Now more than ever, it’s crucial for salons to identify key performance indicators (KPIs) and set goals for their business and employees to achieve success.
While there are many you can choose to measure, these 6 KPIs are some of our favorites!
1) New Guests Per Month
An important KPI that helps measure business growth is New Guests Per Month, or the average number of new clients you are servicing each month. Unlike a few of the other KPIs on this list, there is no recommended goal, as it varies from business to business due to numerous factors.
Enhancing and adjusting your marketing strategy is critical to improving New Guests Per Month. Try to expand the methods you use to reach and engage new clients through social media, email marketing, and reputation management.
For example, when was the last time you managed your online reviews? Checking and responding to reviews can help boost your discoverability, making your salon more likely to show up in local search results!
2) New Client Retention
Once you get new clients into your salon through marketing or word of mouth, it’s critical to retain them to drive future revenue. By tracking New Client Retention, the percentage of new clients that visit and return for their 2nd visit within 90 days, you can understand just how effective your strategies are in retaining new clients.
The industry average for New Client Retention sits at 35%, but we recommend setting a goal of 50%. With this KPI, first impressions are everything. That’s why owners and Services Providers need to ensure that a new client’s first visit to your salon exceeds their expectations.
One idea is to create new client goodie bags filled with products and samples to try at home while also practicing rebooking during checkout.
3) Repeat Client Retention
Not only should you track how well you retain new clients, but you should do the same with existing customers. Repeat Client Retention is another critical KPI for salons, as repeat clients bring in 80% of revenue. The industry average sits at 75%, but our team recommends setting your goal at 85%.
How can your business accomplish (or ideally exceed) this goal? One tip is to practice rebooking at the end of every service. Clients are far more likely to schedule their next appointments during their current visit, so be sure all Service Providers are trained on how to rebook their clients effectively.
Email marketing also plays a significant role in bringing back repeat clients for their next service, especially when using personalization, audience segments, and A/B testing.
4) Frequency of Visit
Another KPI that’s important to salons is the average number of times a client visits in a year, or Frequency of Visit. The salon industry average is 4.88 visits per year (per customer), but setting a business goal of 7 to 8 times per year will help drive additional revenue.
To meet this KPI, try creating packages and memberships to offer your clients. Packages tend to be sold at a discounted rate since clients are paying for services in advance. However, this encourages clients to buy the packages and return to your salon.
Memberships are also valuable in improving Frequency of Visit. Those that offer monthly services help increase the likelihood of repeat appointments while also adding a recurring revenue stream for a salon.
Also, don’t forget about standing appointments, which our Founder and CEO, John Harms, says is the ultimate rebook!
5) Average Ticket
Increasing revenue is essential to continued success for salons. One way to track this is through your Average Ticket, the average dollar amount a guest spends per transaction. Goal setting for this KPI can vary for each business as it depends on many factors, including:
- Location
- Services offered
- Demographics
But a good number to strive for could be $5 extra dollars per guest.
Setting up add-ons through your salon software, like Meevo 2, can help to improve Average Ticket, as can product bundles. Both are great strategies to help drive additional revenue.
6) Productivity
Another KPI that is relevant to all salons is Productivity. This represents the measurement of how busy Service Providers are during scheduled business hours.
Leaders should strive to set their employee productivity goal at 75% to 80%. If productivity reaches above 80%, customer service issues could arise because Service Providers will be too busy to perform essential aspects of their job, such as upselling and engaging with clients.
To improve productivity, ensure your team is well versed in your products, services, and specialties. This knowledge, along with customer engagement practice, can help lead to a more productive team that can answer client questions and steer them in the direction of their next favorite product or service.