8 Best Sales Key Performance Indicators (KPIs) for Your Spa Business
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Reuben Yonatan breaks down the best sales KPIs to be tracking as a spa business. Sales KPIs are an absolute essential part of your business strategy. They paint a clear picture of how good or bad your business is doing. Without them, there’s no way of telling whether or not you need to keep doing what you’re doing or if you have to make significant changes to your business strategy.
Spas can and should take full advantage of sales KPIs such as Monthly Sales Target, Stock Turnover Rate, Average Customer Spending, and Cross-selling Rate to determine whether or not they will reach their sales goals. It’s important to do so because spas that go out of their way to offer their customers the best quality experience and products possible without knowing whether or not they’re pulling in enough revenue to meet their customers’ needs can put themselves at serious risk of shutting down.
Here, we’re going to break down what some of the best sales KPIs are for your spa business, and why you should start monitoring them as soon as possible.
Monthly Sales Target
Monthly Sales Target, as the name suggests, measures whether or not your spa business is reaching its monthly sales revenue goal. It’s up to you to determine what that number is, but what’s important about this number is that you’re consistently reaching the number, or, if not, resolving issues quickly that are keeping you from reaching your sales target. This is a good, long-term sales KPI to monitor when looking at the big picture.
Stock Turnover Rate
Stock Turnover Rate monitors how often a business goes through all its stock within a certain time period. Here, the time period is up to you. You can even choose to monitor Stock Turnover Rate over a long and short period of time simultaneously to determine whether or not the stock you have out is actually being purchased, while looking to see what sells and what doesn’t. If your spa offers the best manicures in town, but you’re filling your shelves with all kinds of products that customers aren’t interested in, it’s probably time to switch out the products or ditch them all together.
Average Customer Spending
Average Customer Spending looks at how much each customer spends when they go to your spa. If the number is high, it clearly shows that what you’re doing is right. If the number is low, some things to look at to improve the average is refining your spa menu, lowering prices, , offering higher quality products and services, or offering coupons and promo codes. Perhaps customers need to spend more time in the spa or hear a pitch from your employers about what products they use. Personalised experiences are often a great way to improve the overall customer experience, which is what inspires customers to return.
Cross-selling Rate is all about what else customers are buying along with their original purchase. This is important because no matter what business you’re running, you want customers to purchase as many products or services as possible during each interaction. If your spa offers massages, be sure to have massage oils on sale as well. They can be used as gifts or for those who don’t live in the immediate area and can’t come in or for those who simply want a massage from the comfort of their own home.
Social Media Usage
It’s up to your spa business to ultimately determine how Social Media Usage is measured, but there’s no getting around the fact that social media has to play a significant role in your sales strategy. One great example of using social media could be sharing videos online about how to make homemade facial scrubs. Encourage employees to interact on social media on a regular basis to resolve problems, connect with customers on a personal level, sell products, and help establish a positive reputation. For example, utilise Facebook to its full potential with these 3 easy ways.
Follow-up Rate is crucial for spas because having a solid foundation returning customers will help establish a positive reputation on social media (we all know how opinionated customers can be when it comes to reviewing businesses) and encourage new leads to come into the spa. Spas often carry high-end products which unfortunately come with high prices; however, if the quality of service and quality of products are good enough, people are typically more willing to spend extra money. Following up with previous customers shows you care while reminding them of their previous experiences.
Churn Rate is the number of customers that discontinue their use of a service in any given period of time. This is important, and is closely correlated with Follow-up Rate, because businesses — especially spas — aim to have as large a foundation of repeat customers as possible. If a noticeably high number of people aren’t returning to your spa, that indicates either the customer experience is negative (wait times, scheduling issues, etc.), the quality of products and services aren’t high enough, or the cost of those products and services are too high.
Net Promoter Score
Net Promoter Score measures not only how positive or negative a customer experience was, but also how likely a customer would recommend a business to someone else. This is an imperative for your spa business because spas offer extremely personal services. Net Promoter Score can simply be measured in a survey by asking customers to rank the experience on a scale from one to ten, then asking if they’d recommend the business to a friend. If you ask them to explain why, that offers invaluable insight into what’s working, what’s not, and what needs to change. From there, sales agents can adjust and optimise their strategies to offer more personalised client experiences.
The Final Word
Spas offer intimate services that require employers to offer positive customer experiences every single time someone walks into the spa. People go to spas to relax, so they can’t be burdened by bad business strategies like having popular products out of stock, dealing with faulty scheduling systems, and simply receiving poor services.
These eight sales key performance indicators are useful metrics for spas to determine whether or not their sales strategies are good or need work. They also can give you proper data to know when it is time to expand, or stay still. Without them, there’s no real way of telling what needs to change in order to increase revenue and positive customer experiences while keeping churn rates low.