Do you feel like you were meant to have a kick-ass career as a hairstylist? Like you got into this industry to make big things happen? Maybe you’re struggling to build a solid base and want some stability. Maybe you know social media is important, but it feels like a waste of time because you weren’t seeing any results. Maybe you’ve already had some amazing success, but are craving more. Maybe you’re ready to truly enjoy the freedom and flexibility this industry has to offer. Cutting and coloring skills will only get you so far, but to build a lifelong career as a wealthy stylist, it takes business skills and a serious marketing strategy. When you’re ready to quit just working in your business and start working on it, join us here where we share real success stories from real stylists. I’m Britt Siva, social media and marketing strategist just for hairstylists, and this is the Thriving Stylist Podcast.
What is up and welcome back to the Thriving Stylist Podcast. I’m your host, Britt Siva. And this week we’re kind of taking a continuation from last week’s topic. So last week we were talking about why the systems and structures that still exist in most employee-based salons today are starting to really fail hard and fast. And what’s tricky is it’s landing to salon owners as stylists are the problem. Stylists don’t wanna work hard anymore. Everybody wants to be a dependent. Everybody wants freedom. Everybody thinks they can rent a booth. Everybody wants to be in a suite. It’s so not true. I got a DM yesterday from a stylist who’s been in a suite for three years and she was like, “I’m so lonely.This is not what I wanted at all. I was not in a good salon environment. The owner I was working for was burnt out and underpaying everybody and she was so financially stretched and it just wasn’t a positive environment and I had no choice but I had to leave and I hate being in a suite.
Hate it. ” The idea that every stylist doesn’t wanna be an employee is factually false. What stylists want out of an employee experience has simply changed. And there’s also the narrative of like, well, yeah, they just want more. They don’t want more, they want different. They want opportunity that actually lands like opportunity. The things that we accepted in this industry as normal 20 years ago just aren’t seen as normal anymore. People are more aware. The world is different. The economy’s different. The job landscape is different. Everything is just different. And it’s not that sitelists are bad. It’s not that salon owners are bad. Most salon owners innately are a wonderful people. They just don’t know what’s working anymore and so they’re desperate. And I get it. We have been coaching to this model of leadership for many years now. It’s working incredibly well. And I’m sharing parts and pieces of what now we know systematically works really, really well in salons at scale so that you might consider making some shifts and changes to your existing structure and format to something that is better for not just stylist retention, but profitability and revenue and morale and motivation and culture and all the things today.
Okay. So last week we talked about why most of the systems and structures that exist in employee-based salons are just not working anymore. There’s nothing wrong with the owner. There’s nothing wrong with the stylist. There’s something wrong with the system. And it’s time that we stop blaming the people and we start looking at the structure and say, “Hey, wait a minute, maybe the call’s coming from inside the house and there’s something wrong with my structure here. And if I just change that, things will get better. Let’s just consider that for a minute. If you listen to last week’s episode and you’re like, okay, maybe just maybe it’s time for a structural change. Great. Let’s talk a little bit about what that might look like. This week, we’re talking about the actual framework that I kind of teased last week. I said, if you’re running a system and structure like X, maybe consider Y.
Today we’re gona dig into why. We’re gonna talk about the KPIs that I briefly mentioned last week. We’re gonna talk about what your new growth map might actually look like. We’re gonna talk about bonus matrix that I coach to. We’re gonna talk a little bit about compensation and how we look at creating motivators that stylists are actually into that have nothing to do with money, but if they do the motivators, the money comes as the byproduct and everybody’s happy. We’re just gonna talk about looking at business from a different lens. And when we look at business from the lens I’m gonna coach you to, we start running our salon like every other business runs. And we stop saying salons are different, salons are special. And we start saying, what are the things that deeply successful multi-seven-figure businesses do that we should maybe just start to take seriously in our salon spaces and not look at our industry as so weird and so unique and something that just runs by the beat of its own drum and we just like run it like a real business.This, this kinda leans into that question here.
