KPIs for the salon

Mentor:

John Palmieri

Transcription

Chris Sulimay: Check this out.

 

John Palmieri: Hey! Welcome back. We thank you for being here, for the 124Go video cast [cross talk]

I think that’s what we’re calling this, my good buddy Chris Sulimay.

 

Chris Sulimay: Hey guys! Welcome back.

 

John Palmieri: John Palmieri. And we’re going to talk more today about some of the things that are really important that we use to help our stylists grow.

 

Chris Sulimay: Yeah, fantastic and so we have a little acronym for this, It’s KPIs  [00:00:30]

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John Palmieri: KPIs.

 

Chris Sulimay: And what are KPIs? What does that stands for?

 

John Palmieri: You know what? I forgot.

 

Unison: “Key Performance Indicators.”

 

John Palmieri: I think [incomprehensible] I actually say KPIs.

 

Chris Sulimay: Yeah, no. I think like “real business people” talk with that term.

 

John Palmieri: Yeah, when I hang out at the club  I say “KPIs.”

 

Chris Sulimay: Fantastic

 

John Palmieri: But, when I’m talking to you, talking about your goals, talking about your numbers. Sometimes I use the words “metrics. We’re going to talk about that today.

Chris Sulimay: Yeah, fantastic. And so, you know, here’s what’s interesting. [00:01:00] We talk alot about this, I’m a stylist I got in this industry to be creative-

John Palmieri: “What are you making me track numbers for?”

 

Chris Sulimay: Yeah and so what are you making me track numbers for?

 

John Palmieri: Yeah, you know, I say this a million times. Everybody who has heard me say this is about to say, “He’s gonna say it”. I’m gonna say it.

 

Chris Sulimay: Say it.

 

John Palmieri: Your numbers tell a story, you know, and I want to know your story, because hopefully, I could help you have live happily ever after. I want to help you have [00:01:30] a great ending to your story. Well maybe not a great ending, because I don’t want it to end.  A great middle, a great start, a great middle, and just a great story.

And numbers tell the story of how you’re doing, they tell the story of your career. They tell the story of where you’re struggling. They tell the story where you’re not struggling. The things that you need to be praised for cause you’re doing awesome with. It tells me a lot… It doesn’t tell me everything, let’s be clear on that but it tells me a dang lot.

Chris Sulimay: Yeah. And here’s the reality, you know, here’s some numbers and here’s some indicators [00:02:00] that you might want to think about if you’re watching this video and if you’re a salon owner, I think it’s really key to know this is, number one, statistically speaking- we didn’t make the stuff up- 80% of people that go to hair school don’t make it actually out of their first year as a cosmetologist.

John Palmieri: Is it that low?

 

Chris Sulimay: Yeah. So people go to cosmetology school and within… Either they don’t get through school and then they don’t land in a home when they get out, [00:02:30] but 80% of those people are out of the industry within 5 years or doing the thing whether it is salon hopping, not really “thriving,” I’ll say it like that  And, I think there’s a big argument that could be made around the fact that, I think a lot of them probably, technically, were able to develop some skills but they weren’t really able to get any traction on growing their business [00:03:00], and so, these KPIs, these Key performance Indicators, these metrics, tell a lot of times they’ll kind of reveal some of the things that we might be lacking and maybe have needed to get better at in order to help, make some traction financially.

And we’re really interested in you as a stylist and as an artist. We love that part, I love that part.

 

John Palmieri: What about the part that – I hear this once in a while –  you know “All this company cares about is the money.”

 

Chris Sulimay: Sure, [00:03:30] and  you hear that in every company.

 

John Palmieri: Right. “I don’t care about the money, I just want to be a hairdresser. , just want to do great hair that’s all I want to do.”

 

Chris Sulimay: And here’s the reality. We believe that without that money piece, that relationship, your career, it makes it really hard.

John Palmieri: I mean, here’s the thing, I want to do great hair too. All right, but I want to do great hair of more than just one person [laughter] or two people a week or four people a month. Being successful at this career, of course means [00:04:00], technically you’re really good. And it isn’t about the numbers “per se.” It isn’t about that number whether too high or too low. But the numbers, again, tell your story, where you’re struggling, where you’re doing well, where you’re excelling, and you know, it allows us, you know, from a mentoring standpoint, to help coach and develop you.

