Last time we talked about creating a mission statement, and establishing a business and marketing plan to build a clientele. This week we’ll discuss your retention rate, as well as such basics as establishing a regular work schedule, setting goals, working as an employee versus renting a booth, obtaining insurance and a retirement account, and personal health.
Now that you have begun to create a customer base, focus on your retention rate. Your retention rate is measured by how many of your clients are returning clients. To figure your retention rate, count how many clients you saw during the week. How many of these were regular clients? Divide the number of regular clients you had by the total number you saw, and you will see what your percentage of retention is. For example, if you had 20 regular clients out of 30 total clients, you would have a retention rate of 67 % (20 / 30 = .67). If you re-book those 10 new clients, your retention rate will go up. The higher your retention rate is, the fuller your books are. The fuller your books are, the more money you make.
Try using a retention chart to help you keep track of whether you are gaining or losing clients. Have every new client fill out a customer consultation card with some basic information that will help you contact her throughout the year (birthday, anniversary, etc.). Offer a discount on slow days or use the punch card system. The punch card system is a reward or point system: Every time a client receives a service, she gets her card punched. After X number of punches, she can get a complimentary service or an upgrade to another more expensive service. The referral system also works well: For every new client that your existing clients refer to you, they receive a reward. This will encourage your customer base to grow. Actively strive to turn all of your new clients into regular ones. The key to retention is good customer service and a friendly attitude.
Be sure to create a regular work schedule and stay with it. What income are you trying to accomplish (weekly, monthly, annually)? Set a realistic income level that you would like to accomplish in one year, and increase it every year. Start by setting weekly or even daily goals. Remember, your success in the nail business is totally up to you. You can determine how much money you want to make, and make it happen. By following the retention rate chart, set a realistic goal and focus on increasing your weekly goal. Your weekly goal could be to increase your client retention rate by at least 5 % each week. As you increase your income, you must also increase your goals. Make any necessary changes that will get you to your ultimate goal.
It’s essential to find a good tax accountant, and if possible, talk to an attorney for free advice about creating a retirement account and buying life and health insurance. While you are making money, you must save some. Plan for any unforeseen situations like illness, and remember to give yourself a salary and pay yourself first. Save at least 20% of every dollar you make. Credit unions and banks are usually a good place to start. As a nail technician, you have choices: you can work as a salaried employee, as a booth renter, or on commission. You can even open your own salon if you can afford to. Research your options and seek professional advice.
And finally, take care of your physical health. Plan a vacation annually to prevent burnout. In order for you to work well you must be well. Stay healthy by eating well and exercising on a regular basis.
See you soon!
Royan Williams (www.chicagonailschools.com)
For free help and advice email: Royan.williams@ att.net
For more information on booth rental vs. being an employee, check out these past NAILS Magazine articles: