6 Important KPIs Every Salon & Spa Should Track

Now more than ever, it’s crucial for salons and spas to identify key performance indicators (KPIs) and set goals for their business and employees to achieve success as they adapt their business to the future.

Creating KPIs, setting goals, and taking the necessary actions to meet or exceed them will help drive business success and growth. And while there are many you can choose to start tracking for your salon or spa, our team has gathered 6 of the most important KPIs to measure as you plan for the future.

Read on to learn more about these 6 key performance indicators, including industry averages and strategies you can take to start accomplishing and maintaining your goals today.

An important KPI that helps measure business growth is New Guests Per Month, or the average number of new clients you are servicing each month. Unlike a few of the other KPIs on this list, there is no recommended goal, as this number will vary from business to business due to a variety of factors. Meevo users can easily measure this KPI (and most of the others in this blog) by running the MA200 report.

There are steps salon and spa owners can take to help meet or exceed their goals. Enhancing your marketing strategy is a great start. Expand the methods you use to reach and engage new clients through social media. Updating your social channels and sharing helpful content can help attract new clients to your business, ultimately improving New Guests Per Month.

You can also expand your hair salon marketing efforts by incorporating new strategies such as text messaging, customized emails, and an increased focus on video content.

Once you get new clients into your salon or spa through marketing or word of mouth, it’s critical to retain them to drive future revenue. By tracking New Client Retention, the percentage of new clients that visit and return for their 2nd visit within 90 days, you can understand just how effective your strategies are in retaining new clients. For Meevo users, running the MA200 report can help you easily track this KPI.

The industry average for New Client Retention sits at 35%, but the Millennium Systems International team recommends setting your goal at 50%. With this KPI, first impressions are everything. That’s why owners and Services Providers need to ensure that a new client’s first visit to your salon or spa exceeds their expectations.

One idea is to create new client goodie bags filled with products and samples for them to try at home. Not only does this increase the chances of your new guest leaving your salon with a positive experience, but it also provides an opportunity to hear how the products worked, creating a potential upsell opportunity if they book a future appointment.

Not only should you track how well you retain new clients, but you should do the same with existing customers. Repeat Client Retention is another critical KPI for salons and spas, as 80% of revenue is brought in by repeat clients. The industry average sits at 75%, but our team recommends setting your goal at 85%.

How can your business accomplish (or ideally exceed) this goal? One tip is to practice rebooking at the end of every service. Clients are far more likely to schedule their next appointments during their current visit, so be sure all Service Providers are trained on how to rebook their clients effectively and use salon booking software.

For Meevo users, another practice that can help is to run reports showing all clients who haven’t booked an appointment over the past few months. You can use the results to call, email, or text these clients to remind them of the latest news at your salon or spa (such as updated hours and offerings), and prompt them to book their next service.

Running the MA075 report can show client retention details for the current month as well as future projections.

In addition to retention data, another KPI that’s important to salons and spas is the average number of times a client visits in a year, or Frequency of Visit – with this KPI, increasing the average means additional revenue for business owners. The salon industry average is 4.88 visits per year (per customer), but setting a business goal of 7 to 8 times per year can help drive additional sales.

To meet this KPI, try creating packages and memberships to offer your clients. Packages tend to be sold at a discounted rate since clients are paying for services in advance. However, this encourages clients to buy the packages and return to your salon or spa.

Memberships are also valuable in improving the frequency of visits. They entice clients to try new services, products, and add-ons, which leads to more future visits. Memberships that offer monthly services help increase the likelihood of repeat appointments while also adding a recurring revenue stream for a salon or spa.

Perhaps the most effective way to improve frequency of visit is with standing appointments – the ultimate rebook. In Meevo, standing appointments are easy to set up, so staff can schedule a recurring service appointment for multiple dates in the future, at the right frequency.

Just like most of the others on this list, the MA200 can help you measure this KPI.

Increasing revenue is a goal for almost all retail and service-based businesses. For salons and spas, one way this can be tracked is through Average Ticket, or the average dollar amount a guest spends per transaction. As with new guests per month, goal setting for this KPI can vary for each business as it depends on a wide variety of factors, including:

But a good number to strive for could be $5 extra dollars per guest.

One way Meevo users can increase their average ticket is to set up add-ons in their software, which will prompt Service Providers during every transaction to ask if their clients would like to purchase additional services or products. Salons and spas can also offer product bundles, which can be sold separately or be recommended as an add-on for select services.

Both add-ons and product bundles are great ways to increase your average ticket and drive additional revenue.

To keep track of Average Ticket, Meevo users can run a few different reports, including the MA200.

Another KPI that is relevant to just about all businesses is productivity. For salons and spas, this represents the measurement of how busy Service Providers are during scheduled business hours. What do you think a recommended productivity goal for employees should be?

Believe it or not, owners should strive to set their employee productivity goal to be 75% to 80%. If productivity reaches above 80%, customer service issues could arise because Service Providers will be too busy to perform essential aspects of their job, such as upselling and engaging with clients.

To improve productivity and reach your staff’s optimal output, ensure your team is well versed in your products, services, and specialties. This knowledge, along with customer engagement practice, can help lead to a more productive team that can both answer client questions and steer them in the direction of their next favorite product or service.

For Meevo users, running the MA200 report can help you track employee performance. The MA060 is also a valuable report for measuring productivity.

The six KPIs listed above are just a few of the many your business can choose to measure, and using Meevo can help you take the steps to accomplish the goals you set for your salon or spa.