And even if you’re on your own, it allows you to look at your own numbers and do your own self coaching or your own self-analysis. I mean, here’s the thing, you know, you get on a scale [00:04:30] to see if the diet is working because, do I need to go on a [laughter] diet, so I need to get on a scale. How else am I going to know how well I’m doing?  And it’s the same thing with your career, KPIs or your scale. And they tell you how well you’re doing.

 

Chris Sulimay: Absolutely, yeah. So we’re gonna talk a little bit about [incomprehensible], we’re going to talk about the scale that we use and I’m going to flash this but I’ll have this set on the video on the screen for you. And this is a sheet it’s on here, it’s basically laid out you know in a form that looks very un-hairdresser friendly [00:05:00]-

 

John Palmieri: Wicked not even close to hairdresser.

 

Chris Sulimay: Right, exactly, you know, it’s mostly in excel spreadsheet. By the way, I [stammers] just heard it in your voice a minute ago and I never linked excel to excel. Very Interesting.

 

John Palmieri: Nice. Never too late for a cheesy joke [laughter].

 

Chris Sulimay: Absolutely.  But I’ll talk a little bit about the way this is laid out. And then I want to just kind of interview you on what are some of your favorite things to look at. How do you look at that story and again, [00:05:30] you probably watched the coaching video or listened to that coaching broadcast already, but how you kind of use this in order to help stylists grow and get to that level that they’re trying to get to. So what the sheet looks like, its got different things on here. Hours per week, client visits, new requests, service guests, new retention, , base retention, rebooking-

 

John Palmieri: And retail per guest.

Chris Sulimay: Retail per guest.  And so maybe share a little bit on that column  and what are some of your favorites and what are your know, kind of maybe take us, give us a little explanation of each and why.

John Palmieri: So, what we do is we track the numbers over a three months span of time and we take an average. So if you had five one week and five the next week and five the next week, guess what? The average is five. Because you can have a good month, you can have a great month, you can have a not so  good month. Because part of your story is not whether or not this month you did better that last month, I’m looking for patterns. You know, if you’re doing [00:06:30] as we talked about in the previous video, if you get 75 clients every single month, you’re stagnant. If you had 75 clients this month and 70 clients next month and 65 the next month, I really don’t care about the 65, that’s not really what’s important. What’s important is you went from 70 to 65 to 60. And the reverse is true. If you went from 70 to 75 to 80. Do I like 80? Of course I do. But that’s not really the point. The point is [crosstalk]-

 

Chris Sulimay: What’s the point? [00:07:00]

 

John Palmieri: You went from 70 to 75 to 80. You grew, you’re on an upward train. And that’s the story we talked about. What does that look like? How is your career going? Are you stagnant? Are you taking a dive? Are you going up?

And hopefully, we’re always going up, even if it is slowly. I’d like to see you moving up forward in your career especially if that’s, you know, what you’re trying to do which is growing your career and growing your client base.

 

Chris Sulimay: Obviously you just kind of shared on one column, but share about the relationship that these have with each other.

John Palmieri: Well, first thing that [00:07:30] we talked about number of clients per month. We want to see if that’s growing or not growing. You know, and if it’s growing I want to know why. Because, hopefully, whatever that reason is, we do more of it. If you’re stagnant, I wanna know why, let’s take a look at this secondary numbers and see what does look like and if you’re in a downward trajectory, let’s see why is that happening. And that’s why I also include hours in there because sometimes hours are the reason why, I went on a vacation for a month [00:08:00] so of course my numbers went down. I’m working three days a week instead of four. So I use that ability to relate the number of client to do to the number of hours of work in a week to see if there is a correlation.

Now if you, working the same amount of hours every week, and your clients are the same clients, 75 clients a month, then again, I want to dig a little bit, what’s your story.

I think the next biggest one for me, the one I like is retention. And retention, if we break it down into two different categories, [00:08:30] we have “New Client Retention”, and we have “Base Client Retention.” What’s the difference? New client retention is I came in once, do I ever come back again? That number, is a national average, is 30%.

Chris Sulimay: Yeah, I’m a first time client. I walk into a salon-

John Palmieri: Do I come back?

 

Chris Sulimay: Chances three out of ten that I’m gonna walk back through that door.

