Sales Commissions: Using Staff Incentives to Boost Revenue

Written by Kelly Richardson

When staff members can tell customers a story about their first-hand experience with a product, they will be more confident in selling it.

Two decades ago, before the modern internet and mass retailing took over the beauty and skin care world, spas derived a large portion of their revenue from retail sales. As competition emerged, retail sales in spas have declined. This decline, coupled with the humdrum flat commissions that are paid to staff as a reward for sales, has moved retail products to an afterthought, as far as revenue goes. A solid retail mix, energized with a creative commission program for staff, can help to ignite year-round sales, increasing revenue.

There are a few reasons why staff may not want to sell products – the first being that no one wants to feel like a pushy salesperson and, of course, no one likes to be told no. Additionally, staff might not fully understand the benefits or features of the products that are retailed. Most spas offer a flat incentive program, consisting of an eight to ten percent commission on products, which, honestly, is not enough of an incentive for a staff member to spend any extra time or effort on sales. In order to have a solid retail program, it is crucial to sell staff on retail, so they can then sell to customers. There are a few reasons why staff may not want to sell products – the first being that no one wants to feel like a pushy salesperson and, of course, no one likes to be told no. Additionally, staff might not fully understand the benefits or features of the products that are retailed. Most spas offer a flat incentive program, consisting of an eight to ten percent commission on products, which, honestly, is not enough of an incentive for a staff member to spend any extra time or effort on sales. In order to have a solid retail program, it is crucial to sell staff on retail, so they can then sell to customers. 

MeetingDEVELOP A PROGRAM
If a spa has staff on a salary or hourly wage, look at developing a tiered program. A spa should aim for at least 20 percent or higher of its revenue to be from retail sales. It is important to meet this target – otherwise, the spa is leaving money on the table. The same percentage should apply to staff, as well. For example, if team members are contributing to $10,000 in cumulative business each month, $2,000 of it should be from retail sales. Set up a tiered program for commissions tied to the 20 percent target. If the staff is hitting the 20/80 ratio, then they should be rewarded with higher rates. Start by calculating sales to service ratios out for the last three months and see where the staff and the business landed. Use this number as the baseline. Do not be surprised if there are staff members that are not selling anything. Use the baseline as the lowest tier of commissionable rates and create a tiered program that goes up to 20 percent and above. Look at higher commissions and other rewards for hitting that 20 percent baseline and a larger group reward if the entire spa hits that baseline. If staff are station or room renters, create a sliding scale program that is based on the amount of their sales each month or the sales of specific products. 
CLEAR COMMUNICATION
Clearly communicate the terms of any commission or bonus program to the staff and put it in writing. Make sure that the details are concise and will not be misinterpreted. Ensure that staff understand when and how they will be paid on commissions. If a computer program is used to track sales and inventory in the spa, it may be useful to show staff how to find their sales numbers. If using the ratio benchmarks, teach staff how to do the math and calculate their sales. It is important that staff fully understand, as well as know, how much more money they can be taking home by increasing their sales. Create a space in the staff or break room to post information about the commission or bonus program and refresh it monthly with new program goals. Email it out to staff or place a copy of it in their paycheck. 
MAKE IT FUN
Create monthly incentives and prizes and encourage friendly competition between the staff. Pick a product or brand each month to be worth a bonus prize if certain numbers are sold. Make the program different each month. Always have a fresh mix of products and seek out accessory products from local artisans. There may even be creative staff members who can make products that can be incorporated into the spa. Continually rotate the product offering. Invite brand representatives for products that the spa retails to educate staff on the products. Set goals and incentives for monthly, quarterly, and annual sales. Work with staff to set personal goals and discuss these during monthly, quarterly, and annual reviews. 
GraphINVEST IN STAFF EDUCATION
When ordering new products, order one for each staff member and gift it to them to take home and use themselves. If there is a large retail mix, give staff members a product credit for themselves each month to pick out things to try. Initially, most spa owners may balk at the cost of doing this; however, it will be recouped with the additional product sales. When staff members can tell customers a story about their first-hand experience with a product, they will be more confident in selling it. Teach staff how to sell without selling and how to avoid the common sales crutches of “this smells good,” “it feels amazing,” or “it is only XX dollars.” A good salesperson will listen to their customers, find a need, and use a retail product as a solution for that need. For example, if a client is headed out on summer vacation, sunscreen and a hair serum that will help to avoid damage from the sun and salt water would be the perfect suggestion for them. If clients divulge their skin care concerns during a treatment, use relevant products and talk about them during the treatment. Show the client how they can be used to combat their skin concerns. Make sales as natural as possible. Nobody likes to be faced with a basket of products that were pre-selected for them to purchase. It is a waste of time to pull the products and can come across as a pushy sale. Teach staff how to educate clients during treatments. When faced with a regular client, make sure that the same products are not being used every time. Continually introduce new products.

SERVICES COMMISSION
If staff are paid hourly or on a salary, consider a portion of their services revenue as part of a commission program. Create add-on menus for them to generate more revenue and bonuses. As with retail product sales, do not create a situation where they are guaranteed a commission. The idea is for them to work for the commission, set and meet goals, and be genuinely vested in their financial success. Keep it fun, fresh, and rewarding. 
BE SELECTIVE WITH STAFF
While good spa staff is hard to find, it is important that everyone on the team be sales driven. Many spas set requirements for staff to be hitting retail sales targets within four to six months of employment for continued employment. Most businesses that are sales-driven, regardless of industry, consider weeding out 10 to 20 percent of their sales staff annually, to eliminate under performance. 
A good commission and sales program will need to be built and refined over time, but when fully implemented, will create a sustaining revenue stream for both the spa and team. As an additional bonus, the team will be motivated, energized, and look at sales as part of their personal business.

Kelly RichardsonAfter 10 years as a CEO and international expert in the sunless tanning industry, Kelly Richardson took what she loved the most from her time running Sonoma Tanning and developing B.Bronz Sunless and kept that close to her heart as she launched Venone Public Relations. Her work is now focused on helping others market and run their businesses. She has a personal passion for working with start-ups and supporting businesses that are in need of crisis communication support.

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