Do you offer commissions for level-one membership sales? You should because it’s a great way to improve morale at your tanning salon. My approach to tanning salon management can be summed up with one phrase: “Employees who feel appreciated always do more than expected.” I’ve seen this prove itself time and time again. You can use this concept when it comes to offering commission for level-one membership sales. Believe it or not, these bonuses aren’t just about the money. It’s also a great way to say “Good job!” to everyone who does something to deserve it. That’s why it’s important you know what you’re doing when it comes to offering compensations.
Employee Compensation: The Wrong Way
I wish I had a quarter for each time I’ve heard a salon owner say, “I’m not paying them extra for doing their job!” If I did, I’d have enough money to compensate every salon staff member who didn’t receive a commission on each entry-level membership they’ve sold. Sadly, too many tanning salon owners refuse to reward employees for selling entry-level memberships and they’re missing a prime opportunity to motivate their employees.
Salon owners who don’t offer compensation on entry-level memberships use a strange logic to justify this decision. Many say, “Why should I pay someone for doing their job?” The problem is, when you pay someone minimum wage, “doing their job” means showing up on time, looking presentable, and being willing to clean tanning units after each session. It might also mean expecting the employee to leave their personal issues with them at the door. Anything above this bare minimum is considered extra at minimum wage.
Reward Entry-Level Membership Sales
The entry-level membership is one of the most important EFT memberships to sell. Surprised? Well, it’s true. These sales typically represent first-time sales to new clients. This means your staff has to convince the person on the other side of the counter to trust them with their personal banking or credit card info. This is why it’s easier to upsell level-one members because they’ve already gotten over the perceived trauma of sharing their banking information.
Look at the Numbers
Many tanning salon owners are overly focused on selling high-end lotions that they neglect sales of products priced $30-$50. The reason for this is obvious – the high-end products offer a large profit margin. Salon owners tend to have the same attitude toward membership sales. They focus upon Level-Two sales and above at the expense of their entry-level memberships.
Consider this: Your staff probably sells more entry level memberships than you can sell the higher-end packages. This means you earn more profit if you focus on the lesser-priced memberships than focusing on the premier services. The same applies to tanning lotions and similar products.
Let’s take a look at the numbers: You have a salon per customer average of $80, and your level-one EFT membership is $19.95. Given those numbers, you need to keep that entry-level tanner for five months to earn more than what your average unique client spends in an entire year. Any profits you earn above your annual average PCA put you ahead. Keep in mind that the average tanner keeps her memberships for about eight months to a year.
Tip: Increase Membership Sales
I’d rather have 100 level-one memberships sold than 10 top-level packages any day. Why? Those entry-level members are a “captive audience” that my staff can upsell to higher levels. As level-one tanners purchase higher-level packages, they become more loyal to your salon because of the uniqueness of the higher-level equipment. Once converted, the competitor’s cheaper entry-level price becomes less attractive.
Compensation and Tanning Salon Management
So what do compensations have to do with tanning salon management? A lot, actually. Remember my phrase “Employees who feel appreciated always do more than expected?” Offering compensations for entry-level membership sales is a great way to show your appreciation. Many tanning salon owners don’t do this, so your employees will appreciate earning extra for closing the deal on level-one memberships. They’ll work harder to do this, and you will reap the most rewards.
Minimum Wage = Minimum Effort
While we’re on the topic, let’s talk about minimum wage. Do you still expect someone who’s responsible, reliable, and has with sales skills and mature judgment to work for $7.25 an hour? Would you? While offering incentives can bring up the average hourly pay, it’s tough to recruit quality employees for the bare minimum. Paying $8-$10 an hour increases your chances of attracting better employees who will make more sales and earn you – and themselves – bigger profits. Try it and see!