The four metrics you need to be tracking right now
- Feb 24
- 3 min read
I remember my very first consultation with my former business coach. She asked me, "What is your salon's productivity rate?" cue the crickets. "What is your salon's prebook rate?" hmmmm... "Do you know your salon's retention rate?" that's when my embarrassment sunk in.
The truth was, i didn't know any of my salon's metrics and at the time, i didn't see the value in knowing. my salon was busy, booked and making money (or so i thought.) up until that moment, i had left the financial tracking and management up to my accountant and bookkeeper. profit & loss? that's their job. Balance sheet? i'm balanced! statement of cash flow? who needs it? my ignorance had been serving me, until i recognized how little i actually knew about the health of my salon.
now i know that those pesky, annoying numbers? well, they tell the story of how well your business is functioning. they tell the story of how strong your team culture is, how tight your systems are and ultimately, how informed you operate as a leader. for years, i had been running completely blind.
starting my journey with becoming financially literate was uncomfortable. mainly, because i was so well versed at everything else in my company. from providing services, to inspiring my team, to picking the perfect products for retail, to nurturing professional client relationships. In every other area, i was knocking it out of the park. so, admitting that i was not "good" at this part of my business left me feeling vulnerable, exposed and rather embarrassed. i didn't have a handle on what some might call the single most important marker of a functioning business.
i started slowly. I asked my bookkeeper for a crash course in how to use quickbooks, read reports and set up my P&L in a way that made sense for my business. i worked with my business coach to create sales projections and cash flow plans. I learned what key metrics i needed to track in order to understand how well my business was operating.
if you are a salon, spa or service based business, these are the metrics that, in my opinion, are non negotiable to track: productivity, prebook, new client retention and returning client retention. these are not the only metrics i suggest tracking, but rather, the most important.
productivity tells you how busy your salon or spa is. it is the amount of hours you've sold vs the hours you have for sale. in our industry, we have two ways of making money; selling time and selling retail. so, measuring this metric gives us important information on how much time we've sold, have available and if we need to hire or if we need to market to drive our books.
prebook is the direct driver of both productivity and returning client retention. if you aren't setting your client's next service up before they walk out the door, you've missed an opportunity. the industry standard is that you are pre-booking 40-60% of your clients. If you aren't suggesting a specific return date to your clients, you have little to no control over your schedule.
New client retention tells us how many brand new clients come back to see us for a second visit within a specified time frame. returning client retention tells us how many existing clients return to visit us for repeat services within a specified time frame. unfortunately, this information cannot be tracked in the present moment, but rather 60-90 days in the future. so, how do you know if this number is going to be healthy? two ways: creating extraordinary guest experiences and pre-booking.
many of the clients i work with feel intimidated by tracking their metrics and starting their financial literacy journey. all of these metrics can be tracked manually, but i recommend having a salon/spa software that easily formulates these metrics for you. i recommend boulevard to all of my coaching clients. their reporting functionality allows you to determine your metrics with a couple clicks of the mouse; so you can spend less time working with numbers and more time working with your team and guests.
in my 1;1 work with clients, i offer training, tools and spreadsheets to help you develop your relationship with numbers and feel empowered by knowing them. if you are interested in developing your financial literacy or systems, schedule a clarity call with me or consider attending my financial foundations live workshop next month.
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