 

John Palmieri: Here’s the worst part. The national average is 7 out of 10 do not. Think about that for a minute. The national average is 7 out of 10 first time clients never come back [00:09:00].

Chris Sulimay: Yeah

 

John Palmieri: I don’t know how we as an industry survived that to tell you the truth,  but that’s no way to grow a career. Then there’s what I call “base client retention.” And base client retention is I’ve been back twice, you know, you got me at hello, right, now what happens? Do i continue to keep that client coming back? That number is always traditionally higher, and it should be because you made a really good first impression they continue to come back.  I hear often [00:09:30] that 80% is a good number or a national average. I still think that’s lousy, to be totally honest. If only 8 out of 10 of your regular clients come back on a regular basis, I’m sorry but I just don’t think that’s good.

Chris Sulimay: Yeah, it’s interesting in Shop Talk the metric I use for somebody four years and above is for that base client retention is 90%.

 

John Palmieri: Yeah, I like 90%.

Chris Sulimay: Yeah, I think that’s where you’re shooting. 9 out of 10 of the people that you see on a regular basis are coming back. Now here’s where the 80 part [00:10:00]. We don’t want to shame you -because I learned the 50/80 rule  when I came here to Salon 124 group- but here’s what the 80% will do is it’ll allow you in relationship to your referrals, to retain and not fall backwards. But hear us clearly-

John Palmieri: We want to grow.  80% is that you want to grow. 80% is a number to stay where you’re at

90% you know, 80% or higher [00:10:30] but 90% is a really good number. 90% is a good start to grow your business. So to a point, 80% if you want to stay where you’re at, you know, anything higher than that, is obviously good. 90% if you’re really ticking it [incomprehensible] and you’re trying to grow.

Chris Sulimay: Yeah. Now I see a couple of things down here like rebooking. How does that help our retention, how does it help our cause, what’s that all about?

 

John Palmieri: Well, I kinda look at it from a different perspective and that perspective is you know, when we’re talking about getting clients to rebook [00:11:00] before they leave. What I’m really saying is do they trust me? Because if I don’t have that trust factor built in with my clients to say, “Hey, you know, Chris I wanna see you in 8 weeks so book your next appointment.” And Chris says, “You know, I’ll book it when I get home, I have to look at my calendar first.” You know, the challenge here is what am I missing here? Why haven’t I built a trust factor with this client that they say “Yeah, let’s do that”.

So that’s one of the things I look at. There’s a secondary purpose [00:11:30] to it. My first one is the trust factor. My secondary question is I want to be able to predict my future income, I want to know that six weeks from now, my schedule is full. I don’t want to…Cause afterwards you look at your book and see that there’s nobody on it. So, I like rebooking because, one, I want to know I have a  future income, two, I know that clients trust me, and three, you know it’s convenient for[00:12:00] the customers. It isn’t always about us, sometimes it’s just knowing that the customer has an appointment when they need it so when I go to call, there’s no place to put them for two or three weeks and then I go see somebody else.

 

Chris Sulimay: Yeah, so, the way you use these numbers are, you use them overtime you use them over a three month period, and the way we on board people-  and here’s the reality. We believe like, as a stylist, you’re going to go through [00:12:30] stages of growth. If you’re newer, everything that you get put in your chair is brand new. You’re gonna experience your biggest exhilaration of growth in the beginning because you started with no client.

 

John Palmieri: Yes,  you start with zero, zero to 60 gains [incomprehensible] really fast.

 

Chris Sumilay:  Exactly. But let’s talk about sustainability and let’s talk about what’s good let’s say for a new person to shoot for and maybe we’ll walk through some of these, and kind of all of these, from a referral [00:13:00] perspective, from a client visit perspective.

I’m a new person, how do I start to grow and how do you give me this feedback overtime?

