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.

Pay-per-service Model
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.

Analyzing Costs

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.”

Evaluating the effectiveness of your
retail section may be the simplest way to
target productivity. “You have just so many
square feet,” Owen says. “If it’s all dedicated
to spa services, in 12 hours there’s
only so much you can accomplish. But
retail conceivably can sell out every day
and you can restock.”

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.”

Team Assignments

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.”

—Jane Wurwand

“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.”