Larry,
I keep track of my benchmarks very closely; however I do not know what the industry average is for client retention? Can you tell me what the average is? In addition, I would really like to set up a retention benchmark to help keep my staff on top of our goals. Can you tell me how to go about doing this?
I keep track of my benchmarks very closely; however I do not know what the industry average is for client retention? Can you tell me what the average is? In addition, I would really like to set up a retention benchmark to help keep my staff on top of our goals. Can you tell me how to go about doing this?
Elliott
Elliott, Retention is a very difficult number to compare. The reason for this is there are two types of retention. First, there is retention of existing clientele and secondly, there is retention of new clients.
You asked me the industry average for new client retention. This is one number that I have never been able to put my finger on. I watch for this all the time. I also mentioned that I went out to all of our salon clients and asked what they look for and I only had one person that responded and that was 40 percent.
Since I do not feel that we can really pull a number and feel that it means anything, I think there are other ways to look at retention which are more meaningful.
Here is what I suggest:
· I would set up a procedure so that on a weekly or bi-weekly basis the management team would make a list of clients that had not been in the salon for the last eight weeks.
· This list of clients could then be reviewed. Looking at that list of clients with your management staff, you would find that some of those people are on vacation, are scheduled for the next week, or have not been heard from.
· Once you know exactly who has not been seen for that period of time, contact can be made with the clients to determine why they have not booked.
Quite possibly, eight weeks is too short of a number, especially for colorists; but, it would be a starting point.
You could then meet with your technicians and review with them the people that are not retained to determine reasons why the clients have not come back. Since retention is as important to the stylists as it is to the salon, I do not think that a bonus needs to be paid on retention.
After you have had a chance to review this, let’s talk. It is a pleasure serving you.
Larry Kopsa, CPA
You asked me the industry average for new client retention. This is one number that I have never been able to put my finger on. I watch for this all the time. I also mentioned that I went out to all of our salon clients and asked what they look for and I only had one person that responded and that was 40 percent.
Since I do not feel that we can really pull a number and feel that it means anything, I think there are other ways to look at retention which are more meaningful.
Here is what I suggest:
· I would set up a procedure so that on a weekly or bi-weekly basis the management team would make a list of clients that had not been in the salon for the last eight weeks.
· This list of clients could then be reviewed. Looking at that list of clients with your management staff, you would find that some of those people are on vacation, are scheduled for the next week, or have not been heard from.
· Once you know exactly who has not been seen for that period of time, contact can be made with the clients to determine why they have not booked.
Quite possibly, eight weeks is too short of a number, especially for colorists; but, it would be a starting point.
You could then meet with your technicians and review with them the people that are not retained to determine reasons why the clients have not come back. Since retention is as important to the stylists as it is to the salon, I do not think that a bonus needs to be paid on retention.
After you have had a chance to review this, let’s talk. It is a pleasure serving you.
Larry Kopsa, CPA
