Spa Benchmarking

Wouldn’t you like to know?


Salon and Spa owners have often joked with me over the years about me giving them their competitor’s data. This is usually said with a big smile and a laugh afterwards, but I often wonder what they would do if I said, okay, I’ll get it for you… I think that they would actually take it!

On the other hand I have had many owners threaten about the consequences of their data being shared with anyone else as if it contained secrets that if revealed could lead to the end of the world as we know it.

And then, oddly enough, you get some owners (usually the most successful) that have no problem at all about sharing their data with others in the industry. In fact they willingly offer up their secrets to success in order to uplift their industry.

However, regardless of how owners feel about the privacy of their own data the question that I get asked the most is “What do other salons/spa’s do?”

This question is asked about many different areas of running a salon or spa, it could be salaries, stock control, security, client management, or any of the other many processes involved. And the answers that owners want are the specific details rather than the principles or theories that may govern a certain matter. They want to know what their competitors are doing so that they can ascertain if they are doing it right themselves because if someone else has a tried and tested way of doing something then they don’t want to waste time trying to figure it out for themselves, they want to know what works.

This is why spa consultants are often in a position to advise spa owners because their advice is based on their previous experience working at or with other spas and they can literally say “this is what we did at this spa” or “this is what most of the other spas I’ve worked with did”.

We therefore sit with a situation where salon and spa owners are, on one hand, desperate to know what other people in the industry are doing and, on the other hand, are reluctant for anyone to know what they are doing.

What do you measure against?

Generally, business owners want to know if they are doing okay. One way to measure this could be to check your bank balance but this will not really give you perspective on whether you could be performing any better or worse than what you are. So, the real question then is what should you be comparing against when deciding how well you are performing?

Let’s use an example from the world of athletics. Usain Bolt, the world’s fastest man over 100 meters, won the 2008 Olympic finals (amongst other titles). On that day he was able to measure himself against the other competitors in the race and he was found to be the best. He was able to compare himself to his own previous performances and he bettered his previous best. He was also able to measure against the world record and Olympic record and he was able to beat those as well. Therefore, in three different aspects (his immediate competition, himself, and the global standards) he was measured as the best.

Measuring your business is similar. In one sense you are competing with others immediately around you, ie other spas in your neighborhood. You are also measuring yourself against your own previous performance, ie this year compared to last year, or this month compared to last month. And finally you are comparing yourself against the industry as a whole, ie what are the general standards or benchmarks and is the industry getting better or worse.

Benchmarking against yourself and your own previous performances tells you if you are going backwards or forwards and you will be able to get every detail on which areas have improved or worsened because they are all measurable from within your business.

Measuring against your immediate competition will be more difficult but achievable to a certain degree. For example, if you find out that your clients are leaving your business and going to your competitors or if your competitor is opening more branches or expanding existing branches then the chances are that they are doing well. Conversely if competitors are always losing staff or their retail shelves are poorly stocked then these are indicators that they may not be doing too well.

Measuring against the industry is the most difficult because you will most likely never encounter the majority of other spas that make up the industry because they will be located all over the city, country or world making it practically impossible to know how well they are performing. To gage how well the industry is doing as a whole you would need to rely on whatever random information is available on a bigger scale, like how well suppliers are doing, or trade schools or even trade shows.

Each of these benchmarks (self, competitors and industry) are important for different reasons and at different levels may be linked to each other. If you are performing worse than what you performed in the past then either you are doing something differently or your competitors are doing something differently or there is something that is affecting the entire industry that is causing your business to perform negatively. Either way, it all ends up affecting you in the end and therefore the more you know the better equipped you are to respond appropriately.