Top 10 Metrics for Chains
Posted on 17th November 2014 by Debbie Miller
Are you guilty of spending too much time working IN rather than ON your businesses? It’s so easy to get caught up in the chaos of day-to-day life and the immediate tasks at hand that many of us tend to lose sight of the bigger picture.
Strategic planning comes down to not only having the technology in place to collect the data you need, but also having the ability to make sense of the numbers.
So what are the top 10 metrics you should be measuring, and what are your numbers telling you?
Most people would argue that revenue is number 1, but I would argue that just as important is the number of clients that visited you. Without a client count, you can’t find your average ticket or make sense of your sales figures.
Next, we need to drill down into statistics about who is coming into the business. What percentage of guests is new, existing, or referred - who are these people and how did they find me?
How many of your existing clients are you retaining? If your client retention figures are slipping, there are serious issues at play that need to be addressed.
It costs on average five times more to gain a new client than keep an existing one, so tracking customer satisfaction is essential.
Using a simple scoring system like the Net Promoter Score gives you a bird’s-eye view of how your client feels about your business, while also highlighting strengths in key ‘trigger areas’ such as cleanliness and value for money. Use this to help make sense of your retention figures – if you are losing clients you will know why.
Measuring retail sales also impacts whether your clients return. We know as an industry that clients have a 50% or more return rate if their beauty professional teaches them what products to use and how to use it.
Client frequency also plays a huge part in measuring how well your staff is driving rebooking, if you are appointment based, or consultative recommendations, for walk-ins. If you can get the clients you already have to visit you 2 more times throughout the year, you will increase your revenue by at least 20%.
Increasing your average ticket is all about getting your clients experiencing more services and buying more retail. One of the quickest ways to move the needle here is to establish a culture of upselling across your organization and make your team accountable for their results.
And finally, the best way to protect your future revenue is to make sure your clients show up. No-shows can be costly to your bottom line and deflating to your staff’s ego. Using an automated 2-way confirmation system that is integrated can reduce your no shows by as much as 60%.
So measure away, but don’t forget the numbers will tell a story.