My hope is that by the end of this episode, you’re thinking differently about motivation and salon growth and stylist promotion so that you can increase your profits and you don’t have to drag your stylists up a hill to get them motivated. So we’re gonna talk about four different levers that salons have at their fingertips right this second that they can use to grow their team, retain their team, motivate their team. When I go into a salon today and do my initial evaluation, which is kind of like I pull back the curtain and I look at all the parts and pieces and, and what they’re calling their structure right now and how they’re coaching their team, usually all these four levers are mushed into one big, huge blob. It’s just like this giant pool of stuff and metrics and information. Split them apart. We’re gonna look at number one, KPIs.
I explained those last week as the floor. It’s the minimum sustained effort that we expect every single person in our building to live by. There can be different KPIs for different roles, but it’s do or do not, there is no try. You have to do the KPIs or you cannot work here any longer. Okay? Number two, we have growth maps. The growth maps are the ceiling. This is where you can earn a new title. You can earn additional benefits. You can grow your income. Th- this is true momentum forward, okay? There is financial attached to these growth maps too. But a lot of the growth map has to do with more the intrinsic value of staying at a salon long term. It’s not just about the money. Most salons are running promotional programs where it’s like, do more, make more, do more, make more, do more, make more.
A lot of humans today aren’t quite wired like that. And so with growth mapping, we can create additional opportunities beyond money that make people feel more pride and more loyalty and more valued beyond just make some more cash. Okay? So that’s growth maps. Number three is bonus structures. Bonus structures are the accelerant. It’s like fuel to the flame. Bonus structures are optional. Not all the salons I coach to do bonus structures. Some like it, some don’t. There’s some really cool benefits of bonus structures that cannot be understated. It’s not just about giving away more money. In fact, we don’t give away anything. But if you want your salon to grow fast, there’s some really interesting things we can do there. And then number four, we’re gonna talk about wage increases and commission increases. So when I talk to salons, like I said, KPIs, growth, wage, commission, and bonuses are all, like, all happening at once.
There’s five things we look at, and if those five things happening, then all these things are possible. That’s not how we look at it at all. When we coach in thriving leadership, we look at all of these things as different levers and different opportunities. And different stylists in our building are earning different things at different times based on their lifestyle goals, how they show up, what they’re even capable of, right? So we look at people as individuals and, and create opportunity that really fits their lifestyle. So let’s start with number one, the KPI bank. So I talked about last week, most salons, most salons have KPIs or key performance indicators. And most salons’ KPIs are a combination of average ticket, pre-booking, utilization, retention, sometimes retail sales, sometimes service sales, handful of different things. But every single month or every quarter, the salon is looking at these things.
They’re like, “All right, did you hit them? Did you not? You didn’t? Okay, try better next time. Y did. Okay, great. You get a price incase. Maybe you get a commission increase, maybe you get a new job title, whatever. Usually, when I say KPIs, that’s what the salon hands me, is something that looks a little bit like that. These are the things we’re expecting our stylists to hit every single month or every single quarter. Now, when we look at KPIs, meaning key performance indicators, remember, this is the floor. So it’s do or do not, there is no try. If a stylist is not doing these things, they cannot work in our building anymore. So they’re non-negotiables and you have to hold yourself accountable to them just as much as your stylist team does. It means if somebody’s not doing these things, you can’t be like, “But they’re such a nice person.” These are the minimum requirements for working in your building as any given role.
In this example, we’re talking about stylist. But if we were, if we were hiring a manager, they would have KPIs too and it’s do or do not, there is no try. I have 100% fired people for not hitting KPIs and it sucks. I have fired people that I really cared about for not hitting KPIs, but that’s what makes this a business, not a Girl Scout troop, right? So some of the KPIs that some of these salons I coach to are new guest retention. So new guest retention is not something that in our coaching program we look at if we’re considering someone for more commission or less commission or a price increase or not. We don’t look at new guest retention. But maybe in your salon, you’re like, “Listen, you’re eligible for a price increase, but you’re not retaining a single new guest. I cannot have somebody in the building who I’m feeding new clients to and then they’re losing all of them.
