Setting and Smashing Salon Targets

Before you even start thinking about setting targets for your team, it's really important that you know your numbers. How much are your overheads? How much are your products? Is your pricing structure right? Numbers are a HUGE part of any business, if you get these right - you can really start to work on your salon business and really grow it.

Okay so you know your numbers, now let's look at what exactly you want to be targeting. I'd like to add at this point that targeting and numbers in general will be SO much easier to look at if you have a booking system. If you're still using a paper diary, this is gonna add loads of time to your admin! I'm a massive advocate of using systems and looking at reports to really understand where your business is at, whatever you spend on it will come back to you in spades in terms of less admin time, reduction in no-shows, having reports at your fingertips!

REVENUE TARGETS

A really common target in our industry is for revenue to be at least 3 x wage, then commission on anything above that.

This might be a flat rate, eg:

Monthly wage = £1,300
20% on anything over 3 x wage
3 x wage = £3,900

If their revenue is £4,000 (£100 over target)
20% of £100 is £20

If their revenue is £4,500 (£600 over target)
20% of £600 is £120

If their revenue is £5,000 (£1,100 over target)
20% of £1,100 is £220

If their revenue is £6,000 (£2,100 over target)
20% of £2,100 is £420

If their revenue is £7,000 (£3,100 over target)
20% of £3,100 is £600

Or, you may want to introduce a tiered commission system, to really push them to hit the next threshold, eg:

(Monthly wage = £1300)
20% on anything 3-4 x wage (£3,900 - £5,200)
30% of anything 4-5 x wage (£5,200 - £6,500)
40% of anything 5-6 x wage and over (£6,500 - £7,800)


If their revenue is £4,000
20% of £100 is £20

If their revenue is £4,500
20% of £600 is £120

If their revenue is £5,000
20% of £1,100 is £220

If their revenue is £6,000
20% of £1,300 is £260
30% of £800 is £240
Total is £500

If their revenue is £7,000
20% of £1,300 is £260
30% of £1,300 is £390
40% of £500 is £200
Total is £850

As you can see, the scope for team members to earn higher commission is there with the tiered system, however it is more complicated to work out.

UTILISATION TARGETS

Utilisation is the time that your team are actually with a client. Now how you want to target this will depend on the type of work they do and the time they need to carry out their treatments. For example, a nail technician or beauty therapist should be able to work pretty much back-to-back so I'd expect to see a higher utilisation from them. A hairstylist specialising in big colour corrections may need to spend a lot of time with each client and not be able to fit cuts etc in development times, so their utilisation would usually be lower (just make sure you are pricing these services properly to reflect this!).


RE-BOOKING TARGETS

Re-booking is a HUGE part of your business and one of the quickest ways to either grow it or lose it. Every single client should be asked to re-book their next appointment and your team should be trained on objection handling. Re-booking is good for the salon as it means that you can manage cash flow and know what you have booked in ahead of time, but it's also a good service point for the client and they don't run the risk of not being able to get back in.

RETAIL TARGETS

You may want to target how many retail products your team sells, or give them a commission for retail (usually around 10% or £1-2 per item). You could even target them on the % of their overall revenue that is made up of retail.

Retail targets could also be set using competitions when you need to clear out some older stock to make way for new. Just make sure your team aren't selling for the sake of it and the clients are getting what they actually need! Product knowledge is essential for retailing products and a lot of suppliers will offer you this for free, so make sure you utilise it!

AVERAGE SPEND TARGETS

This is a great introduction to targets as it's such a straightforward number to look at, and a little less scary for team members than seeing a massive number for their revenue target! Increasing the average spend by just a few pounds, will bring thousands into your business overall. Get your team to think of ways they can increase this... it might be products, bundling services together, up-selling to 'luxury' versions of services... there are loads of ways this can be done and it's a fantastic place to start if you're new to target setting!


I'd also recommend that targets should be worked out monthly rather than weekly, as this will give your team time to really ramp up their sales throughout the month, rather than giving up if they have a couple of quieter days.

One thing to point out though, is that you MUST give your team the ability to be able to hit their targets. There's no point in asking them to bring you all this revenue if you don't put in the work with marketing, bookings, having products for them to retail and services to up-sell.

I'm a massive believer in communication, don't just hand your team a number and tell them to hit it - ask them if they feel it's achievable, break it down into weekly and daily targets, use competitions and games to make it fun!

But most of all, reward them and thank them for their hard work!


Have you had any good or bad experiences with targeting that you'd like to share? I'd love to hear from you!

Maddi x