Q: “Tanning salon owners like me get so much conflicting information about commissions. I’d like to know your take on offering commissions to salon employees, both in principle and how much you believe in appropriate.
As a tanning salon business consultant, I get this question a lot. My answer is always the same: tanning salon owners must pay real and meaningful commissions on tanning lotion and products, EFT memberships, and upgrades. Unfortunately, I cannot give you an exact dollar amount or percentage here. Every tanning salon is different, so the ideal commission schedule varies from business to business.
I will say that you should offer something that makes it worth your staff’s time to sell tanning lotions and everything else. If you don’t, you’ll be stuck with salon employees who merely go through the motions and tell tanners, “Room number three is ready.” Or, you won’t have any employees at all, since they would’ve packed up and left for other jobs.
When it comes to commissions, I recommend paying in three directions:
- Graduating lotion commissions that move from 10 percent from dollar one to 15 percent after a set dollar amount is sold in a month. (Example: The employee earns 10 percent for every tanning lotion sold until they earn a certain amount, let’s say $80. Once that threshold is reached, the employee starts earning 15 percent on every tanning lotion they sell after that. Note: You set the threshold at whatever dollar amount works best for your salon’s demographic.)
- Pay a meaningful dollar spiff for every EFT package sold then increase that amount with EFT package sales in excess of a set amount. Base both the lotions and EFT incentive increases on the salon’s current trends compared to the same months of the prior year.
- Run a monthly competition between your sales associates on the biggest percent increase of their per tan average from the prior month. This allows even the lowest performer a shot at getting recognition and reward. (Nothing kills contest incentives more than if associates believe that they will never win.)
After all is said and done, the key is dollars per tan average – if that goes up, your profit will, as well. If you plan to offer commissions, use a straightforward formula that encourages your staff to sell. Once you show them that they’re in control of their paycheck, they’ll love the idea of selling. They also might stick around your tanning salon for a while. It’s like the old saying says, “Turn over your inventory, not your people.”
A Few More Things to Consider…
Because the topic of commissions is so intertwined with human resources management, I can’t help but to share these seven tips. They can help you improve relationships with your staff:
- Pay above minimum wage. This attracts a higher level of salon employee and holds you to higher standards in the way you treat employees. It also helps you retain those employees that you want to keep at your tanning salon.
- Improve your motivational skills. If you want to keep good employees, these skills can go a long way. Reinforce your staff’s efforts and achievements.
- Be the approachable boss. Remove the walls that keep your staff from sharing, learning, and being honest.
- Allow your staff to make mistakes. Everyone can learn more from their mistakes and failures than from successes. Invite failings and you’ll invite initiative, learning, and avoidance of similar mistakes in the future.
- Encourage your team to be creative. Don’t stomp on your staff’s ideas to better serve your tanners. That’s “ideacide,” and it’s the quickest way to kill morale. Some of the greatest business-building ideas can come from those on the frontlines!
- Encourage communication. This makes your staff feel engaged with your business and your goals. They’ll feel an ownership and want to do their best.
- Be consistent. Treat everyone equally and you will earn their respect, trust, and admiration.
Good Luck, and Thanks for Your Question!
I’m sure these tips will help you establish a successful commission structure in your tanning salon. If you have any other questions, don’t hesitate to ask this tanning salon business consultant.