For any money you’re producing in service revenue, I’m, I’m losing on you because I’m spending on marketing and you’re, you’re letting clients leave and never come back. Like there’s something intrinsically wrong with what’s happening in your chair clearly because we’re not retaining anybody. If we cannot improve this retention, unfortunately, I cannot have you in the building. That would be fair. It’s also something that most salon owners are currently not doing. Now for you, you might not be like, ” Well, new guest retention doesn’t matter for me. “That’s fine. You could also look at base clientele retention. You can look at utilization. Um, I was coaching a salon owner earlier this year who has some long-term stylists. Like if you listen to last week’s podcast episode, it was like stylist number one. Like has been around for a long time. And these are a lot of stylists who like once were really heavy producers, but there may be a deeper into their career and just aren’t as motivated and they’re at like 60, 70% utilization.
Like their schedule is gay 30 or 40% of the time. And I go to these salon owners and like, “Okay, what are we gonna do here?” And they’re like, “Well, we, they’ve been here a long time, so we kinda just let it ride.” Yeah, but see, that doesn’t work. That’s extremely expensive to the business. So when we have somebody who’s operating at low utilization, what we say is we’ve got a couple options here. We can find a way to fill your books so that we can get you up to our 85% benchmark or whatever utilization benchmark is, or we shift you to a part-time schedule so that you are innately at 85% utilization, which sounds more apealing to you, but it’s not an option to just be a 60% utilized stylist. Do you see what I’m saying? So KPIs are, this is how we do it here.
If you do not want to do it like this, we’re not the right salon for you. So these things would not be the same as price increased things or commission increased things. This is just how the salon operates. So there’s lots of different things we can look at. You can look at service revenue. I have some salons I coach that say you have to have at minimum 10% increase in your service revenue year over year. Have to do it. Some say 15%, right? When you look at some of the fastest growing, most driven salon teams today, they have KPI metrics like that. So it’s not just do your best to your retail sales percentage. We’re looking at very different things, right? Now not all the KPIs, uh, for the salons I coach are related to service revenue or guests like that at all. Some salons have KPIs around education attendance.
Some salons have KPIs around social media activity. There’s all different kind of things that you can put a KPI on. In our Thriving Leadership KPI bank, I think we have about 30 that you can choose from. So what you would do, and our coaches can help you do this too, is we go through and we say, okay, what literally makes sense for your salon as it stands right now, as it stands today? How are you showing up for your team? What is the clientele you provide for your team look like? What is the average utilization? What does the average demand look like? You know, what are the behaviors that we need to see so that we, the salon, can achieve our goals? Okay? That becomes the KPIs, the floor, the do or do nots, there is no tries. Okay? Now, if you had other positions in the building, let’s say you had social media manager or a salon manager or an employee trainer, something like that.
They would have their own KPIs, but no one’s allowed to just kind of hang out in the building. Stylists who just hang out in the building often operate at a loss and are a huge part of why the salon can’t turn profit. Profit point is something that we talk about a lot in thriving leadership. It’s this number that a lot of salons have never even identified for themselves. And so you look at a stylist who on paper, you’re like, “Well, they break even, you know? Um, they do so much in services and we pay them so much a month and there’s a little bit leftover.” What you’re looking at is a little bit leftover is often not the actual truth. And then you wonder why you’re not turning a profit margin because you’re not looking at the total cost of having that person in the building.
And so what we do is we analyze everybody in the building and we say, “Okay, what is the profit point here? And what are the things that need to happen so that everybody is putting us into the green, not the, the black, not the red, so that we can actually increase the profit margin here and grow forward, okay? Then we have the growth maps. So this is beyond the KPIs. So the, if the KPIs are the floor, the growth maps are the ceiling. Now, this is how we motivate stylists forward in a way that doesn’t have anything to do with money. We’ll talk about the money part in a minute. So growth maps lean into what traditional businesses call vertical growth and horizontal growth. So I want you to think about something that looks vertical and something that looks horizontal. So horizontal is left to right.
Vertical is up and down. There’s two different types of promotions in any given company. So when we think of vertical growth, traditional vertical growth would be like in a grocery store, you start off as the stock person, like you’re just stocking the shelves. And then you become the bagger and then you become the cashier and then you become the day shift manager and then you become the store manager and then you become a district manager. That’s very vertical growth in a different industry, right? So you start off as the low person on the totem pole and then, and then you grow. So in our industry, it can be like assistant to stylist, whatever you wanna call them, stylists, and then they become senior stylists and then they become, you know, educator or whatever. We look at doing that a little bit differently. And instead of putting stylists into things like levels, we actually give them real roles like you would in a real business.
