To achieve profitability on the spa side of your world, it all comes down to how productive you can make that treatment room and its attending professionals. to get you on the upswing, these spa leaders share their favorite bottom-line-focused strategies.
You hate to reduce your life’s passion to $/hr., but there it is: Without high hourly productivity, running a spa is just spinning your wheels. With today’s software happily spitting out any earnings benchmark we request—per hour, per month, per square foot, per employee—owners are able to monitor the precise angle of the graph. Yet while conventional wisdom says knowledge is power, knowing where you are does not ensure you can figure out how to bend that graph line upward and get where you want to go.
“Most spas are sitting at a 60- to 70-percent productivity,” confirms Shelley Bawiec, director of spa sales and education for Aveda. In a robust economy, you can’t simply wave your magic wand and raise prices to give both you and your team higher income without bleeding clientele. Current economical conditions, however, require more business head than sleight of hand.
“I haven’t changed my menu in three years,” says Patricia Owen, owner of Faces DaySpa in Hilton Head, South Carolina. “When you pay on a commission structure, raising prices doesn’t really make that much of a difference for the salon.”
When Owen does finally raise prices, she plans to frame the price hike as a service fee and communicate her compensation structure to technicians in terms of a set pay-per-service figure for each menu item:
|Faces’ Compensation Comparison|
|40% Commission Model|
Facial price is raised from $85 to $90.
Esthetician’s share increases from $34 to $36.
Salon’s share increases from $51 to $54.
Facial price is raised from $85 to $90.
Esthetician’s set pay remains at $34.
Salon’s income increases from $51 to $56.
OWEN ALSO FOUND a way to squeeze one extra hour per room per day, which adds up to significantly increased productivity over a full year. “We cut our services by 10 minutes but loaded them with value-added extras,” she explains. A 60-minute facial is now 50 minutes, but clients were too delighted with the enhanced experience to notice the clipped hour.
Value-added becomes revenue-added when the extras hike a price tag without additional time—a scalp massage, UV protection, aromatherapy, a lip or toe wax, nail strengthener, callous removal and toenail art like a pink ribbon during October or polka dots in the summertime.
“Our technicians understand what recommending add-on services can do for their paycheck,” says Owen.
Faces further has found a rich vein in anti-aging hand treatments, which do require extra time. “You can get $75 to $85 out of a manicure if you think about what that client really needs,” Owen notes. “Estée Lauder said that women are not buying a lipstick; they’re buying a beautiful mouth. Some women coming in for a manicure are really trying to have beautiful hands.”
At Ginger Bay Salon and Spa in St. Louis, clients can enjoy a complimentary “spa ritual” hand-and-arm massage or foot soak with every treatment but pay an additional $15 to supplement a massage or facial with something such as hot stones, a facial mask or an additional ampule.
“Our therapists also consult about an eyebrow shape and other waxing services,” says owner Laura Ortmann. “They’re good at capitalizing on those opportunities if time allows, but for us it’s just as much about improving the experience as increasing the ticket.”
Although smart owners train the front desk to up-service over the phone, Owen stresses that this is a much easier sell once the client arrives. To facilitate that, her front desk recommends a Skin-Specific Facial to every new client who calls to book a facial, and in person the esthetician can upsell to a rosacea facial or anti-aging treatment as part of the analysis and consultation. The client also fills out a questionnaire, which gives the esthetician further information.
“With nails, we have the front desk start with a service the person will be wowed with, not the standard pronto pedicure,” Owen adds. “We know our Pedicure of the Month is our most popular service, so we offer that first.”
|“If a guest calls for a 1:30 appointment, which would leave a 10-minute
hole in your book, train your front desk person to say, ‘We have a 1:20
appointment open. Would that time be convenient for you?’ Those
10-minute gaps all day long add up and cost you dearly.”