 

John Palmieri: Well, you know, if you’re new to the salon, you’ve got a client count per month of zero, it’s zero. And for us, luckily, we’ve got  six salons, we’ve got a great marketing department and we’re able, we get, you know, several hundred clients a month in each of our locations. And so that’ll allow [00:13:30] us to build our new teams pretty quickly so that’s great for them. What happens next is can they keep them? For a new staff member, retention is important, so I’m going to shoot for, you know, I hesitate to say this cause I don’t love this number, but I think for brand new stylist, coming in to the gate, 25% at a bare minimum. I really like 30, it’s the national average. Let’s be clear, [00:14:00] 30% retention rate means that 7 out of 10 didn’t come back. So, for a brand new stylist, maybe the first couple months on the floor, I can live with 25%. What’s really important is your base client. Cause once I got you in once, that 25%, can you keep them? So, in the very beginning, you’re a brand new stylist, we’re going to focus on retention, can you keep those clients coming back cause that’s how you grow and I’m also going to ask what your referrals look like?[00:14:30] Let’s get into that habit right now. Because here’s what’s going happen. You’re getting a lot of new clients cause we have a marketing department and we’re driving people on the door, that’s going to dry up soon. Meaning, when you level up to level two or level three, and you’re no longer the least expensive member of the team, those referrals start to dry up on our side and you’re going to start filling up your own book. And so, I really like a, what your referral numbers [00:15:00] looks like and what your retention numbers look like. Those are the two I focus on the beginning.

 

Chris Sulimay: Yeah, absolutely. You know, I’ll just add to that. Because when you’re new, I have this belief that you have one benefit. You actually have one benefit that a veteran stylist whose really busy doesn’t have.

 

John Palmieri: You got time.

 

Chris Sulimay: You got time. And so it’s the time that you’re able to really focus on that client experience. Really focus on your skill set-

 

John Palmieri: Nice consultation

 

Chris Sulimay: Nice great consultation. [00:15:30] And then also, very much on your referral program.

 

John Palmieri: Pass on those referral cards! You’ve got time.

 

Chris Sulimay: Absolutely. Non discriminatory, you know, your social media presence should look beautiful, all of these things because you have time. And what will happen is if you nurture, I call this the “people side” of the business, we have this conversation often. You know, if you nurture and get great at that people side first and you get that handled [00:16:00] it will become a habit.

 

John Palmieri: Let’s create that habit right now.

 

Chris Sulimay: Yeah, and what I love about, you know, storytelling and seeing these numbers laid out over time is, I get to see your habits and numbers form, and so if I’m seeing, let’s say, you’re with me, and you’re seeing low based retention, how do you approach that and what are some of the things, what are some of the stories or what are some of the things that might point out to you?

 

John Palmieri: Well you know, that’s funny because [00:16:30] I had this conversation today. I did some coaching today.

 

Chris Sulimay: I love that!

 

John Palmieri: I was meeting with this staff member [incomprehensible], they’re new, they’re level two, so they’re just starting out as well. Their new client retention rate was like 40, 45%. It was pretty dang good for a new stylist. I’m happy with 40, 45%. But their base client retention rate was like 53%. That’s, I mean that’s almost one of two people who don’t come back [00:17:00].

 

Chris Sulimay: And that’s after they’ve seen you [crosstalk].

 

John Palmieri: It’s after they fell in love with you once and for some reason, the romance wore off quickly. And that worries me, to be totally honest. Cause I can send you new people… I can send you a million new people, they’ll come back visit number two. But somewhere along the line, we don’t go down to this ridiculousness. But whether it is visit three, visit four or visit five, they stop coming. [00:17:30] And so I get to have that conversation,  “Chris, new client retention- awesome. They come in, they love you, I don’t know what it is you’ve got some kind of magic pixie dust, but they come back. But for some reason, the 3rd time, or the 4th, I don’t know which one, but they stop coming. Why do you think that is?”

 

Chris Sulimay: Yeah. And it’s a great question as far as you know in this role play we could go in that direction but I mean it’s such a great question. What are some of the things that are going on in your mind. I know you’re going to lead right… So if you didn’t watch our coaching video, it’s all about questioning [00:18:00] and getting them to self-discover. But in your mind-

 

John Palmieri: So you won’t go through that process again.

 

Chris Sulimay: Yeah, but in your mind, what are the things that are pinging in your mind when I’m losing clients?