The only other industry I can think of that uses like a level system is sometimes there’s like level one engineers or I see sometimes in colleges they’ll hire like level two professors. It’s actually not very common anymore. 20 or 30 years ago, you used to see it more often. It doesn’t happen a lot. Sometimes in hospitals they’ll have like level two medical techs. But e – but even now, most industries and most businesses are shifted to like a true job title sort of a system. I want you to imagine one of your stylists going to a dinner party and, um, or maybe like a, a function with a bunch of their friends and somebody says, “You know, what is it that you do? Do you think they say I’m a level four hairstylist? Or do you think they just say I’m a hairstylist because nobody really knows what level four means?” And then they’re talking to somebody who’s like, “Oh my gosh, that’s amazing.
I’m the COO of my company.” And part of why saying I’m a hairstylist has this connotation of small is because when you say level four stylist, it doesn’t mean anything. There’s no context to it. Versus imagine saying, “I’m the lead specialist for one of the premier salons in the area.” That sounds kind of incredible. And so we look at, okay, what are the things we can do? What are the opportunities we can provide that really have that intrinsic value, that pride, that I’ve earned something that our industry deserves and, and the stylists who are working for us deserve? And as we look at the difference between vertical and horizontal growth, when we look at horizontal growth, somebody could keep the title of stylist, but add on the horizontal opportunity of educator. Or they ad on additional opportunities like more schedule control or more wellness perks or education perks.
There’s all different ways that we can promote somebody that don’t have anything to do with cash. The reason why we look at a method like a growth map and we look at both vertical and horizontal growth is something that I’ve learned is not all stylists make good teachers or educators or mentors. And when I go to a salon and they’re like, “Well, all of our, you know, mentee level stylists or all of our level three stylists also teach,” I’m like, “That’s a shame because first of all, not everybody’s good at it. Some people hate it. And some people are, are generally like doing harm when they’re teaching. Like just, it’s just not for everybody. There’s a lot of things that are not for everybody. And so expecting everybody who’s great at formulation or everybody who’s great at cutting to be an effective teacher or mentor is a little bit naive.
And I, and I think that there was a time where we did it like that because there was no other choice versus you might have somebody who’s a little bit more green, who’s an amazing mentor and is more relatable to some of these people. And so, and we look at the different ways that we can really find everybody in the building, see them for who they are, and give them opportunities to support the company in a way that makes the most sense. Then we look at bonus structures. There are bonus structures that exist in a lot of salons today. Uh, this is totally not a new concept. What’s new is the way that we bonus stylists in thriving leadership for those who choose to do it. So a lot of times when I see salon bonus structures, it’s like based on role or based on tenure.
So, you know, our senior stylists are eligible for like a 1% profit share and our regular stylists are eligible for whatever. It’s almost like based on title or based on tenure, you’re able to get a profit share bonus based on either what the salon does or what the stylist does individually. That goes back to what we talked about last week where it’s like whoever’s been here the longest, the top dog who makes the most cash gets the most stuff and they’ll always be the winner. And it doesn’t, it really doesn’t produce a great culture. You want to be rewarding those who work the hardest, are the most driven, show the most promise, are the most dedicated. Like those are the people who really should be earning the extra. And your most senior person might be happy working two days a week, not getting any kind of bonus because they’re able to do all the field trips and they’re mostly home with their kids and they’re super happy camper.
They might not need all the extra cash versus your super driven, hungry person who’s bleeding out for your business would like to be recognized for that and they should be. So what we do is we, we create a bonus matrix. We show you how to do this in Thriving Leadership. And it is based on performance. So it’s not to say that like the newest stylist on your team is gonna earn a bigger bonus than your top performer. No, not necessarily. Like depending on what they do maybe, but what we do is we bonus based on rapid growth percentage so the person who’s growing the fastest producing the most has the greatest opportunity. So for those of you who are like, ugh, I just wish I would get people motivated to do social media. I wish I could get people motivated to fill their chair. You wish or you have a system that actually rewards them for doing it?
