Input needed regarding booth renter
I work at a med spa that recently decided to rent out one of our treatment rooms to an esthetician. It will be a monthly rate, the esthetician has the option to use the backbar product the business has been using on clients and retailing, or bring in her own. Our question is...we have an established database of clients which have been seen by our on-staff esthetician who is an employee, and they will mainly continue to see her. However, if they decide to schedule with our booth renter, the Dr. wants a commission split on the treatment rate. Does this sound reasonable? I've never worked in this capacity before so I am unfamiliar with how it should work. Any suggestions/ideas?
Thank you!
Tags: booth, contract, med, renter, spa
Views: 2713
Replies to This Discussion
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Permalink Reply by Relax & Rejuvenate on
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Reasonable? Depends on what the rent is and what the % the owner is expecting
What if they see the renter becasue the employee is not avaialble -- not a DECISION -- but a business need to keep the client happy.
After how many visits does the practices client become the renters' client?
The trick with any compensation scheme is to keep is simple, but also to test it under a variety of hypotheticals to see if it is consistent and drives the right behavior.
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Permalink Reply by coldsalineplexus on
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Great answer! I'm also considering switching some things up with my compensation schedule... any chance I could swap emails with you?
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Why don't you post them here so others can learn as you think them through
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Yeah, you know, my ideas aren't so put together that I would be ready to think them out publicly, but basically I am considering the switch from straight commission to building in some sort of bonus structure. Very different than rental obviously (although in a different department, I would like to explore a rent+commission arrangement). My commission is 35% for estheticians, due to the equipment and treatments we have available (microdermabrasion, ultrasonic, microcurrent, multiple different LED delivery methods, Radiancy, hydrodermabrasion, dermaplaning, dermafiles, etc. etc.). I am wondering if it would be better to do a commission minus equipment/product fee, or tweak product commission to reflect measurable performance goals, or what.
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I am morally opposed to % pay. It ends up being more confusing in the end, and our employees work has an absolute value, not a relative value.
If you pay % on a discounted service, then the employee is taking the hit for your marketing decision. If they employee gets their usual rate, then you really aren't paying % commission, so why pretend you are?
If you pay more for microderm, for instance, because it is higher priced, but then charge a higher product/equipment fee, then why not pay straight $ per service which is pretty much what % - fee ends up being anyway
After all, you plunked down the cash for the extra FF&E and products -- if they go unused you take the hit, not the employees, so no real reason to pay them more when it gets used. All upside for them, no downside.
My preferred comp scheme is either fee per service (x for 30, 2x for 60 min, 3x for 90 min services, regardless what they are or the price point, or full price or discounted) or $ per hour + fee per service at a much lower level than straight fee per service.
No product charges, equipment fees, allowance/calculations for discounts -- you know what you make every time you have an appointment.
I am, however, a big fan of performance based incentives for upgrades, sales goals etc.
Re booked before they leave -- $W
upgrade them from basic facial to peel -- $x
Cross-sell them another service with another employee -- $Y
Sell one client more than $x in product -- $Z bonus
but, once you have a client see you X times, you don't get commission on replenishment of products, only on expanding product usage.
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This is a very interesting perspective!
So, I am wondering how your perspective on "upgrade them from basic facial to peel" would apply in practical terms.Right now our basic facial costs $120, and our facial with peel costs $145. Currently they make their incentive by earning the difference in commission rate between the two. Can you give me an example of how one might calculate that differently?
Also, for staff who are already earning one way, how would you recommend initiating some changes? I don't see the last suggestion going over particularly well, for example, especially since our estheticians do follow-ups and make sure their clients are replenishing their purchases - bring them up to the counter, etc. Thoughts?
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Right now our basic facial costs $120, and our facial with peel costs $145.
35% of $20 difference is $7, so that is their bonus currently.
Is there an additional equipment charge or product charge? What are your actual additional product costs for a peel. Does the upgraded service take any more TIME to perform.
What are other price differences for upgrades on your menu?
The reason we pay bonuses on technician initiated upgrades is it is ridiculous to pay more for a 60 minute service if a first-time client picked that service in the first place.
We often see clients replenishing separately from receiving a service. They pop in because they ran through one product faster than the others they bought at the same time. And, I did misspeak -- we pay lower commission on replenishment, but they do get a commission.
All change is hard. You have to give many, concrete examples of how the new system is better for EVERYONE -- if the goals are met. Higher pay for growign the business, lower pay for status quo. Same old same old is NOT an option. Those who won't like it are those who don't understand it or don't think they will do the things necessary to meet the goals.
A business that is not growing is waiting to die. Your compensation scheme needs to reward and drive growth not reward and encourage the status quo.
Over the years, we have found that when clients switch technicians -- due to absence, separation or schedules don't mesh -- we find those clients are more likely to buy new products. It is very easy -- and human nature -- to assimilate then skate.
There is always room to capture higher "share of vanity space"
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Great points! Love this: "Higher pay for growign the business, lower pay for status quo. Same old same old is NOT an option."
To answer, there are not any added charges that currently come out before commission split. Sure, there are some added product costs to add a peel to a facial - Anywhere from pennies for a quick swipe of lactic acid to $12/face for our designer layered peels.
I am liking your idea in theory, but am concerned about tracking all these minor details. Also, I don't want an antagonistic relationship to form between the desk and the service staff - and I do want desk members to attempt the upgrade in advance when booking (which they are very good at). Do you have custom software?
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Oh, and I guess my counter to the fact that I did invest in more FF&E is the fact that estheticians specifically seek out my studio to work at because of the equipment, AND clients seek us out because we have the latest tech. So there is some component where the % commission comes in a bit lower than "traditional" spas where each room just has a steamer and mag, BUT the earning potential on commission is MUCH higher because of the potential for upselling all these spectacular treatments. Thoughts?
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BUT the earning potential on commission is MUCH higher because of the potential for upselling all these spectacular treatments.
Then reward the UPSELL only. If ms. Smith is visiting for the first time and picked the glycolic peel hydralift facial all on her own, the technician should only be paid the basic service rate. They did not upselling, the client did. The technicians reward for the higher priced service is likely to be a bigger tip and the opportunity to sell more and higher priced products for the home-care to support the higher end treatment.
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Very interesting! Okay! Now I have some great points with which to draft out a hypothetical plan :) I agree with you that the specific actions that I want to see happen have to be what is rewarded.
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Are these employees you are paying 35% ?
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