 

John Palmieri: Well to me it’s one of three things and I know you’ve got two,  l just took one of your two and split it in half. I either think it’s your technical skills, your technical skills aren’t there. I think it’s your people skills. Your people skills being your ability to connect with people, have a conversation with them, you know. [00:18:30] Michael Hammon, one of the people we work with says that you’re either “personable” which means you get to know people quite well and personally or you’ve got personality and Michael’s the personality guy. He’s just got personality galore, but to the point- it’s either your technical skills, it’s your people skills, how well you connect with people, and the third for me is consultation. Cause I think you can have a really good ability to connect and talk with people but completely forget you’re supposed to do a consultation![00:19:00] We’re so busy having a great time which is great. I actually didn’t even bother to ask you how you want your hair today.

 

Chris Sulimay: Yeah, yeah. “I really like John, he’s great to talk to but you don’t listen to a word I say about my hair.” He’s fun-

 

John Palmieri: Yeah, he’s a [incomprehensible].  So I always think it’s one of those three and the funny part is if you ask somebody, “Chris, your base client rate retention man, is not healthy. People skills, technical skills, consultation, which one is it?” And 99.9% of the time [00:19:30], the stylist will say, “it’s this, it’s that. I know which one it is.”

 

Chris Sulimay: They know what it is

 

John Palmieri: They know what it is. It’s not a great mystery specially when you people the choices. “Here are the three choices. Which one do you think it is?” And 99.9% of the time they will give you, sometimes they say, it’s this one and that one. You know, it’s like, “okay guess what we know what we have to work on.”

 

Chris Sulimay: And it leads them right back to their plan of action.

John Palmieri: And now we go through the coaching cycle, we go to a plan of action. What are we going to do about this, how are we going to make this happen?

 

Chris Sulimay: I see this. [00:20:00] I’m starting to get the picture okay. So, I’ve got to keep people that you’re giving to me. I’ve got to make sure that once I turn them into a new client it’s still important for me to turn them into that base client retention that [crosstalk]-

 

John Palmieri: Build a long-term client.

 

Chris Sulimay: I do that through the trust building, the consultation, the rebooking. How does this relate to my income?

 

John Palmieri: Well because, the next step, once you… In the very beginning, I’m concerned about your retention [00:20:30] and I’m concerned about your ability to bring new clients in for yourself. Now we’re doing our part as a company but you can do your part too. Remember I always think that our relationship is a partnership. I will send you as many customers as I can but someday, that isn’t gonna be enough because you’re going be a level two, level three, level four stylist and let’s be honest, you know, with our marketing that comes in the door, a lot of those people are looking for our lower level stylists because of they’re less expensive. So when you start getting to those higher price tiers, [00:21;00] did you create a habit of feeding yourself to your point of how does that create income.

Well the next thing we start working on is your average ticket, right, so you’re able to bring new clients in the door to feed yourself. You’re able to keep them. Now you’ve got that under your belt, you’re a level two, level three stylist. Now let’s start working on your average ticket. An average ticket is your average service ticket and your average retail ticket.

And I like to wait on that a little bit because that’s the opportunity [00:21:30] for you to upsell your client a little bit you know, maybe you’re going to add a service, you’re going  add a waxing, you’re going to add conditioning treatments. Maybe you’re going to do a foil frame around their face when they get a base color. You need to have the confidence to do that,  “Also, I’m going to want you to, you know, suggest home care for you because you’re going to need product to maintain this look and make sure that I still look like a genius six weeks from now.” I don’t think that that’s something to start off right out the gate with. [00:22:00] You’re going to develop rapport first, you’re  going to build up the skillset first. Six months, a year down that road, now let’s start working on average ticket because here’s the good news. If I started off with 20 clients and I try raising my average ticket, I’ll get a little bump. But if I got 75 clients and my average ticket goes up, that growth is exponential and here’s the flip side. If you start working on average ticket and retail per client too soon, you start chasing clients away [00:22:30] before you even had an opportunity to build rapport and trust with them.

 

Chris Sulimay: Yeah, one of the things that’s very real for new… And, look there’s always an anomaly, right?

 

John Palmieri: There’s always that person who, for some reason came out of beauty school and their {incomprehensible] reincarnated. That wasn’t me by the way.

