The ONE Statistic That Could Drive ALL Important Business Decisions

October 11, 2016 Brigham Dallas

If you are a CEO and anything like me, you are probably slightly neurotic about checking stats. I checked them everyday: bank accounts, salon dashboards, QuickBooks. I am embarrassed to confess this, but I have even been known to check stats on a date (and she thought that bathroom break was a little long for other reasons).  So as I write this article, please understand that for a guy as neurotic as I am about stats to say that there is one number more important than any other, this better be a pretty damn important stat!

In my business, I have one number that drives all of our training workshops, our hiring and firing, how much money I put into marketing for each salon location, what type of marketing I do and the message that I use in the marketing, and it also drives the growth of all of our business. I would venture to say that after applying the principles that I am about to teach you, your growth rate could double in the next year.

The metric is called the net promoter score (NPS). Frederick offers this service in it’s reporting packages, so simply turn it on to start taking advantage of it’s benefits.  NPS is a simple one-question survey that looks like this:

Don’t be fooled by the simplicity of the survey. Harvard and consulting firms have done numerous studies that link the results of the survey to the growth of the business. Businesses with higher scores (promoters) had on average double the growth of businesses with low promoter scores (detractors). Take a look at a couple of growth percentages from a few industries below.  This chart comes from the Harvard Business Review:

A Little About My Business:

Sugar Me Wax is a Brazilian wax and Brazilian sugar salon located in Phoenix, Arizona. We started 16 months ago and have had explosive growth. We have three locations and I plan on building two more in the next year. Our business model works because we put the customer needs first and with the net promoter score, we have the tool necessary to know how to help each customer.  

I’m going to explain exactly how I use this powerful tool to grow my business faster than any other Brazilian wax salon in Phoenix:

Marketing:

After a customer fills out the survey, one other question pops up asking the client: “Why did you give Sugar Me Wax a [#] score?” The question is open-ended and people can put whatever they want in. After running the net promoter score and reviewing a couple hundred responses, I noticed a trend among the responses: whenever people had a positive experience, the most common word used was “comfortable.” 

We would hear things like: “the aesthetician made me feel comfortable”, “the salon was very welcoming”, and “the girl at the front desk always greets me by name.”  Brazilian waxes are very exposing. Your lady bits are seen by a complete stranger! So you can imagine that when a client walks into the salon, if she does not feel comfortable then she will never be coming back.

You’re probably reading this and thinking ‘well duh that seems pretty obvious’.  I however had no clue about this as I am not a female nor would I ever get a Brazilian wax unless someone held a gun to my head and said ‘get on the table, you’re getting waxed.’  And even then, I’d still probably hesitate and have to evaluate about my options more! 

Even if this insight was obvious to you, I’m willing to bet that unless you received the NPS feedback with dozens of people repeating the same sentiment of comfort, you probably would not have had any clue as to HOW important feeling comfortable was to the client or that it was the MOST important thing to the customer. 

Apply this principle to your business: when you get promoter feedback, try to identify common words or trends that clients are saying to describe their experience… Then strengthen your marketing to reflect your newly learned insights!

Creating a brand that helps our customers feel comfortable has been my primary objective for the past year. In fact, all of our marketing centers around this idea:  we use bigger women in our advertisements, our text messages are personalized, the content on our website refers affectionately to our aestheticians as sugar mamas, and the first thing you see you when you walk into the salon is a big sign that says:  “Hello Gorgeous!”

Detractor Feedback:

Not all of our feedback is positive.  About one in 15 clients that come in will have either passive or detractor feedback.  I believe that our system of dealing with this feedback is what makes us successful. As soon as somebody gives us detractor feedback, I receive an email notification. Our lead aesthetician will then text and email the client asking for more information and to schedule a follow-up appointment with her for free.  Our quick response does two things: it salvages a client they would have went somewhere else and it deals with the problem before the client tries to seek retribution by damaging our reputation on Yelp or Google. 

Apply this to your business:  Handle your dirty laundry quickly and in private before it goes public.

Hiring & Firing:

Every month we review employee NPS scores with each of our aestheticians.  I once interviewed a girl that worked at European wax who said that she was fired because for three months in a row she did not meet the cash quota that was set for her. The last month she was $200 short and the manager asked her to pay the $200 in order to keep her job.  This mentality is so backwards that it astonishes me.

Revenue is the product of good service.  If your goals are based off of money, your employees will be pushy and consequently loyalty will not be established because the client cannot trust you.

On the other hand, if your promotions and employee evaluations are based off of client feedback of the employee, your employee will be motivated to do a good job and the client will be motivated to come back because she feels a sense of loyalty to the employee who took the time to care.  

The ONLY metric we use to determine the success of an aesthetician is the Net Promoter Score.  High scores are praised in our monthly evaluations and low scores and detractor feedback are dealt with immediately by our lead aesthetician.  This is far more effective in creating a strong brand identity than forcing your aestheticians to meet money quotas.

Imagine you are an employee at Sugar Me Wax and you just received detractor feedback from the client. First off, both the owner and the manager have now seen this feedback and that is inherently embarrassing for the aesthetician. Additionally, now our lead aesthetician has to offer a free appointment to the clients in order to retain her as a client because of your mistake. If you are a team player (which all of our aestheticians are), how motivated do you think you will be to avoid detractor feedback knowing that it will be embarrassing, your manager will have to work for free, and knowing that if you get too many of these feedbacks you will be fired?

Growth:

In the salon industry, research shows that a promoter is likely to tell 2 to 3 people about your salon. Passives will not tell anyone (that’s why they’re called passives) and detractors will tell an average of 18 to 20 people!  We have already discussed how to minimize the effect of the detractor, but how do you capitalize on a promoter? 

Once you know your client is willing to promote you, offer the client an incentive to refer friends to you! At Sugar Me, every promoter is given a follow-up email that explains our referral program. The result has been amazing:  we receive typically around 5 to 10 referrals a week! 

I would like to conclude by reemphasizing the fact that a Business with a high NPS score is likely to have double the growth of a businesses that has average scores for the industry. The philosophy here is that if you will take care of the customer, growth will happen organically and you will be successful. The NPS gives you the tools necessary to effectively take care of the customer.  Now go and use the NPS score to grow your business!

About the Author

Brigham Dallas is the owner of Sugar Me Wax, a Brazilian wax and Brazilian sugar salon located in Phoenix, AZ. While Brigham has never stepped foot into the treatment room (thankfully), he has 8 years of digital marketing experience as the owner of a digital marketing firm that is a certified Google partner.

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