Setting salon team targets

Sit down and see what's going on with the Queen of Salons. Hair, beauty, and more successful tips for business owners. All on Build Your Salon. Hello, hello, hello my salon lovelies. Phil Jackson, Queen of Salons here, coming in your ears with another load of business knowledge sprinkled liberally with a dash of camp nonsense, of course. How on earth are you? Looking good, my dear. As we march into February, how was January for you? Lots of people reporting some good strong results in January, which is rather nice. Having had a shaky finish to 2022, it seems that 2023 has been a lot kinder to some than perhaps we were expecting. What did you learn? What's your big lessons? What are your big takeaways from January? And what are you going to leave behind? This is kind of my theme for the year. I think as we make room for success in our lives, we have to leave some stuff behind. We need to leave behind attitudes, values, beliefs that don't serve us anymore. Sometimes we need to leave people behind and relationships that aren't supporting us and nurturing us and helping us become the best versions of ourselves. Sometimes there's old habits that we need to get rid of. So what are you leaving behind? And I've got my list of three things that I'm glad to see the back of, at least for a short time anyway. The first one is travel and I love traveling. It really does broaden the mind and put things in a very strong sense of perspective for me. But my goodness, January has been busy. Oh, I've been on and off planes all the way through and I've just completed a quick trip over to see one of my very best business buddies and coaching clients over in Belfast. And that's me done now for the rest of this month. I'm not going anywhere for February. And I don't know if it's me getting old, but I'm quite looking forward to a few weeks at home now, not having to pack and unpack and live out of a suitcase. Next up, I'm leaving behind Harry and Meghan. Oh, my God, I was sick to death of hearing about that treacherous little imp and his wife. I'm afraid I'm a big fan of the royal family, which is not terribly fashionable these days. Of course, we wouldn't choose it this time around. I always think the royal family is a bit like a Volkswagen camper. If you were designing a camper van from the ground up, it probably wouldn't look like a Volkswagen camper anymore. There's better ways of doing things. And I'm sure there's better ways of building a society than a constitutional monarchy. But this is what we've got. And it does make us kind of cool, I think, having a monarchy in place. But it's always been my opinion that you need to be a beacon if you're going to live that life, which is very different to everybody else's and that life of privilege.

Then you better set yourself up as a shining example. And I'm afraid that I'd have him tried for treason and sent to the tower. And what else am I leaving behind on a more serious note? I'm leaving behind no-shows. Gosh, here's me starting to take a pinch of my own advice. I've been telling you all for years that you must be charging booking fees and deposits at a level that makes people think twice. You know, obviously, we don't want to persuade people into the salon if they're poorly and, you know, genuinely ill and going to spread their germs amongst your team. But if it's because they've woken up with a bit of a hangover, then we want our deposit to just make them think twice about no-showing on that appointment. In January, I always get baffled, baffled, my dears, how I can end up with no-shows. Not because I'm a particular princess, but because I'm dealing with salon owners. And my God, if anybody understands the impact of a no-show, it should be you lot. So why on earth people would not show up for appointments with me? I've got no idea. Anyway, I've got to the stage now where I can't be doing with it anymore. I'm washing my hands of all that nonsense, asking people to confirm their appointments. And if they don't confirm, then I'm just cancelling it. I don't care who you are, my dear. I'm not hanging around twiddling my tits waiting for you to turn up. Anyway, let's move on. What are we talking about today, Phil? What's the subject? How are you going to help us move our businesses forward? Well, I'm going to be talking to you today about team targets. Targets, so targets that you're going to set your team. And very often I'll go into a salon and ask them what targets they've got. And they've got one, which is the team member's commission target. And that's not what we're talking about at all. I want you almost to put that commission target to one side and forget about it. It's not your job to coach your team member to achieve commission. The commission's supposed to be doing that motivation task for you. And if it's not working, well, I would suggest that commission's not working in your salon either. And I think it's a perfectly valid business model these days to scrap commission altogether and pay people a fixed wage and no more. You know, maybe with the occasional bonus or something at Christmas. But I think that would be a perfectly valid business model, even though it's not something I see terribly often, certainly not here in the UK. So what am I talking about? I'm talking about performance management. I'm talking about the targets that we need your team to achieve. And why do we need these targets? Why are they important? Why do they need to be in place? Well, of course, they're there to increase the productivity in your salon business. And of course, if we're increasing productivity, then we should be increasing profitability.

