I recently underwent a review with all of the salon and clinic owners that I currently work with to ascertain how I could better supply services for them. Part of that review asked the question – What has been the most significant benefit to your business from the consultancy help you have received? I thought there would be a variety of different answers and was somewhat surprised when the vast majority of the responses were about the backroom systems that we initiated. Backroom systems are the organisational processes that happen again and again over regular time periods to record, analyse and plan for improvement in every facet of managing the business.
Perhaps I shouldn’t be surprised because much of the marketing help I provide is for a single campaign, staff training is often quite specific to address a particular problem or professional education issue. However, the work we do in formalising business systems is continuous and provides new – found control over the business for owners and managers.
So, I thought it might be useful to discuss some of these systems and the benefits using them can provide business owners.
- Test and Measure.
First and foremost, I have to explain the vital importance of testing and measuring everything you can about your business. I see so many owners who make decisions on what they think or feel is true but have no real idea if it is actually correct. I like to deal in facts when I make decisions. The only way I can know the facts is to measure the results of what I am doing. For example, if I asked most owners what their total income was last week or month, they could tell me. But when asked for a comparison against last year at the same time or as a percentage against costs or even the make-up of that income into the various services and retail items they provide many owners are not able to provide such information easily.
- What was your customer count last week?
- Was your average spend per customer up or down?
- What percentage of your clients had multiple treatments?
- What was the ratio of new to existing customers?
- How did your customers find out about you?
- What were your rebooking rates?
- Which staff members made you the most money?
- What specials from your latest marketing exercise did customers respond to and how does that compare to other campaigns you have undertaken?
Indeed, the list of things you can measure is almost endless. But if you did know the answers to just these basic questions your forward planning would be far more precise. Your decisions about advertising to attract clients as opposed to the far cheaper marketing of merely retaining customers would be based on hard evidence. Your staff training in retail selling would reflect the low numbers of retail dollars in your total income, rebooking numbers can be seen as a reflection of your customer service levels and you would know what advertising to repeat because you know whether it worked or not as a fact.
Consequently, one of the first things I do in clinics I work with is to put in place some measurement procedures to gain a true picture of the health of that clinic.
- Begin with Existing Clients.
When I instigate backroom procedures in clinics, I usually like to begin with systems for retaining existing customers. Experts believe it is between 5 – 8 times cheaper and easier to get an existing customer to return than it is to attract a new one. I believe we need to be providing our existing clients with legitimate reasons to return to our clinics. Most of them want to continue to see us but are torn between other obligations and the cost of our services. By building strong relationships that enable us to continually maintain communication with these clients through fliers, newsletters, phone calls and direct mail we are able to retain more clients and have them book for series of treatments. In other words, we give them legitimate reasons to choose our services first. Therefore, I find that implementing some of the following marketing materials and having a set time to distribute them becomes a systematic part of the operation of your business.
Just a few ideas to keep in touch:
- Regular newsletters either quarterly or bi-monthly.
- Happy birthday letters with a voucher for something special emailed the day of the client’s birthday.
- Thank you for choosing our clinic letters with an invitation to return attached
- Membership to a VIP club
- Thank you cards with a small gift for those who refer others to your business
- Monthly cross over offers for clients to try a service they may not have ever tried before
- Haven’t seen you letters with a special offer to return for clients you may not have seen for some time…..and the list can go on forever.
In many clinics we instigate Mad Mail-out Mondays where every Monday either monthly or weekly letters are emailed. It becomes an operational system that these retention tools are sent out.
- Staff Performance.
Another area where some set systems can really help is the monitoring of staff performances. Holding regular staff meetings, training sessions, formal opportunities to give staff feed-back and the setting of new goals is best done over a consistent time frame and following a systemised format.
How are your staff monitored for excellence?
- Do staff have set weekly or monthly targets in areas such as income per hour worked, retailing, services dollars, customer numbers or average dollar spend of their clients?
- Is there a set period where staff performance is formally assessed and they are provided with factual details of their performance goals?
- Are there clear position descriptions in place that outline exactly what is required of staff?
- What are the consequences of outstanding or poor performance?
- How are staff presented with their performance results?
- Are staff thanked, rewarded and challenged?
By having very regular review dates, one-on-one meetings, fair yet challenging goals and sales targets, staff are continually informed about their own performance and acutely aware of the expectations you as an employer have of them. One of the biggest problems I find when owners complain about poor staff performance is that the staff fail to have a clear understanding of what is expected of them. By having consistent formats for presenting staff performances not only are owners in a position to act on good or poor performance but staff know where they stand and exactly what is expected of them.
- Stock Control.
Stock control is another area where some simple systems can make a huge difference in stock ordering procedures and stock levels. In many of the clinics that I attend there is literally tens of thousands of dollars of stock tied up either for professional use or retail sales. In many cases only a fraction of this amount actually needs to be in the clinic. The opposite problem also exists where due to a lack of stock, retail sales opportunities are lost. By having a systemised stock ordering procedure based on minimum and maximum sales numbers, stock supplies can be maintained at correct levels. Similarly, by ordering more regularly, stock is turned over quicker and adjustments to orders can be rectified faster. Many of these problems arise when staff guess what stock is needed rather than follow a set procedure for deciding what stock is required.
Consider these questions:
- What is the maximum number of each item sold over the past five ordering periods?
- Do you have a list of overstocked items not to be ordered?
- How often is stock ordering done?
- Are there incentives such as free delivery if orders total over a certain dollar figure?
- Are all staff trained to order and process stock?
- Do you know exactly what your current stock holding is valued at?
- Are there seasonal items that need to be remembered?
- Marketing Systems.
Although there are numerous other business systems we could look at, the final area I would like to mention is that of advertising and marketing. As I have already stated, I believe that we need to continually place legitimate excuses for our clients to return in front of them regularly. In order to achieve this, we need to have a detailed marketing plan that utilises a number of different advertising channels. Everyone knows that having a great marketing plan is essential, but how do you know what is going to work? One way is to hire experienced experts in our industry to help you. Or you can rely on your own experience and good judgement. Whichever way you choose, repeating successes and rethinking less than successful campaigns makes plenty of sense. How we systemise our marketing is by monitoring the success of our marketing ideas and recording diary – like each campaign.
Here are just a few of things I like to record:
- What date the campaign started and how long it lasted.
- What the offers were.
- Price point
- Who was the target market.
- Cost of the campaign
- Return on investment in $ and customer numbers
- How, how many and where was it distributed.
- Rebooking numbers
- Suggested changes
By keeping a journal style record of each campaign, decisions in the following year can be made on accurate facts. Let’s face it, getting the start of your Christmas or Mother’s Day advertising wrong by just one week can cost your business thousands of dollars in additional sales.
The implications of having systemised procedures are enormous. Accuracy of decision making improves, productivity increases, more important tasks get completed on time and vital information gets recorded in a user – friendly manner so that there is factual material to base future decisions on. The result will be a more profitable and efficient business for you. But more importantly your customers will benefit with better customer service, more appealing offers and regular attendance.
If you would like to know more about how to implement profit building systems into your business, Paul Carbis can be contacted by email on email@example.com or you can book to see him when he next visits your area.