—Patricia Owen, owner, Faces DaySpa
Express to Impress
While some services work well as add-ons, others can stand alone. “The game-changer is the 20-minute, problem-solving treatment,” says Jane Wurwand, founder of Dermalogica and the Dermalogical Institute. “The key is to move skin care out of the back room and up into the front, out of the cave!” With neither disrobing nor an appointment necessary, these targeted treatments address a specific challenge such as arresting a blemish in progress or reviving jet-lagged skin.
“A lip renewal, flash exfoliation, blackhead relief or eye rescue can be the gateway,” Wurwand adds. These skin care try-outs can lead clients to ask for more comprehensive spa treatments and purchase home maintenance products.
Aveda recently developed its Beauty on Demand campaign specifically to address this concept of time-crunched services that supply tangible, immediate results while fitting into a spot like the color-processing time lag. Priced at $10 to $35, Aveda’s five services, carrying simple names like “Glow” and “Balance,” comprise: an exfoliating face peel; a “brightening” facial; a quick anti-aging treatment; a neck, shoulder and scalp massage; and an exfoliating hand massage. After experiencing the service, the guest receives a bounce-back invitation for a full-length treatment. One salon reports that half of the clients who tried a Beauty on Demand service subsequently booked a full treatment.
“It’s about using these services as an introduction to the spa’s full-time services,” says Aveda’s Bawiec.
“Since it touches the whole team, this can’t be a program that only spa technicians know about. The front desk must be well-versed in introducing Beauty on Demand services, your spa technicians must be proficient in delivering them and the hair stylists also must be informed enough to suggest it, since clients tend to trust their hair stylist’s recommendations. For salons that have taken this comprehensive approach, the concept has been transformational. We’re seeing $600 to $4,000 in monthly gain, with the biggest benefits showing up in retail.”
The Express Beauty Bar at Faces has become this type of service-to-retail avenue for high-ticket items. “We’ve set it up with little beauty tools people use at home,” Owen says. In performing a service with hair removal tools, home micro-current equipment or a home LED, the technician also is effectively demonstrating the home care tools and products.
Space is Money
As a revenue generator, a skin care bar is a better use of space than what many spas now have up front, Wurwand says. “I recommend that the waiting area be ‘cleansed’ of the sofa and coffee table,” she advises. “Convert this area into a Skin Bar with a counter, a few high stools, personal steamers, mirrors and supplies for sampling to let people get their hands into the product. This is called ‘try-vertising,’ and the tester unit is just the beginning. When people can sit in a casual environment, have a healthful beverage and sample, sample, sample, there’s no need for pressure to buy, because people simply can’t resist.”
A good floor plan will have an appropriate ratio of revenue-generating to nonrevenue- generating spaces, says industry coach Nancy Nemer of Red Cashew Consultants. Flow is important, too. “If the dispensary sits in an inconvenient location or there’s no sink in the dispensary, and the staff has to run around to get everything done, you’re losing time and your return on investment,” Nemer adds.
Faces owner Patricia Owen charges technicians a six percent backbar fee before calculating the commission on the service. “That’s really what it costs me,” Owen asserts. “Otherwise, you’re paying commission on your cost of supplies.”
Consultant Nancy Nemer advises owners to delve even deeper into product cost, computing the precise product investment for every service. “You may not want to charge a higher price for long-hair color services,” she says, “but if you’re going into an extra tube, you need to make up that cost.” Likewise, if you have an esthetician who enjoys using two ampules for an oxygenating facial, either ban her from doing that or designate a separate name and price point for her facial.
At many spas, the extra ampule or color tube isn’t going on the body; it’s going down the drain. “To avoid product waste and shrinkage, many successful spas really dispense in their dispensaries,” Nemer adds. “The lead therapist or manager will issue product for all of the morning’s services.”
Your product line may make it easy for you. “We’ve always been dedicated to the idea of dose-specific packages,” says Jane Wurwand of Dermalogica. “For instance, a pump delivers just the right amount of product, versus a big open jar with a spatula or scoop, and it avoids contamination as well. The big answer, though, is continually educating the team. Ingredient technologies are evolving at lightning speed. A therapist who doesn’t realize what a new exfoliant accelerator system can do, for instance, may be using double the amount of exfoliant needed. It’s essential to continue taking classes to learn what products can do and how to use them.”