It's about maximising a team member's time and getting the very most bang for your buck. And it really does help your team stay motivated and focused. It helps them achieve those specific goals. And it means, of course, that we're measuring and tracking progress. So that means that it's easier for us to identify team members that are struggling and areas for improvement in their performance too. But most of all, I think we're creating that sense of accountability, that sense of ownership in team members. And I think that's what people want. I think they want to feel that they're steering their own destiny a little bit, that you trust them enough to perform at a high level. You're there to support them, but ultimately that it's down to them. That can be a bit scary. If you've got team members that are used to being babysat, if they're used to you nurturing them to the extent that they don't really have to make any decisions of their own at all, and all of a sudden we're asking them to perform at a high level, that can feel a bit like they've had the rug pulled out from under their feet. So if you haven't got these targets in place already, please be prepared for there to be a period of transition and a period where they're going to need a bit more support than ideally we would give in the longer term, just to get them over that first hurdle. But we're providing those very clear expectations. And I love that sense of communication between team members and the management team. And I love that idea of collaboration, the idea that we're all working towards a common goal. So it's important that we communicate these targets in the right way. But my goodness, this is where our salon software loves to kick in and complicate things. And you know I've got a love-hate relationship with salon software. I've had different softwares in my own business over the years and loved and loathed many of them in turn. And we've been through quite a few over the 20-odd years that we've been open. And we were one of the first independent salons to actually bring software in. It wasn't terribly common. It was if you were a franchise salon, but if you were an independent salon, not many had software in the very early days of my business. And I understand why. It's, you know, all sorts of reasons. Firstly, to keep the costs down. Secondly, so that you can commit tax fraud at a slightly larger level, I suspect, in many businesses. And thirdly, we didn't really see the need. And things like online bookings were a dim and distant fantasy way back in the 1800s when we were setting my salon up. So we got this software in. But, of course, in the early days when mostly franchises had software, it meant that it wasn't really built for independence. And the reports and the statistics that used to pour out of this poor machine, as a matter of course, were absolutely overwhelming.

And there's a bit of that legacy around, even now, lots of salon software systems producing reports that nobody ever looks at. And far too many reports. And it can become very overwhelming for the salon owner to know exactly what it is that we're supposed to be measuring at all. So I'm going to take you through four targets that you're going to set for each member of your team. Now, of course, these targets are a minimum. You can do more than four targets if you need to. But don't go too far in the other direction. It's going to make your performance management meetings very overwhelming and a bit unwieldy. And they're going to go on and on and on. And to put this into a sense of perspective, when I was managing the salon at our busiest, we had 21 team members that I was carrying out one-to-one meetings for. I don't have 21 hours in a week just to deal with performance management. So my performance management meetings were always booked out for 15 minutes and usually finished in less than 10. So these are short, fact-based meetings. And that means that we need to be really, really ruthless around the targets that we're setting and monitoring and reporting back on. So just four measures. Now, as I've said, we can add more measures. Normally, I would only add in more if, for example, you had specific training targets. Let's say you've got an apprentice on the team. Then you might have some specific training targets for them to be achieving and striving for and that would have your support as well. But generally, these are the four measures for every team member. And remember, this is separate from our commission target. That's their business. That's for them to worry about whether they're hitting that or not. These targets are what you need them to achieve in order to achieve your salon goals. So what are these four measures? Are you feeling like you're stuck in a rut? Like you're just going through the motions or that whatever you do, the next level in your business stays just out of reach? Well, it's time to shake things up. With one-to-one coaching, you'll have buckets of support, inspiration and accountability to help you bring the buzz back to your salon business. Whether you're looking to achieve a specific goal or just feeling that things are lonely at the top and you want someone to coach you to be the best version of yourself, I am here to support you. And don't worry, even though it's called coaching, I won't make you join a gym and I will never suggest you give up your Toblerone habit.

