How are your KPIs?
Posted on May 10, 2010 by SalonBiz
Key Performance Indicators (KPI) give salons and spas an excellent opportunity to identify and target specific areas for growth in their businesses. KPIs help you see where you stand today and what you can improve to be where you want in the future.
What are KPIs?
Key Performance Indicators (KPI) are quantifiable measurements that reflect the success factor of a business or organization.
A company uses KPIs to compare performance in terms of meeting their strategic and operational goals. Therefore, KPIs act as a measure of progress towards these goals.
KPIs differ per organization, could be a customer loyalty metric for some businesses, number of subscriptions or net revenue for others. Different factors maybe used across industries to measure KPI.
Your KPIs
It is necessary for any organization to identify their KPIs in order to effectively work towards a goal. Here are some general steps to identify your KPIs:
- Set your goals – your goals should be SMART, which means, Specific, Measurable, Achievable, Realistic and Time-limited.
- Identify the KPIs – once you have identified your goals, is time to identify the metrics for those goals. KPIs should be acceptable, understood, meaningful and measurable. They should be defined in a way that non-controllable factors or individuals could not hamper their fulfillment. Actions that affect the KPI should be fairly obvious.
- Report Progress – once you have your KPI, you need to find a way to report it and analyze it. Set the periodicity for your reports, daily, weekly, monthly and be aware of seasonal effects. Spikes or drops in some KPIs might be a consequence of seasonal dates.
- Plan and Take Action – if any of your KPIs is underperforming you must plan improvements and take action. Set strategies to address the problem and reach your goals.
KPIs for the Salon Spa Industry
Here are a few KPIs that you should know:
SPST
RPCT
Percentage of retail per service ticket
Percentage of retail tickets without services
Percentage of hair color services
Average days between clients’ appointments
Retained customers
Inventory turnaround
Customer referrals
If you have any question about how SalonBiz and SpaBiz can help you measure your KPIs, give us a call, will be glad to help you.
Which KPIs are more important for you? Leave us a comment and tell us.
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Tags: Key Performance Indicators, Reports, Salon Metrics
Filed Under: Grow your Business
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