Q & A with John Harms: Maximizing Referrals, Rebooking & Retail Sales

Q: Maximizing referrals, rebooking and retail sales have long been the gold standard in driving salon success. Can you give us any insight about national averages for each? And for those of us who don't aspire to “average,” what do you suggest as goals for each of these areas?

John: Over the years, we’ve been lucky to see the data from tens of thousands of salons and stylists. National averages are good to know as a benchmark, but keep in mind that variables such as your location, whether or not you’re in a big city, and whether or not you are located in a mall or a hotel all affect these numbers.

Rebooking: The national average is only around 10 percent, which means most salons don’t do it well (if at all).

The biggest challenge in rebooking successfully is understanding how to go about it. You don’t want to ask, “Would you like to book your next appointment?” Nine out of 10 people will say, “No thank you” or “I’ll check my schedule and get back to you.”

The right way to increase rebooking is to build a full-blown culture with your staff that says WE REBOOK ALL GUESTS. It works for dentist offices—and we know it can work for salons! The service provider should begin the rebooking discussion while the client is still in the chair. A recommended time frame to come back should be prescribed, and when the client is brought to the front desk, the stylist will say, “I need to see John in three weeks.” Software like Millennium and Meevo will auto-find the next available appointments in the appropriate time frame while the client is being checked out. Their confirmed next appointment will also show on their receipt. It’s highly efficient and it works! With the right attitudes, understanding and approach, many salons reach 75 percent rebooking (resulting in big increases in productivity behind the chair and at the reception desk—with fewer phone calls!)

New Client Retention: The national average is 35 percent. Looking more closely at this the data: Only one in 10 new clients make it to a sixth visit. Shocked? We were too. You should shoot for 50 percent retention for the second visit. Note that both rebooking and client loyalty programs can help build that retention number.

Repeat Client Retention: The industry average is 70 percent but I suggest 85 percent as an appropriate goal. Loyalty programs and systems, fresh paint, happy staff and being up on trends can help build this number. Loyalty programs also help increase your referrals. You should have a way to measure referrals and know whether or not your systems are working.

Average Ticket: No industry average really exists due to the varied factors that impact pricing nationally. At Millennium, we’ve analyzed our diverse client data and determined that their average ticket is around $80. Whatever your average is, analyze it and then try to increase it $5-$10 per guest by simply adding on a conditioning treatment, upgrading the service, etc. P.S. Don’t forget to charge for add-ons.

Retail as a percentage of total sales is a dismal 10 percent. That means this industry has not figured out how to encourage the staff to sell or suggest retail. We are working on ways to encourage retail sales in a “fun” social way. There are salon owners I’ve met who realize the importance of retail sales and the way it helps increase bottom line profitability. Many prioritize assignments of new client walk-in appointments based on stylist retail average ticket the month prior. So it you want walk-ins and the best chance of filling your book with clients—you need to consistently sell retail.

More on Retail: Retail average units per guest are 1.5 units. This means that on average, salons are selling about one-and-a-half products on each client ticket. As a goal, know that there are salons that regularly hit 3.0 units per guest. Nationally, only one in five clients buys retail. By having a focused retail culture and the systems and training needed to maximize sales, many salons get that up to three out of five clients buying retail.

These are just some of the numbers we come across. I hope this helps you benchmark where you are at and gives you some ideas on goals as well as the steps needed to improve performance in each of these areas. 

John Harms
Millennium Systems International, Founder and CEO
 
About: John Harms, Founder & CEO of Millennium Systems International, creator of Millennium Software, has been designing industry leading salon scheduling software and educating the beauty & wellness industry since 1987. Today Millennium is utilized in thousands of businesses in over 38 countries and operating with approximately 150+ employees worldwide.  Millennium currently runs its corporate headquarters out of New Jersey and its international office is based in the U.K. 
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