Small Business Center
By Neil Ducoff, Strategies
The following was a question posted in the Strategies’ Salon & Spa Business Idea Exchange Facebook group.
Retail Commission? We are having some retail commission issues. Who should get retail commission on walk-in sales? Should the person who had to step away from their guest to ring up the sale get it, or does it go to “the house”? Now, if a stylist must educate the client on what to buy, then he/she gets the commission. But what about the walk-ins that know what they want and only need the sale rung up? Thanks in advance.
Some of the responses:
As you can see, the answers are all over the place. For an industry that is so dependent on professional products, the secret code to get professional service providers to “sell” has yet to be broken. Even with the advancement and sophistication of salon and spa retail space, service provider engagement in retail selling is disappointing at best and frustratingly indifferent at worse.
Salon and spa software can track every service sold by an individual, but retail is not a service. Very often, retail recommendations are closed at check out. Very often, guest services sell additional products. Very often, the client buys products that weren’t recommended. Just because a service provider delivered the service doesn’t mean he or she created the entire retail sale. Who gets the credit for the retail sale is complicated when one or more service providers and guest services staff are involved. The who-gets-the-credit-for-the-retail-commission quagmire almost always creates more hurt feelings, infighting and indifference.
Commission is not team. Retail commission, just like commission on services, is an I/me/mine pay method that creates behaviors that conflict with teamwork. For example, a stylist that never does retail recommendations sends a client to check out. At checkout, a guest services staffer recommends and sells the client a product. The stylist learns of the sale and starts complaining that she didn’t get the retail commission because that was her client. The guest services employee can’t believe it and decides then and there that it’s not worth bothering with retail if the stylist gets the credit no matter what.
Retail commission makes retail optional. How long have you been saying to your employees, “Gotta get your retail numbers up”? How long have you been handing paychecks to employees that put zero effort into recommending and selling retail? How often have you wondered if your beautiful and fully stocked retail area is invisible to your employees? The simple truth about retail commission is that it makes selling retail optional. If a service provider sells retail, they make some extra money. If they don’t, they don’t, and clearly, the majority of service providers are OK with that. Some salons and spas play a little harder with rules like “If you don’t sell at least 10% of your service sales in retail, you won’t get any retail commission.” Guess what? Too many are OK with that, too, because they weren’t selling retail to begin with.
Professional product retailing in salons and spas will always be a team sport. Why? Because success in professional product retailing is about the professional recommendation and a proper closing process at checkout. For some strange reason, retailing became about the retail commission as the primary motivator. It’s not.
Under its Team-Based Pay business model, Strategies recommends both a requirement and an expectation. Why? Because pay is based on overall performance, not a commission on service and retail sales. In this model, there is no retail commission. Professional recommendations and retail sales are performance requirements. No retail recommendations: no raise. No more paying top dollar in exchange for retail indifference.
The imediate reaction from owners sounds like: “But they won’t be motivated to sell retail.” Strategies’ response is: “They never were and opted out.” In 28 years of teaching and coaching Team-Based Pay, we’ve seen thousands of salons and spas doing 15 to 25% and more of total revenue in retail without any retail commission. The focus is on the consistent delivery of the professional recommendation. No compromise!
Retail commission motivates very few, and who-gets-the-credit thinking compromises teamwork. More important, retail commission diverts the focus away from the true retail driver, the professional recommendation.
Here’s my challenge to you: Take a brutally objective look at your company’s approach to retailing professional products. Evaluate how the who-gets-the-credit thinking is compromising retail sales at the front desk. Last, shift your thinking, systems and focus on perfecting the delivery of the professional recommendation to each client. Your goal is to have every client receive a verbal and written professional recommendation.
And for the sake of teamwork and respect, get your front desk/guest services team into the retail game with a fair share of team bonus or at the least team retail bonus.
This article was originally published at www.strategies.com.