When Ortmann gave her second line, Murad, more prominence, she increased the line’s performance by $38,000. “More guests became aware that we carry Murad, and people in the neighborhood began stopping in to purchase it,” she reports.
“Remember that you are not selling ‘Namaste’ hoodies, candles, jewelry or antioxidant candy bars,” advises Wurwand.
“Keep your precious shelf space for the best skin care products on the market. And here’s a practical tip: eye-level is ‘buy’ level. Place your hottest sellers at about five feet from the floor, and be sure there are always a few of every SKU freshly stocked and ready to be grabbed.”
With her private label line, Owen keeps a good chunk of her retail dollars. Furthermore, requiring no manufacturer permission, the private label gives her the option of stretching her spa’s retail potential by taking it online, truly making it limitless.
But while the internet is open 24/7, your salon does not necessarily benefit from trying to mirror that schedule. “We recently expanded our hours, and we’re watching how productive we are at those hours,” Owen adds. “If the 7-8 p.m. hour is getting only a couple of appointments, it’s better to limit your nights because your support staff has to be there no matter what.”
That’s the very reason owner Christine Castle decided against staying open on Sundays at Dana Lauren Salon and Spa in Broadview Heights, Ohio. “Sunday wasn’t going to be productive enough to justify having the receptionist and the hourly people,” Castle says. “And I don’t think our stylists want to work on Sundays. I’m a firm believer in needing downtime to recharge your batteries.”
Even if you do build in essential downtime like lunch breaks, when you look at productivity through the profit-per-employee lens, it makes sense to give your highest-paid team members optimum conditions for generating revenue.
“Understand your labor costs,” says Nemer. “While it’s fine for the owner or a stylist to occasionally take a used coffee cup to the sink, you can bring in people at a much lower wage to sweep the floor and wash the cups. Any stylist who isn’t busy should be following up with phone calls to clients.”
Sought-after industry speaker Dee DeLuca-Mattos agrees that an apprentice program or a staff of assistants can fill a lot of duties while licensed team members attend to the business at hand. When assistants apply color, for instance, “the hair stylist has the ability to have multiple services going on at the same time,” says DeLuca-Mattos, vice-president of Avance and president of the Medical Spa Society.
|“Keep your precious shelf space for the best
skin care products on the market. And here’s a
practical tip: eye-level is ‘buy’ level.”
“In the spa, assistants can turn over the room for the technician while that technician is waxing another client. Monitoring productivity means determining how to get the most out of each day, from the front desk to the service providers to the cleaning people. If the receptionist is spending 10 minutes on every call, she’s not being productive and that’s hurting the salon’s overall productivity.”
The art of booking, too, should be developed to maximize the spa’s productivity.
When booking multiple services, your front desk staff should aim for a sensible booking order—accommodating the time it takes to drain a tub and streamlining the process so that clients need to disrobe only once. Of course, the most important person in your spa is you, the owner. “If you’re a working owner, you just have to make sure you dedicate time to running the business,” says DeLuca-Mattos. “Even if it’s just one hour a day. It’s so important.”
That doesn’t mean the owner must address every minor administrative issue that pops up, clarifies Nemer. “Will you leave a client to run around trying to resolve a bounced check problem?” she asks. “Owners of smaller businesses especially can get caught up in the small stuff.”
Ultimately, every salon and spa business is different, and having measurement tools in place is the only way to pinpoint the leaks in productivity.
“There isn’t any magic number for earnings- per-hour,” says DeLuca-Mattos. “Let’s say your average ticket is $50, and when you investigate you find that 75 percent of your tickets are single services. In that case, your strategy should be turning those tickets into multiple service tickets. But if your average ticket is $150 and you see that it’s driven by your top levels, you should work on building your lower-level team members. You have to dissect the business to see what is working and what isn’t.”