Nicolay Kreidler on "Creating a Training Budget"
One of the most common reactions we find to under-performing products and services in the spa industry and even with individual therapists is the tendency of staff (and management) as well as individuals to rather sweep them under the table than deal with the fact, thus starting a vicious cycle of not even offering what doesn't seem to fly with the clientele and in the end seeing it disappear from the shelf and the menu altogether.
The list of common excuses seldom considers or mentions reasons within the operational structure itself although this is always the best place to start. Contrary to the belief that a product or service is "no good" or "not what people want", the explanation for particular services not being sold or certain products not moving at the desired pace, usually has a cause within the operation itself:
- Staff not understanding the product or service in question.
- Not having the ability to convey service and product benefits to the client.
- Minimal training on how to provide the service as originally intended
- No knowledge on how to sell the service and/or product successfully
- Not having a scripted sales strategy involving all staff members
Granted, in some cases there might be products and services that absolutely are a dead weight, but this is rarely the case. When you start seeing a progression of falling sales of any particular item, your first step is to ask yourself: "Is this item being performed and promoted the way it should be- especially if this product or service was once doing much better.
It turns out that in nearly every case professional training can revitalize and refocus the efforts and substantially improve results - whether this is a professional trainer engaged in-house or an off-site training to which staff members travel.
Most seem to turn a blind eye to the fact that:
- Most people employed to work in a spa from the front desk to the service provider have NEVER been thoroughly trained in the art of sales. They simply do not know how.
- Service providers have NEVER been previously trained in the unique treatments and rituals offered at your spa.
Here are some of the common misunderstandings and misconceptions of owners, principles and providers:
• When introducing new services providers will just need to watch the instructional video that comes along with the kit and it will be a success from there on forward.
• When bringing on new staff, our providers will learn how procedures are done from other therapists and there is no need for formal training aside from "running them through" the protocols.
• Therapists need to finish in time so it's ok to shorten the protocol and we can save some products that way.
• We are out of a certain product; we can just skip that step or substitute something else.
• Training only needs to be done once. Employees should remember.
Owners and principles often do not realize that sales and marketing is a task that does not end with a single activity or measure. Once they notice sinking sales it is already far down the line and counter measures have to be substantial to offset the damage already done.
The key to avoiding this in the first place is twofold:
- Develop training statutes and a training plan for the year
- Monitor sales carefully and immediately counteract developments proactively.
Creating a training budget.
Training is not free. Whether you receive training from a vendor or hire an independent trainer, you will pay for the service either through the products you buy or directly to the trainer. Vendor training is great for product knowledge and companies employ very competent trainers that will come to you. Taking time to define your goals with a trainer and making sure the level of proficiency suits your needs is essential for achieving results. But you only control the process with a vendor to a certain degree. Finding trainers that will specifically address your issues independent of product are an excellent and much needed investment. Each area needs a slightly different twist on tools and information to do their job. While an esthetician is expected to deliver in-depth knowledge on products, a receptionist might be more in need of tools on how to close a sale.
While you can certainly budget by way of defining a percentage of your overall expenses for training, I prefer to look at it from a performance perspective.
Let us say your current retail percentage lies at 10% of the revenue you generate with services. If you hire a trainer to teach your staff sales techniques and help you develop scripts for the process your retail sales might go up to 18% for the next month or two and then normalize at 15%. If you have service revenue of $25,000 you are currently making $2,500 in retail sales. After training you'll make $4,500 per month for 2 months and $3,750 per month thereafter. Under common circumstances of 50% purchase cost and 10% sales commission your gross profit over 6 months would be $9,600!
At $25,000 service sales, every additional percent you make on retail gets you $100 a month more in gross retail profit.
Let's do the math for spa treatments:
Let us say your spa treatments are only at 10% of your total service revenue. You hire a trainer to revisit the protocols, procedures and benefits while training your staff to sell these treatments. Let's say that because of the revitalization of these services you sell an average of 1.5 treatments more a day to clients that would have not otherwise have booked a treatment. At $100 a service that's an additional revenue $3,150 a month based on a 21-day month. If you pay your provider 40% commission and deduct $5 a treatment for product cost that's still $1,700 per month more. Over 6 months that's more then $10,000. Do you want it or not, is the question.
Now who still says it's not worth paying a good trainer or sending staff to continuing education for that kind of profit?
For a table showing different models click here: 
You can reach Nicolay at iSpad or Spa College for more details and/or contact him directly at: nicolay@ispad.net or nicolay@spa-college.com