 

Chris Sulimay: Me neither and it happens and so I want to really clear and I’ll probably repeat what you just said in a different way, but just in case you missed it and you were listening and you and you missed the point [00:23:00], for a newer person we think you want to develop your people skills. That clientele development piece and really focus on that while confidence is happening and a big part of confidence is a technical ability. I’m getting my hands underneath me, I’m getting my, you know, technical skills down. So, when your organic growth happens and now three months down the line, six months down the line, I’m seeing-

 

John Palmieri: Whatever it is for you

 

Chris Sulimay: 55, 60, 75 clients in a month. Number one, I can handle it. I’ve [00:23:30], not only can I do I have a beautiful haircut can I do a beautiful haircut in an amount of time and get somebody out the door while my next one’s waiting. That’s an organic process that happens. Once that starts to develop, now there’s this other piece called “average ticket”, and called “selling“ hair care, home care.

 

John Palmieri: “Chris, I’m not a Salesman, I’m a Hairdresser. Why are you making me sell stuff?”

 

Chris Sulimay: Yeah, it’s such a great question and we talk about this often and I, you know, you already know this. I’m behind the chair still, [00:24:00] so a few days a week, I get to see clients and they’re my favorite days and here’s what I know and maybe you’ll get 10 different answers. If a guest walks out the door and they didn’t purchase something or at least have a really good conversation about it, right, so I’ll even take a good conversation about it, I was focused on other things. If they don’t walk out the door with something, I can look back at that [00:24:30] appointment and I can say to myself, “What was I really focused on? I was focused on talking about a new movie. I was focused in talking about a new sushi joint down the street that we’re all going to  go to. I wasn’t really having a great conversation about the guest, their hair, how to maintain their hair.” And here’s the deal, hair products are really good nowadays.

 

John Palmieri; They’re amazing

 

Chris Sulimay: These chemists developed those beautiful products and our guests don’t know [00:25:00] about them.

 

John Palmieri: No clue.

 

Chris Sulimay: So here’s what I know. I know that if I have solutions sitting on my shelf and I don’t do you the professional courtesy of having a conversation about them, shame on me, shame on me because I didn’t give you the elevated experience that you booked for, called for and paid for and we’ve all had this conversation, I just had this conversation recently with a new guest. She said to me, after we’ve talked about a solution for her hair that she took home [00:25:30] “Nobody’s ever had this conversation with me.”

 

John Palmieri: Isn’t that scary? And here’s the thing. If you’ve got that client in your chair for the first time and you don’t do your due diligence, you’re doing the same thing the stylist before you did and the stylist before them did.

 

Chris Sulimay: And she left them.

 

John Palmieri: And she left them.

 

Chris Sulimay: She left them.

 

John Palmieri: She left them for a reason.

 

Chris Sulimay: So that’s hair care and we’re going to make plenty of videos about this.

John Palmieri: I want to talk about the sales thing too for a minute.

 

Chris Sulimay: Yes, that’s what I want to hear about.

 

John Palmieri: All right [00:26:00]. Here’s what I’m going to say about the sales thing. I hear what you’re saying right,” I’m not a salesperson, I’m a hairdresser.” I’m going to politely disagree with you and here’s where I’m going to politely disagree.

 

Chris Sulimay: Don’t be too polite

 

John Sulimay: I’m trying to be [laughter]. You know, I’m from up north, so I’m going to politely disagree with you and the reason I’m going to say that is this, “you are selling.” When somebody says to me, “Well “John, I’m not a salesperson” what I really hear is, “I’m uncomfortable. I don’t know how to have that conversation [00:26:30] without sounding like I’m pushing product on somebody” and that, I understand. I really do. What I’m going to say though is “we sell all day long. We sell our skill. I’m a great hairdresser.” I walk up to complete strangers “Here’s my business card.” You’re selling yourself, you sell broccoli to kids “Here put trees on it, the little green trees, aren’t they yummy?” We sell all day long, I sell to my wife “Baby, you know, I’m the guy for you” [laughter] [00:27:00]

 

Chris Sulimay: I’m the guy for you [laughter].

 

John Palmieri: “I’m the guy for you” –  I’m selling it! We sell all the time, we do it everyday. When somebody tells me, “John, I’m not….”  I get it. I really do. I hear you loud and clear, I got 130 stylists we work with so I hear it on a regular basis, I get it. But what I really here is you’re telling me, “I’m uncomfortable” and that I get I can understand you’re uncomfortable.

 

Chris Sulimay: “I feel silly.”

