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Know your Key Performance Indicators (Key Metrics)


Key Performance Indicators are your Spa’s measures of success. KPI’s measure your Critical Success Factors (CSF) and CSF’s are what your Spa must excel in, to succeed at doing business. There are KPI’s for both retail and services. Choose your Spa’s top priorities make the decision today to measure and monitor your KPI’s for immediate improvements by tomorrow.

Depending on who you talk you, different levels of importance will be placed on different metrics. It will be up to you to do your research and uncover the ones that are best suited to your business. The two key benefits to monitoring your metrics are:

  1. They provide the absolute best opportunity for you to run in-house team-based campaigns with your staff. In this way, metric monitoring can actually help build team morale. If you take the time to carefully orchestrate these campaigns with your staff, you get staff buy-in. Staff buy-in means results and results mean rewards.
  2. And the rewards don’t end with the staff, in fact the biggest reward of all sits on your bottom line.

My favourite metric is the percent retail success rate from booked appointments. This measures your staff’s ability to sell retail in relation to the number of appointments that are booked that day. By basing sales on the number of available opportunities, we are focusing on whether or not the client is actually buying, as opposed to how much they are buying – so it’s a very good place to start. If one staff member has 10 appointments booked that day, she has 10 opportunities to make a sale. It is a strong indicator of whether or not we have good staff incentives, training and follow-through procedures in place. If the opportunities, or appointments are limited that day, in tandem with the usual retail sales training we provide our staff with, we should be continually encouraging and rewarding staff who are able to increase the dollar amount they are selling, to fewer available clients. In other words, rewards may come to those staff members with the best increase in sales month over month, as opposed to those who just have the highest dollar amount in sales.

Formula for calculating % Retail Success

# of Retail Purchases (Actual) / 10
# of Appointments (Potential) 20
= % Success Rate 50%

Is a 50% success rate good enough? I don’t believe it is, it should be 100% – every client should purchase at least one retail item, every time they have an appointment. So how do you improve upon this result? Run an internal staff campaign!

How will increasing the Retail Success Rate affect your Spa revenue? Better yet, what would it look like if you increased the RSR and the average sale per transaction?

Scenario 1 Scenario 2
(Increase Success Rate)
Scenario 3
(Increase Ave.Sale)
# Of Appointments 20 20 20
Number of Sales 10 15 15
% Success Rate 50%
(# of sales divided by appointments)
75% 75%
Average Sale $50 $50 $75
Total Sales $500 $750 $1,125

You will see that in Scenario #1, with 20 appointments, at a 50% success rate, we generate $500. In Scenario #2, by increasing the success rate to 75% from 50%, we have boosted revenues to $750 with those same 20 appointments. In the best Scenario #3, in tandem with the success rate increase, we have now also boosted the average sale per transaction to $75 from $50, generating a substantial increase in revenues from those same 20 clients. This is not pie in the sky; these are feasible, realistic increases that can occur over time if you set your intentions on improvement. This kind of increase on a daily basis can equate to thousands of dollars going directly to your bottom line. This kind of pay back comes when you do two things: 1) Put the tools into the hands of your staff, including product training and product availability; and 2) Install support systems, including encouragement and rewards.

There are numerous other metrics you should be monitoring, such as Room Utilization and Average Ticket Price, etc., etc.  You can find detailed information and step by step guidance on how to manage all your metics in our Spa Finances Business Manual as well as our Spa Management Distance Learning Certificate Courses.


About Leslie

Spas2b Inc. is a full service Spa Development company, specializing in Online Spa Management Distance Learning Courses, Spa Business Manual Instant Downloads & Resources, and Spa Consulting Services.
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