What's the alternative? More of the same? Come on, you can do better than that. Ping me an email at phil at buildyoursalon.com with the subject line coaching and I will send you all the details. I can't wait to help you on your journey to salon success. So for us to get a short, sharp hit, a very brief performance management meeting, we have just four measures that we're going to be monitoring. And the first one is utilisation. And I put this one at the top because in my salon, this was the most important performance measure. This was the one that would actually get you fired if you weren't achieving the levels, the minimum acceptable standard over a period of time. So what is utilisation? Utilisation is a measure of productivity. So out of the number of hours that you had available for bookings this week, how many were actually taken up with paying customers? So we take out all of the team meetings, we take out all of the lunch breaks, we take out all of the on-the-job training that we're doing. And whatever's left, we're going to measure as a percentage how much was taken up with paying customers. And utilisation, I think, gives a really rounded picture of how a team member is doing. And unfortunately, lots of people ignore utilisation, which I think is a big mistake, because it also takes into account your marketing measures. So let's say that we did a big push this week and we decided we were going to really target lost customers and we were going to give them a big juicy discount to come back into the salon. And I've talked about discounts before. Actually, lost client marketing is the one time I discount very hard and have no shame about it at all. I'm a big fan of discounting for lost customers. Anyway, let's say that we give them a big fat discount and bring them back into the salon for a $10 haircut. And that could be a huge discount from where you are normally. Well, if we're only looking at takings, then on paper, it looks like a team member hasn't achieved an awful lot this week, when actually they could have just been booked up with these $10 haircuts, which I think then gives us a fairer idea of how that team member is actually performing. I think it takes into account that marketing activity as well. So very roughly for utilisation, and this is very roughly and not any kind of financial advice, of course. But then if you're taking financial advice from a podcast, then frankly, my dear, we need to have a much stronger talk.

But very roughly, if you've got utilisation, which is lying below about 70%, you're probably going to be struggling to break even. You'll be certainly struggling to make a decent profit, I would suggest. Ideally, we need to be looking at utilisation, I think, between 80% and 95%, somewhere in there. And it depends a lot on your business model, depends on the type of client that you've got, and also your average bill. Above 95%, of course, we're salon owners, and we want everyone to be 100% utilised 100% of the time. But what you've got there is a situation where there's no give, there's no elasticity left in the business. And if you've got people working at 100%, firstly, your team's going to be knackered. But secondly, the wheels are going to fall off very quickly. So if you've got somebody who consistently turns up late for appointments, or somebody unexpectedly takes some sick leave, or you've got somebody who's going on maternity leave and they have to go a week early, if you're working at 100% utilisation all the time, there is no leeway, and the wheels will fall off the business very, very quickly. You've got a very stressed business model. So 80% to 95% can work really nicely for utilisation. Also, I think utilisation targets make you much better at planning absence. Because if we want people to consistently hit 80% to 95% utilisation, and we know that, let's say, February is a very quiet month historically in the salon, then it encourages you, as a team leader, as a manager, it encourages you to push your team to perhaps take more leave in the quieter times. Because it's going to be harder to achieve that if we've got a full team at full capacity. So moving on from utilisation, where do we go next? Well, the obvious place where everybody starts is the service total. So we're looking at basically the dollar or pound total that's going in the till on service. And whenever we're giving anybody a target, we've also got to give them the tools to achieve more. So there's no point in setting a service total target unless you're also coaching your team on how to get a better result. How do we get a better result in service? Well, it's those obvious things like upgrading people's services, add-ons, extra services on the same visit, just to make sure that we're maximising every bill that goes through the till. Next up, the salon owner's best friend and worst enemy. We're looking at the retail total. And retail causes a few problems as far as measurement's concerned. I mean, it causes an awful lot of problems, let's face it, darlings, with actually shifting retail at all.

And I know there are an awful lot of salons who really, really do struggle to sell any level of retail at all. And I don't think that is necessarily a huge issue for our industry. I think it's time that a few salons embraced that fact and started to stand out as salons that don't retail at all. I don't think just because everybody else is retailing, I don't think that's enough of a reason for you to be carrying thousands of pounds of retail on your shelves in your salon. Anyway, assuming you've decided that you're going to be retailing, and we can unpack that, my dear, in a different podcast if it interests you. But assuming you do, how are we going to measure it? Well, you could measure it just in the pounds or dollars that go in the till on retail, which is fine and nice and easy to measure. It should be a report that you can grab from your salon software very easily. But if you sit two team members side by side, and they've both managed to achieve £1,000 in retail this month, it looks on paper like they've done the same job. But you could have, let's say in a hair salon, you could have one team member who sold, let's say, 10 pairs of hair straighteners at £100 each, and the other that sold 100 shampoos at £10 each. And on paper, they've both done £1,000. Who's done the better job? Well, I would suggest that the person who sold to more people, has actually done more selling, has done a better job. They've made sure that more people are leaving with the right products in their hands. So I don't necessarily think that a pound or dollar total is the best way to measure retail. So what's the alternative? Come on, Phil, give us a different suggestion then, why don't you? Well, you could measure the number of units that a person sold, so the number of products that a person has managed to sell. Now, that could work a lot better in a lot of salons, but there are some problems with that as well. Because if we sat those two stylists side by side, and they've both sold 15 items today, well, on paper, it looks like they've done the same job. But again, one of them could have sold 15 pairs of hair straighteners. The other one could have sold 15 travel sizes for £7 each. So who's done the better job? Well, I would suggest that the person who's actually managed to shift some high ticket items has probably done a better job of selling. And I see this as a big problem, particularly in the beauty salons, where you're selling high-end skincare, for example.

