Manage by Numbers

Well, it's a brand new day. Not only are owners sharing and educating their staff on roster of numerical calculations, they are using them as measurements of performance, and rewarding, even compensating, accordingly. These owners are quickly discovering that not only are their team members interested in the numbers, they are embracing them and being inspired by them, which in turn is driving the overall growth of the business.

On Point
Using statistics available through their Shortcuts Software, Danny LeClaire and Aubrey Loots, owners of Studio DNA with two locations in Los Angeles, designed a rewards system that levels the playing field for their team members. For each individual, the salon developed a growth model that measured the following performance numbers: number of clients per week; service dollars per week; retail dollars per week; retail units per week; color/highlight services per week; rebookings per week; add-on treatments per week; and pre-bookings per week.

"For established stylists we looked at their existing averages and for new stylists we looked at what we thought their growth model should be," says LeClaire. "Then we developed individual goals for each of the measures for each service provider."

The owners then presented each team member with their individual goals and set up a system that rewarded points each time a goal was met. LeClaire then announced that at the end of the first six months, the two staff members with the highest number of accumulated points would be accompanying Loots to a hair show in London, expenses paid by the salon. While the points allow individuals to compete against their teammates, to reach each goal the individual is competing only against themselves.

"Each week, we'd spend 5 to 15 minutes with each service provider, reviewing both their weekly numbers and their accumulated numbers," says LeClaire, who presents the numbers in a graph format. "The numbers are easy to understand when they are presented visually - you have your goal and you are at 'X' - you can easily see how far above or below you are from your goal."

While each service provider's goals were kept confidential between the salon management and the individual, LeClaire did post each team member's number of points tally in the breakroom, so each person knew where they stood in the competition. Periodically, thoughout the competition, LeClaire would design special incentive programs that offered additional points to coincide with a salon, retail or service promotion.

About once a month, the owners would analyze the numbers in more depth and see if there were any trends developing with either an individual or the salon overall. "Then we'd work to address any issues that might be impacting an individual's performance," says LeClaire. "For example, we had one employee who was suffering from back problems - we could see her numbers slipping as the back issues absorbed her energy and focus."

When the owners witnessed another good stylist slipping in new client retention, they took action. "We sat down and asked her how much she loved the clients that she was seeing, and ultimately we discovered we weren't doing a good job of matching the clients' needs to the talents and preferences of this stylist," he continues. "I do believe there is a population of clients for every service provider. From a numbers perspective she was seeing the wrong kind of client, so we bumped up our marketing to attract the right kind of clients and made a better match."

By watching the numbers, LeClaire witnessed the dip in sales in September/October 2008, like most other salons, but after presenting the goal system last January, the salon quickly got to the point where business increased by 25 percent. The owners found it even more interesting to watch how stylists gained points. "By the fourth month of measuring, there were four or five team members who had consistently led the group in points accumulation, but toward the end of the competition there were a whole bunch who came up from behind and caught up," says LeClaire. "The competition really got them engaged in the conversation of salon business - and everyone would study those who were accumulating high points to see what they were doing right and how their success could be emulated."

From the Start
Certainly, Studio DNA is proving that an appreciation for numbers can be cultivated. But wouldn't it be great if that grasp for numbers was inherent in all stylists?

While that may be a little much to hope for, the Fila Academy, with campuses in Maryland and North Carolina, is training its students in numbers, along with their cutting and coloring skills. As the students develop their technical skills and begin to work on clients who come into the academy, the school routinely measures students on their service dollars, their retail dollars and their rebooking rates.

"We are completely about the numbers, we look at them every month and use them in ranking," says Stephanie Savoy, sales leader.

"As students prepare for graduation, they are armed with their percentages. They have the ability to talk about them in interviews with prospective salons."

"While the management of the salon reviews figures each day, they sit down and review them with each individual once a month."

"We powwow with the students in the morning and we post the numbers in the back," says Savoy. "We give awards to the students who are in the top 10."

Perhaps even more important, students have the ability to translate their numbers into rates, which can tell them what their earning potential will be in a salon environment.

Salons that interview Fila Academy students also appreciate the numerical training. With a working understanding of the numbers, students can handle a more sophisticated conversation with recruiters, as well as list their percentages and 'awards' on their resumes. "Salons think it's great," says Savoy.