How do incentives work normally? Sell a product or service, win a prize, after a few weeks the person with the most prizes wins an event bigger prize. Right? In theory, sales should go through the roof as everyone puts in the effort to win the star prize. In practice, however, it often starts out great and then a few days in the people who are naturally good race into the lead, and those who aren’t so great lose interest as they think they will never win. Then a week or two in, the people in the lead slow down as they know they have it in the bag and don’t need to push.
So, what’s an alternative? Instead of individual incentives, try this: team based incentives.
How does it work?
1) Split your stylists into two teams. (Make the teams as even as possible by separating the top sellers, those who are amazing at consulting, the those who are great at closing the sale, etc.)
2) Set team targets. for example:
30 products = Champagne breakfast for the team
50 products = Dinner out for the team team
75 products = Dinner out and then night out for the team
You could also set bonus points for special products or services that you want them to focus on. Change them each week the incentive is running and you can create a ‘product of the week’ feature for double points. And it doesn’t just have to be on products. It could be on treatments, services, keratin treatments, anything you want.
If you have a small salon team, or don’t want to create the competition, then you could do just an incentive for the whole salon. This works particularly well around Christmas: let the stylists know the better they do, the better the Christmas party will be!
How is it better?
1) It improves team morale by letting your stylists work as a team and mentor each other whilst working towards one overarching goal.
2) It will develop your stylists skills, as the weaker member will be able to learn the stronger team members’ winning tips and tricks.
3) It will motivate your stylists to do better with the competitive team members spurring the others on as they won’t be able to win by themselves.
Give it a go and let us know how you get on.
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Great points, thanks for the comment.
For me it comes down to two points:
1) Whatever sales count towards the incentive should be additional to your normal sales.
Let's say each stylist on average currently sells 2 units a week. You would create the incentive so that they needed to sell 3-5 units on average per week to start qualifying for the rewards. This would mean you would be selling 1-3 units a week that you weren't selling previously and it is pure incremental growth. Over 4 weeks, it could be an extra 56-168 products of additional products vs. what you would normally do. As you know this is the best case scenario and is asking stylists to sell an extra 3 products a week is difficult, but I would make sure the targets are not low enough so that you start rewarding your team for what they are already doing. As you said it will eat into your profit for your bills and it won't give them targets to push for.
2) As the sales are all additional, you could look at reducing your take home profit to reward your staff.
Assuming that on a day-to-day basis your turnover covers your bills, then after the initial investment of the products the profit you will be making from the products sold from the incentive is all growth. So, you could take a larger percentage out of the profit to reward your stylists and afford to go out for drinks/meals/entertainment. Thinking long term, as long as they've recommended the right products, the new clients that they have sold to during the incentive should come back next visit and want to repurchase. So, for giving up some of the initial profit in the short term to incentivise and reward your stylists you will still get the profit back in the long term.
Lastly, The next time you decide to do a team incentive, you would raise the targets to the new level and any growth would again be incremental.
Obviously every salon is different, but this would be the way I would break it down to find out a reward structure that could work. Also, try and include services like treatments, head massages, etc. as the profit on these will generally far exceed retail products.
Let us know how you got on, and we would love to hear any thoughts you have on our other posts.
Stacy
For the beauty side, I would also set them targets to sell additional services and products that can feed into the reward fund, so they can pay their way.
For team members who aren't on the floor like your salon coordinators and managers, I would set them the task of bringing extra clients in during the incentive. They could be challenged to get an extra X clients a week through social media, local PR activities, publicising at local events, enticing existing clients to come in for new services and treatments, etc. That way they can also bring additional business to the salon that can contribute towards the reward pot.
Stacy