The price difference between, say, a travel size of a cleanser compared to a full-price serum is huge. So if you've got a very broad range, if you've got a very wide range of prices being charged for different products, then it may be that measuring in the number of units is not the way to go. But actually, it remains my favourite. I think that we should be reducing the barriers to communication wherever we can. And I think if I go into a team member's one-to-one meeting and I say, I want you to sell £1,200 worth of retail this week, they've got some calculation and some head-scratching to do. But if I go in and say, I want you to sell 35 products this week, straight away, I think that team member understands what's expected of them. So number of units remains my favourite measure. But there is a third way, a third option, which is called, in some salon software, I know that Forrest, for example, call it care factor. And care factor is a measure of the number of people who left with at least one product. So what they're measuring as a percentage or a score out of 10 is the number of people that are left with at least one product. So the idea being that the more people that leave with products, the better the job the stylist or the beauty therapist or the esthetician is doing. And again, I don't think it's a perfect measure because you could have two people with the same care factor. One of them sold one item to each lady who left and the other one sold three items to each lady who left. So that doesn't look terribly fair on paper either. So I'm not a big fan of care factor. I don't think it really helps us an awful lot. But what I would suggest you do with all of these measures, in fact, across the board, is choose the measure that makes sense for you in your business, but also the one that you can get the figures easiest for. And that brings me on to the final measure. So the fourth of the four, which is either rebooking or retention. And I give you an option because most salon software systems don't give both of these figures terribly easily. Usually they have one or the other that you can get very readily. And also, if you do have a choice, I would go for rebooking. And there's a very clear reason for that too, which I'll come to. I don't particularly like retention reports. I'm a nerd. I'm a geek. I love an app. I love a bit of technology, as you know. And I find retention reports almost impenetrable, completely impossible to set up and very hard to understand. And I think if I'm struggling, then my team members are probably going to be struggling too. So I prefer rebooking. But if you get the choice, I would plump for rebooking anyway. And that's because we can see an impact much more quickly. So if I set you a retention target, it can take weeks or months for us to understand

whether my coaching is actually helping you with your retention figures. But with rebooking, I can probably see tomorrow whether you're making more of an effort with rebooking. So we can see an impact much more quickly. Therefore, my choice out of the two is always rebooking. But if retention reports are easy for you and rebooking reports are a bit trickier, then of course, plump for retention instead. So we've got our four measures per team member. So the four measures that we're going to be reporting back to them every single time in their one-to-ones. How often do we do it? Well, it depends on their level of performance. My Salon Owners Retreat is a unique event where you get to create the agenda. This isn't a retreat of boring presentations in conference rooms without windows. The entire program is a mix of group coaching, mastermind sessions, and one-to-one coaching with me, your favorite salon coach. There's also time built in for implementation. Yes, you're going to leave the retreat having actually got some important work done on your business with our support. Our spring 2023 retreat is now sold out, but you can be the first to hear about the next Salon Owners Retreat and get the very best early bird pricing by heading to buildyoursalon.com and joining our wait list. I can't wait to see you on Salon Owners Retreat. Don't forget your speedos. So how often am I meeting with each team member? Well, it depends on their level of performance. If they are performing well, hitting all the targets, and you insist on a weekly performance management meeting with them one-to-one, you're micromanaging. It's actually going to become demotivating, and the team member is going to start to feel that actually you're getting in the way of them performing at a very high level. So normally, if they're ticking all the boxes, it will be a monthly meeting with me. And I tend to try and get that meeting as quickly as I can after payday, because I think that's when people are thinking about performance and targets. If you've got people that are failing to achieve the standard in more than one area, or one area or more, then we increase the frequency. So we could go to fortnightly, or ideally weekly meetings. I have gone even more frequent than that, and I have had daily meetings with one or two team members over the years. I can't pretend it worked, and it was an awful lot of commitment and time for me. And literally, we were breaking down that person's column and saying, OK, we've got these clients in today. Who do you think would be a good candidate to be upsold to?

