Increase Profit by Booking Appointments Wisely
May 4, 2016
For many salons and spas, the appointment book is taken for granted and little thought is given to its influence on the business’s revenue and profitability. In order to optimize the calendar and to ultimately maximize profit, think about appointment scheduling as a puzzle and work to fill every slot!
While it does not actually cost you anything when a chair sits empty (you will have to pay your rent and employees regardless), you are losing out on potential income. Imagine that a salon has six stylists and each one has two 15-minute gaps every day. It may not sound like much, but over a 5-day work week, the business has 15 hours of empty time slots. If the salon charges an average of $40 per hour of service, they will miss out on $31,200 of revenue each year.
To reduce the frequency of gaps, train your salon receptionist or coordinator to offer specific times rather than windows. Suggest times immediately before or after other appointments or allow enough time in between appointments to book another service. In addition to optimizing your calendar, it will help create an impression that your business in great demand.
Due to the varying lengths of appointments, there will realistically be some gaps in your calendar from time to time. Don’t hesitate to contact clients and see if they can come a little earlier or later (depending on the nature of your gap). Ideally, you will end up with a longer opening which you can then attempt to fill with another client.
Take Advantage of Remaining Gaps
Unfortunately, not all gaps can be prevented or eliminated. However, you can still try to make the most of them. Take this as an opportunity to upsell your services.
“We can strengthen your hair by adding a deep conditioning treatment today. Can you spare a few extra minutes?”
“I have an extra 15 minutes, would you be interested in a scalp massage for half price?”
Although you may not want to discount last-minute openings or add-on services, it is preferable to having an empty slot. In the case of add-ons, you can even think about it as a promotional activity. If clients try the service for the first time and see its value, they may request it in the future and pay full price for it!
Each salon chair represents potential revenue. For both appointment-based and walk-in businesses, the most limiting resources are your workstations (e.g. salon chair, tanning bed, manicure station, massage table). If every station is occupied, there is no financial benefit to adding more staff. On the other hand, if all your employees are busy but there are a couple empty chairs, you can hire more service providers. With that in mind, your goal shouldn’t be to just book up every stylist but to fill each chair throughout the day.
The best way to achieve this is to better structure employee schedules. Many salons provide employees with the flexibility to set their own schedules; however, this can cause your business to miss out on potential revenue. If your salon is open from 10 am to 8 pm and a stylist works from 11 am to 6 pm, you are losing three hours of productivity from that workstation as it probably would not make sense to have someone else work the remaining hours. By having employees either start when the salon opens or finish when the business closes, you have the ability to create more revenue from each chair with part-time staff. You may be able to hire a mom who wants to work for a few hours while her kids are in school or a student who is interested in working a few evenings each week. Using similar numbers as before (6 chairs, $40 per hour of service), adding three hours of productivity to each chair every day will result in $187,200 of extra revenue annually.
Of course, there are some other considerations. Especially for growing salons, there may be times of the day or days of the week when it will be quieter and it would not be cost-effective to employ a stylist for each chair. Run a report with your management software program to determine the level of employee utilization to see what makes the most sense for your salon or spa.
As an appointment scheduling software, Insight will help you stay organized and optimize your calendar! Book services in seconds and drag and drop them if you need to reschedule. Remember to block off the proper appointment lengths by leaving a note in the client’s profile. Offer customers the convenience of online appointment booking, and reduce no shows with automated email and SMS reminders. Run reports to analyze and grow your business. View schedules, book new appointments, and modify customer details on the go by using the Insight Mobile App. To learn more, give us a call at 1-888-919-5841.