 

John Palmieri: “I feel so silly. I don’t know how to do this without sounding fake [00:27:30] or cheesy or I’m pushing things.” I never say “push things.” In fact, I’d rather you didn’t sell anything rather than push it, because people will see you as being inauthentic. What I will say is if your sales skills aren’t what they need to be, well then let’s work on those. Let’s get you to a place where you’re comfortable, and not everybody has to sell $27 average treatment per client. That’s not what I’m saying yet, it’s less about how much you’re making an extra commission [00:28:00] on retail, although, let’s be honest, that’s important. What we’re really saying is you’re sending a client home with $200 worth of services. Do you want to look like the genius six weeks from now because you gave them products that allowed them to do their hair at home and maintain their color, because I will say this because we just talked about this. If you don’t, the person before you didn’t either, what makes you any different?

 

Chris Sulimay: Yeah, no it’s beautiful. I want to talk about a little bit about average ticket [00:28:30]

Why that’s important and what, you know, first of all, what is it. What does it mean, what does it really mean? I don’t know what that means.

John Palmieri: Average ticket is, so if you walk in the door and you spend $50 and then we got two clients today, you spent 50, I spent a 100, 50 and 100, do the average it’s 75. So my average ticket is $75 right?

 

Chris Sulimay: Is this something you think people are always knowing?

 

John Palmieri: No.

 

Chris Sulimay: Right.

 

John Palmieri: [00:29:00] I think it’s one of those things where somebody says, “Hey, what’s your average ticket?” And we’re like-

 

Chris Sulimay: We think it’s whatever our cut and color is.

 

John Palmieri: Or we because we’re not really quite sure what it is and we don’t want to sound silly we just don’t say it.

 

Chris Sulimay: [incomprehensible] a guess. And so, why is it important?

 

John Palmieri: Why is it important is because it’s a math thing for lack of better way to put it. You know, if I’ve got X number of clients in the door-

 

Chris Sulimay: Let’s say a hundred.

 

John Palmieri: Let’s say a hundred clients come in the  door and they each spend $70. Well [00:29:30] 70 times a hundred, average. Some will spend more because they get balayage [00:29:35]. Some are going to spend less cause they just came in for a haircut that’s why it’s an average. Well I got a hundred clients and they spend an average of 70 dollars each that’s $7000. And that’s what I did over X period of time, let’s call it a month and that’s great. But then you say, “You know John, I want to do less clients. I don’t want to do a 100 clients a day or 100 clients a month”-

 

Chris Sulimay: Or “I’m fine doing a hundred clients, but [00:30:00] how do I bump my income now?”

 

John Palmieri: How much do you want to make? “Oh, you know if I could do $8000 a month, that would be great. That’s $2000 a week, $2000 a week times 50 weeks, a hundred grand.” Love that!

 

Chris Sulimay: So what would have to happen to my average ticket to go you know from $7000 to $8000?

 

John Palmieri: You going to get it from $70 to $80.

 

Chris Sulimay: Just 10$?

 

John Palmieri: Ten bucks.

 

Chris Sulimay: Just 10$ gives me an extra thousand dollars a month?

 

John Palmieri: Mm-hmm.

 

Chris Sulimay: So what average ticket is [00:30:30], is I take the number of people I see in a month and I multiply it by what my average ticket is and it gives you a really nice snapshot of what your projected sales would be and it also, once you understand those two numbers, I understand my client count, my guest count, how many people I see. I understand this thing called average ticket now and now I can start to literally -and this where I love the story telling piece- [00:31:00] puppet those numbers and play with them to my liking ,so I can now start the goal set around -for me not not the business doing it but- I can I can go “wow, if I wanted to go with $10,000 a month, I’m seeing an average of a hundred guests in a month” which is only 25 people in a week,  “all I would have to do is have a 100$ average ticket. Now I can start to look at my service menu” and now this is where you’ve been around for a little longer so you’re [00:31:30] [crosstalk].

 

John Palmieri: Your skillset is good and your retention is good.

 

Chris Sulimay: And this is where we talk about personal branding a lot. This is where we talk about really understanding what your goal is. You know, we have people inside of this company who are 30 years inside the industry. They know very strategically who their target guest is, what they want to work on and some of them choose to be in that really high-level demographic where they only want to do an average ticket [00:32:00] of a few hundred bucks and others are… And it’s a personal thing. Others say “you know what, this is what I want to make. I’m happy”. But they understand the numbers and they can start to really affect their behaviors behind the chair in order to make that.

