons for prizes and money. Then, when a target or goal is hit, have the staffer break a balloon and win the subsequent prize.
- Got the Fever—Draw a simple thermometer on a large piece of paper with a goal number at the top, and color in the sales volume or item total along the way. The first team member to the top wins. This can also be used for an entire staff reward.
- Off to the Races—Set up a race track on a board with goal numbers on it, and assign each staff member a horse. The first one around the track wins.
- Poker—For each retail sales item or target hit, provide the team member with a card from a special deck. At the end of the contest period, the staffer who can make the best poker hand wins.
- Pass the Buck—The person with the highest single sale of the week, largest upgrade or other measured retail sales goal gets $25 or $50. Obviously, the first seller of the contest period is in the lead, so she gets to hold the money. As each subsequent sale is larger and larger, the person holding the $50 has to pass it to the new leader. The person holding the money at the end of the period gets to keep it.
- Go For the Gold—An Olympic-type competition that pays for achieving goals such as largest weekly sales, most items per sale, most sales per day or highest weekly sales. The goals can vary from week to week, as can the prizes, and you can rank staff members first, second, third and so on.