Think about the way you manage your salon currently. Do you know which tactics are driving the most revenue? Or which consumer preferences have the greatest impact on salons? Most important, do you know how your salon performance compares to similar businesses?
These are foundational questions that benchmark data can help answer. With measurable data and industry benchmarks, you can make clear decisions on strategic shifts that can yield measurable results for your salon.
With the goal of empowering salons, spas, and medical spas, Zenoti analyzed 2022 performance data across its software platform – used by more than 25,000 beauty and wellness businesses worldwide. In the 2023 Beauty and Wellness Benchmark Report, Zenoti shares key trends and data insights across three levels of achievement across the U.S. and Canada: top performers, high achievers, and the industry average.
Here are four key salon business trends from the 2023 report.
1. The power of customer feedback
During 2022, the beauty and wellness industry saw impressive growth, with overall monthly salon and spa revenue up 14% compared to 2021. According to additional U.S. Census data, this growth is expected to continue unabated into 2028 and beyond.
Many factors can be responsible for revenue growth, but here’s one that may not be as obvious as a direct sale: Data shows that the more customer feedback a business receives, the more an average guest spends per visit at that business.
With that in mind, every salon should ask for guest feedback – and mark it part of their general workflow. Guest feedback also empowers salons to turn negative experiences into positive ones, manage their brand reputation online, and gain powerful business insights.
“How did we do?”
Every time a salon delivers an exemplary experience to guests, many move quickly to secure a rebooking, forward provider tips, or purchase a retail product before they leave the salon. But staff members can go a step further by asking for feedback from guests at the same time.
Even better: Integrate digital guest feedback requests into the post-visit process.
Top-performing salons will take advantage of this largely untapped opportunity by instantly sending guests a “how did we do?” digital form. This simple step generates many long-term benefits far beyond good customer service:
- Data shows that the more feedback a salon receives, the more its average guest spends.
- Consistent guest responses can inform new strategies and identify needs.
- Within feedback requests, the right prompts encourage guests to post an online review (which, in turn, can influence bookings).
- A regular flow of online reviews can improve search results and increase overall star ratings.
Salon tip: Zenoti customers can use an intuitive tag-based system to easily collect and manage guest feedback, map data to specific service providers, monitor strengths and weaknesses, and track marketing offers and guest win-backs. See how it works.
2. The benefits of gift cards
Digital and in-store gift cards are also powerful revenue drivers for salons. According to Zenoti analysis, top-performing full-service and luxury salons see impressive gains from gift card sales – more than 11 times the industry average.
Numbers are even higher for top-performing barbershops and quick-service salons, which saw more than 16 times the annual gift card sales than the industry average.
Moreover, at the industry’s biggest gift-card sellers – the top 10th percentile – gift cards are used as payment 13.8% of the time.
Behind the data
Today, top-performing salons are figuring out ways to boost their business efficiency and create more online sales opportunities. Whenever possible, these businesses enable guests to buy gift cards via a mobile app or the salon’s online store.
Top performers also understand the power of gift cards to bring in new guests. From 2020 through 2022, at Zenoti businesses, 21% of gift cards were redeemed by first-time clients.
Top-performing salons also show a marked tendency toward red-carpet treatment for guests, which increases the likelihood that new guests will rebook on the spot.
Salon tip: With Zenoti, guests who purchase gift cards can choose a specific amount, redeemable for any product, service, or package. Salons can also customize a gift card toward specific services, packages, or special occasions – and can include a tip amount on the card for extra convenience.
3. The growth of online booking
In reference to salon booking trends, a 2022 Zenoti consumer survey reports that 83% of guests express an interest in booking via mobile phone.
With online scheduling now an established consumer habit – from healthcare to car repair, dining, movies, and more – this data is not surprising. Yet too many salons still use traditional – and less efficient – booking strategies.
However, full-service and luxury salons that are top performers in online booking are booking online 2.5x more often than the industry average. See why on salon scheduling software
Quick-service salon booking trends
In 2022, quick-service settings that typically take walk-ins were among the businesses with the highest online booking rates. One reason: many of those businesses prioritize digital booking by offering a self-serve kiosk, putting control and information (e.g., available service providers and wait times) in their customers’ hands.
Although online booking is just one piece of a digital-first guest experience, data shows it’s also business critical.
Bottom line? Online booking is more convenient for guests. It also reduces front-desk calls. More important, online booking can help increase revenue (see tip, below), making it a must for beauty and wellness businesses.
Salon tip: Even before guests step in the door, salons can use Zenoti software to boost guest spending via automated retail and upsell suggestions during the booking process. For example, guests booking online might respond to a recommendation to add a complementary service, extend a timed service (like a massage or facial), or order a favorite product.
4. The impact of customer no-shows
Every salon wants a better way to deal with no-shows. But the problem persists: even for average full-service and luxury salons.
Barbershops, nail salons, and other quick-service businesses also experience a no-show gap. For these businesses, the average no-show rate is 14 times higher than at top performers in those categories.
This means for each $41 no-show at a top barbershop (2022 average ticket size) the average barbershop loses $574 from no-shows.
Practical solutions to the no-show problem
Fortunately, Zenoti data also indicates that the higher the online booking rate, the lower the no-show rate. Why? Online booking allows salon staff to build safeguards into their booking processes.
Sharing a cancellation-fee policy during online booking is a viable deterrent to no-shows, encouraging guests to reschedule instead. Businesses with higher-priced services can also require a credit card during booking.
Salon tip: To help safeguard your booking process, use Zenoti to create an enforceable cancelation policy that reminds guests that they will be charged automatically for no-shows. Zenoti makes it easy to include a link to your policy via multi-channel (SMS and email) appointment reminders and confirmations. Zenoti POS also streamlines fee collection if guests miss their appointments.