 

John Palmieri: Once you get that little- and it’s not a lot- bit of math under your belt, you really start at this point to really start to direct your career to the direction you want to go.

 

Chris Sulimay: Fantastic.

 

John Palmieri: I want to talk about one more number which is actually my favorite number [00:32:30].

 

Chris Sulimay: Please do.

 

John Palmieri: Number of visits per year. It’s my absolute favorite.

 

Chris Sulimay: Huh. Why is that your favorite?

 

John Palmieri: Because think about this for a second. Let’s go a little bit bigger. Let’s go to a salon. Salon members, not individual numbers and this happened to me, you know, 25 years ago when I first opened my salon. We had a 1,000 customers. 1,000  between the four of us, there are four of us, like 250 each, we have thousand customers. They spent $50 every time they came in, because you know, it was before the war, prices were lower [00:33:00]. So you know 50X1,000=50,000. And they came in five times a year. So they spent 50$ every time they came in, there’s 1,000 of them so that’s 50,000. They came in five times a year, 250 grand.

 

Chris Sulimay: Wow

 

John Palmieri: And $250,000 is what we did as a salon at that time as a whole for the year. 250,000 and the math made perfect sense. I didn’t have enough money for marketing [00:33:30]. I just didn’t have it,  there’s four chairs. We did 250 grand. I didn’t have money for it. I was afraid to raise my prices, to be downright honest. I was just afraid. It was like “if I raise prices I’ll lose all customers.” But I needed to do something. So we started a rescheduling program, rescheduled before you leave. Do within X number of weeks and I actually give you 10% off for a period of time until the habit was created.

Here’s what happened, I still had 1,000 customers, I didn’t lose anybody, we didn’t raise prices. Hopefully I was still doing a good job [00:34:00]. We still had $50 an average ticket. So $50 an average ticket times a thousand clients, $50,000. But instead of coming in five times a year, they were now coming in seven. Well, $50,000 times seven was $350,000.

 

Chris Sulimay: Wow.

 

John Palmieri: The salon went from $250000 to $350000 in a year and we didn’t raise prices and I didn’t have more clients [00:34:30]. Now that’s on a salon wide  basis. Do the same thing with your own numbers

What does that look like when you can get into the habit of rescheduling, so you’ve spent the first year or two building your skillset, building your retention ability, doing a good consultation, a little bit further of that on the road, you developed an opportunity to track your average ticket. What does that look like? Combine a really good average ticket, maybe raise it up a little bit ‘cause you deserve it. Your [00:35:00] skillset got better.

 

Chris Sulimay: And that’s pricing, that’s different.

 

John Palmieri: And then add that you can actually reschedule them so they come in and visit more often.

 

Chris Sulimay: Yeah, you’re off the charts.

 

John Palmieri: You’re off the charts.

 

Chris Sulimay: You’re off the charts, yeah. This has been a great discussion so far. So we’ll obviously have this PDF in a printable form.

John Palmieri: right underneath the title here.

 

Chris Sulimay: Below here and you probably found us in our website but if didn’t, if you’re like watching this on Youtube, or listen to it on a podcast, you could also reach out to use at any time [00:35:30] we’d be happy to have this conversation with you more thoroughly, but what are your closing thoughts on this? Anything you want to say about KPIs and just some of [crosstalk]-

 

John Palmieri: Here’s my thought with KPIs. You know, there’s five or six, that we like to track. Don’t try to do a five or six at once, you’ll drive yourself crazy. You know, look for the one or two right now that you’re struggling a little bit with or the ones that aren’t quite working for you and pay attention to those one or two because here’s the thing, I promise you, if you can adjust one or maybe two of those numbers [00:36:00] and all the others are doing okay, you will see exponential growth. And then once you get, let’s say your new client retention, when you get your new client retention rate to a comfortable number, then start working on your rebooking. And I want you to get that to a comfortable number, you can work on something else. I promise you a year from now, you’ll be a different stylist.

Chris Sulimay: Thanks so much for watching. Great stuff John.

John Palmieri: Thanks, Chris.

Chris Sulimay: Really appreciate this conversation. Awesome. Bye everybody.

John Palmieri: See you soon.