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BlogHow does your business compare to others? Top 5 tips from the 2023 beauty and wellness benchmarking webinarHave you looked at your store pricing, revenue, or retail offerings and wondered: Is it too much? Too little? Should I charge less – or could I charge more?
It’s impossible to track every competitor in your category and study their service menu. Nor would that exercise give you the most accurate picture of where your business stands. That’s why we created the 2023 industry benchmark report for salons, spas, medspas, and barbershops – and held a webinar to share the report’s findings.
In Rating your business performance: Inside the 2023 Beauty and wellness benchmark report, Donna Simonds, CEO of 16-location medspa group LaserMD Medspa, and Michael Meulemans, Zenoti VP of Customer Success, discuss the data that defines beauty and wellness businesses across North America.
They explore which metrics you must track to answer questions like:
In this post, we cover five key takeaways from the webinar, tips and insights to help you consider what may drive better results. Learn how your business compares across metrics that move the needle on overall revenue, provider engagement, and guest satisfaction.
Let’s return to the original question: How can you accurately compare your business to similar brands, and how do you know when it’s time for a change? Simply viewing your own performance in isolation isn’t enough. Without comparison, you won’t know if your overall revenue – for example – is high, low, or at the industry average. The same goes for retail sales, provider utilization, guest satisfaction, and more.
This is where industry benchmarks come in. With data from thousands of businesses similar to yours, you get a realistic view of where you stand, and the results you should aim for. Zenoti data experts have collated data from across North America to establish performance levels for salons, spas, medspas, and barbershops.
Let’s start with revenue. How does your business compare? Is it time to update your processes or consider new revenue strategies?
The benchmarking report compares membership-based spas to non-membership spas and reveals a fascinating trend: High-performing membership-model spas have lower invoices – and higher total revenue.
This might seem counterintuitive but during the webinar, Donna Simonds shared two crucial insights from the Laser MD Medspa membership program:
“We introduced our membership program in April 2022,” she said, “and it took off very quickly. Our repeat clients are coming back multiple times, so it's really increasing loyalty, as a membership is designed to do.”
“But it is also increasing the number of times that folks are visiting the locations. So, the overall spend and lifetime value of that client is increasing through the membership.”
“The other aspect: it's a monthly membership, so whether the client comes in or doesn’t, we're getting recurring revenue, which is extremely valuable.”
Memberships are a relatively new strategy in the beauty and wellness industry, but have proven profitable for businesses who provide regular repeat services like hair and skin treatments, shaving, waxing, or nails. Often positioned as multiple, regular products, discounted services, or services with extra “member” benefits, membership programs provide greater value to loyal clients. They also have a positive effect on your revenue, thanks to recurring payments, repeat visits, and overall customer retention.
You may not currently want to add new services or staff – but that doesn’t mean your revenue should remain stagnant. Here’s an alternative: Update your retail strategy to increase your average ticket size without changing your business setup.
Simonds, Laser MD Medspa CEO, notes that “Product bundle sales are an incredible way to enhance the overall productivity of your location.”
Every appointment at your business is an opportunity for providers to demonstrate their subject knowledge and suggest products that address a guest’s desires or goals. It’s a natural conversation topic in the chair or treatment room.
“There are a couple of ways to think about bundle sales,” Simonds continues. “First of all, I create the bundles and then work to educate the team.”
“When you create bundles, you absolutely want to include something that that drives repeat visits,” Simonds explains. “Whether it’s a product sale or a vitamin injection, we choose services where clients need to return. The more the clients return, the more opportunity you have for an upsell or cross-sell.”
Simonds ensures her team is thoroughly educated in both product knowledge and sales skills: “For products, there is a very simple sales process. You walk every client up to the front desk with three products. If you walk them up with three, they'll purchase one.”
Another strategy is to check a client’s last set of purchases. If the client purchased a product three months ago, a simple reminder to get their refill can close a sale: “It requires no additional advertising dollars or staffing dollars. It goes right down to your bottom line.“
Growing your revenue requires more than just increasing ticket prices. To maximize each day’s earning opportunities, top-performing beauty and wellness businesses carefully consider their scheduling to increase utilization.
That includes minimizing dead time between appointments, and ensuring the right staff and skillsets are on hand to meet customer demand.
“You can have a full appointment schedule with only one person working,” explains Simonds. “That's not going to drive your revenue. You must have the right number of folks to meet client needs.”
“Also, how long are your clients waiting for the next appointment? Is there enough open time in the schedule to get your clients in the door quicker?”
Michael Meulemans notes three keys to sustainable salon growth:
“It's about realizing the highest revenue per appointment,” says Meulemans, “while also ensuring that your customers are delighted with their experience.”
Gift card sales is an oft-underused revenue strategy. Digital and physical cards require minimal time and resources to set up and are an effective way to boost sales and gain new guests.
Businesses who offer gift cards are primed to gain more new clients and higher revenue. At Laser MD Medspa, the most common gift card amount is $50, but most services cost more than that. The result: In addition to the gift card sale, the medspas gain additional revenue when the gift receiver spends more on their desired service.
Laser MD Medspa also introduced a successful promotional strategy in the form of free $5 or $10 gift cards given to clients who purchased higher-priced gift cards. The free gift card carries an expiration date to encourage clients to visit sooner – and recoup the gift amount through increased visit frequency.
Gift cards can be especially effective around typical gifting holidays like Christmas, Mother’s Day, and Father’s Day. Simonds uses the Zenoti software platform to sell and promote their gift cards – and had recently done so for Mother’s Day.
“I sent out a text campaign on Saturday about last-minute gift cards for Mother's Day or for yourself,” she explains. It was really fun to watch – although we're closed on Sundays, we had sales coming through our website with folks going online and purchasing gift cards.”
Your business could be missing out on revenue without you even knowing it. You may be charging less than you should, not fully utilizing your staff, or failing to use new, proven revenue strategies.
The starting point to any strategic insight is understanding the latest industry benchmark data. It’s the only way to see your place among similar businesses, see what works for top performers, and keep your business ahead of the curve.
Curious to see how your business compares in 12 essential performance metrics?
Download your copy of the report.
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