Who do you think we're going to be selling products to? And literally spoon-feeding them day by day. It didn't work in the longer term, But I do like to feel, as a manager, I think it's a useful attitude to have that you've done everything you possibly can to help someone achieve. And that was what I felt was necessary at the time. So monthly meetings, if they're ticking all the boxes. Weekly meetings, if they're not. Now, I'd like to leave you with my final thoughts, as far as performance management and targets for your team are concerned. Four little golden rules that have served me well in my salon and in the salons of the people that I'm coaching. The first is, they don't need the backstory. They just need the target. So they don't need to know that you need them to achieve a certain level of performance because January was a bit quiet and February looks a bit patchy as well. And we need to save up some money because we're getting the flooring replaced in May. They don't need all that. All they need is the target. She brings me on to my second point. We need absolute clarity. Really clear from you means the target is really clear to them. And nobody is going to strive for a target that they don't understand. What you've got to bear in mind is we have now a generation, in fact, heading into our second generation of team members, particularly younger team members, who have been through a school system which is very heavily target-led. At every stage of their school career, they have understood exactly what's expected of them. They've been coached towards different milestones and exams at every single stage of their education. And then what happens? They leave school and they're just expected to understand and get on with it. And it's not fair. And this is why performance management is so important, particularly with our younger team members. So let's make sure that those targets are really, really clear and that we're coaching them towards amazing results. At every stage of the game, my third point is that your target needs to be challenging but achievable. So we need to take into account peaks and troughs in your patterns in your business. Every business has seasons. Unfortunately, they don't line up with the calendar seasons, darlings. Otherwise, that would be far too easy, wouldn't it? So what do I mean by that? I mean that it's very hard to sow seed in the winter. And your business has a winter. It has times when it's just tougher to get people in and to keep making money.

And we can push against those seasons. We can try and mark it through them. Or we can accept that what's challenging but achievable in February is not the same as what's challenging but achievable the week before Christmas, for example. So we need to take into account those peaks and troughs. Take into account those seasons. It's hard to sow seed in winter. It's counterproductive, in fact, to be reaping your harvest in the spring. So bear in mind what's challenging but achievable right now. Also bear in mind, while we're talking about challenging but achievable, Oh, I managed to pull up one of my one-to-one clients on this a couple of weeks ago. And she's a very accomplished, very successful business owner. But do bear in mind when you're looking at price reviews, price increases, that you're changing what's challenging but achievable. Let me explain. Let's have some clarity, Phil. For goodness sake, explain yourself properly. Well, let's say that you've set a target for, I don't know, $5,000 for a team member to achieve this week. OK, and that equates to a certain number of facial services, for example. Then you have a price review of 5%. Well, actually, what you've done, assuming that they don't lose any clients because of the price increase, what you've done is made it 5% easier for someone to achieve a target. So when we talk about what's challenging but achievable, really what we need to see in our businesses is a model where the prices and the wages and the targets all move up relatively quickly. They all move up pretty much in a synchronised way. So bear in mind when you're changing your prices, you're also changing what's challenging but achievable as far as performance management targets are concerned. But my final point and the most important and the one that I see people getting absolutely wrong time and time again. I mean, my dears, I've seen so many people really balls this one up. Your targets have to add up. What do I mean by that? Well, I'll very often go into a salon that, actually, usually, let's be really blunt, usually I'll go into a salon that has no targets. They certainly, they might well have a commission target, but they don't have performance management targets for their team members. And they probably haven't got an overall salon target either. But if they have, it's not uncommon for me to realise that if you add up everybody's individual target, there is a shortfall between what that amounts to and what the salon needs to achieve overall. So what we don't do is add up everyone's commission target and then decide that that's what our salon needs to achieve. No, what you do through your goal setting is decide what the business needs to achieve. Then we break it down into individual targets from there. So those individual targets must add up to what you want your salon to achieve overall.

Oh, that was a bit of a lecture in the end, wasn't it, darling? Sorry about that. But I get very passionate about targets for your team. I think that as an employer these days, you're doing a remarkable thing. The easy thing would be for everyone to say, do you know what, I'm not going to employ anyone anymore. We'll just rent the space out or I'll just go solo and perhaps even go mobile or work from my house. I'm not judging people for that at all. You do you, darlings. You do your version of what a successful business looks like. But if we're going to employ people, my goodness, let's make sure it's rewarding for us as the business owner. So I hope that has been useful to you, or at least interesting. And if it has, please don't forget to leave me a little review. You know that reviews make me smile. In fact, if you leave me a five-star review, that will probably be the peak of my month for February. And if there's a topic that you'd like me to explore, then reach out. Send me an email. I love hearing from you all. Phil at buildyoursalon.com is the magic email address. And perhaps even make a suggestion from a topic that you might like to hear my musings on in the future. Just seven short days until I'm coming in your ears again, my dears. Until then, please take care. Sit down and see what's going on with the queen of salons. Hair, beauty and more successful tips for business owners. All on build your salon.