And if your reward is, well, if they wanna get to the next jump, they better… That’s, that’s almost like a backhanded like punishment. Like, well, if you don’t do it, then this is the repercussion, or you know, the potential is in their hand. I want you to… If, if anybody in this room has kids, I want you to think about if you’ve ever created like a, a motivation system. Like, well, if you get all As for the quarter… I, I remember when I was a kid, my parents never did this, but I remember I had friends whose parents did this. My parents were not checked in. But I had a lot of friends whose parents were like, “If you get all A’s, or you get 20 bucks for every A you get on your report card,” which 20 bucks in, like, 1999 was a big deal.
But i- if you get however many good grades you get, this is your reward. And so every quarter, they get rewarded for whatever grades that they got. When I try and do that for my kids now, if I’m like, “Try really hard for, you know, a year and if it all goes well, I’m gonna give you something,” they lose interest in that so quickly. Versus if I give them a short-term target and I’m like, “Listen, if you can do this for seven days, then on day number eight, I’m gonna give you this other thing.” They’ll do it. They’ll pull it off. As human beings, we find it really difficult to stay motivated working towards something that we are barely chipping away at for a year or 18 months or two years. So when you have stylists in your building who have been looking towards that next price increase, looking towards that next commission increase, and it’s just like they c – they show up, they work, and it, it’s like it, they’d have to make another $2,000 to get anywhere.
It’s just, it doesn’t feel attainable. So their interest in doing it is low. And then you’re sitting there and you’re like, “Why don’t they wanna work any harder?” ‘Cause it just doesn’t feel worth it. Like, the prize at the end doesn’t feel worth it. The effort that has to go in to make that happen feels way too big and way too heavy. And what we do is we break things down into, like, micro wins. When there’s micro wins in place, you would be amazed at how people lock in and get really excited and find the energy and interest in learning how to work their way through your system. Then we, of course, have our compensation and our price increases. Now, I talked about this last week, and I’ve actually talked about it in the podcast a bunch of times. We don’t lump compensation increases and price increases together.
I don’t know how that became an industry norm. I think it was because there was this unspoken fragility that was built into kind of, like, the very common structures that we see in employee-based salons today where if the salon owner doesn’t raise the price for the stylist, they can’t afford to give more commission. I think. I, I truly don’t know the logic behind it because we have our system with totally separate metrics for price increases and commission increases. I’ve had it looked at by tons of financial advisors, probably 300, 400 different financial advisors have look at what we coach to amongst all the salons that we coach. And it, they’re like, “This makes more sense. Like, why don’t more salons do it like this? ” And I’m like, “I don’t know. It’s all just based on profitability. It, it’s not, like, more complicated than that.
It’s based on client demand, what the market is asking for, what your stylist can pull off. And then we pay what we can afford based on the profit margin that we build in. And with that profit margin we built in and the structure that we do, we can offer uncapped commissions to everybody on your team. There’s no reason not to. The reason why capped commissions have to happen is because of what we talked about last week’s episode. Most salons have this structure where they end up being mid-performing stylist heavy. And they’re super reliant on top performers to pay all the bills because they’ve got these low performers who are operating at a loss. And these mid-performers who on paper look like they’re doing decent. These are gonna be your stylists who are doing 5,000, 6,000, 7,000, $8,000 a month. They’re not bad stylists. Like, that’s some real money.
However, when you have the old salon model that was very common, you needed, like, the really heavy six-figure stylist deep into the six figures to pull off the model. And then you need those people selling retail because you need that additional cashflow. There were so many contingencies. And if one of those pieces failed, the whole model starts to crumble. With ours, it doesn’t look like that. We look at every stylist chair as a profit center. We look at the profitability of the salon first, and then we build everything around it, and we create these growth maps and these incentive opportunities that just feel like good business. They feel motivating, they’re exciting, they’re easy to coach to. And it’s really incredible how quickly the growth comes. You can always learn more about our methods and what we coach to at thrivingstylist.com. You can hit me up in the DMs @brittseva.
If you’re listening to this in real time, we have some amazing free masterclasses that we’re also offering coming up in the next couple of weeks. You can head to thrivingstylist.com/salonblueprint to learn more. As I always say, so much love. Happy business building. I’ll see you on the next one.
