By the Numbers: Data Analysis for Salons & Spas

October 10, 2014 Lisa Starr

Spa data analysis and salon data analysis

Most of us who work in the beauty industry didn’t start our careers because we have a love of numbers. Instead, we were drawn by fashion, beauty, health, creativity, and our love of people. But as with any business, understanding and using numbers to interpret financial results is a key component of the success and growth of our salons and spas.

When working with spa and salon owners to improve their business results, my clients often have a desire to “do better,” and yet they’re not sure how to make that happen. As discussed in last week’s blog, there was a time when many different systems were in use to operate a salon or spa. The appointment book, the transactional database, the gift card system, and product inventory were often not just different modules of one system but completely different systems, whether manual or digital. Executing payroll and creating income statements further complicated things. It’s no wonder that salon and spa owners and managers felt overwhelmed by the task of pulling all of this information together to gain insight into their business and make needed improvements.

Luckily, modern business management systems integrate much of this information into one easy-to-manage database so that you can easily access your most important data at all times. With a comprehensive software suite that tracks data on bookings, sales, inventory, employee schedules, marketing efforts, and customer preferences, it should be easy to run reports on key metrics such as service and retail revenue.

Keeping track of your service and retail sales volume is of high importance, but beyond broad sales numbers, departmental breakdowns are also crucial. Knowing that you’re bringing in revenue is important; knowing HOW you’re bringing it in is even better. If you can compile a few facts such as the number of treatment rooms or stations per service department, you can use your departmental sales revenue statistics to determine which of your service areas is creating more revenue per room or station.

For instance, you may discover that your massage treatment rooms have higher treatment dollar volumes per room than skincare does, and this may affect how your deploy those rooms in the future. You might adjust the schedule so that there are more massage appointments available during the week, but more esthetic appointments on weekends. In addition to analyzing performance based on service sales, you’ll need to see how retail sales affect the equation. Whenever you’re determining the revenue impact of a particular department, retail sales should be a part of the equation; in this example, skincare’s contribution to retail will likely tip the scales in their favor.

Since salons and spas sell appointment time slots, keeping a close eye on your utilization rates is also a worthwhile activity. While this number alone doesn’t answer any questions, it can be used to benchmark your performance and inform adjustments to your schedule. Developing a feel for what your sales utilization is on a daily basis will help you to then devise ways to grow it. Could it be higher if you had better staff coverage? Do you need a new marketing angle to create more demand?

Other valuable metrics to track include:

  • Payroll costs as a percentage of revenue
  • Retail inventory turn rates
  • Number of percent of new versus returning clients
  • Client retention rates for each technician
  • Average ticket price
  • Gift card sales and redemption rates
  • And many more!

Again, having a robust software system that tracks and reports on all of this data for is essential to being able to look at your metrics

If you’re not a numbers person, don’t let that stop you! Get curious and start looking at the reports available to you. Look at what types of data you have available to you and figure out how you can use that information to improve your offerings and processes. You’ll reap the results of your data analysis!

About the Author

Lisa Starr

Lisa Starr brings over 30 years of industry-specific experience as a consultant, educator and writer to Booker through GOtalk. Lisa also works for Wynne Business, a leading spa consulting and education company. Among other things, Lisa’s expertise lies in business operations and finances, sales and marketing, inventory management, human resource development, and business process improvement. She is a well-known speaker within the trade show circuit and is a frequent contributor to industry

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