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Old 09-26-2014, 03:10 PM   #31 (permalink)
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Re: What is your PSA

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Originally Posted by Steve Underhill View Post
When PSA goes up income goes up.


This is actually untrue, if you mean "Per SALE Average", as you defined it.

If I sell $500 to 10 customers out of 100 seen - my Per SALE Average is $50 and my income is $500.

If I sold $500 to 5 customers out of 100 seen - my Per SALE Average would go up to $100 ($500 in sales divided by 5 customers) - but my revenue would be the same.

In fact - I could make just one SALE - of $200 - to one customer out of 100 I saw that day. My per SALE average would be $200, the highest yet!

But my daily revenue would be the LOWEST - as well as my Per Tan/Session Average.

Last edited by sunsally; 09-26-2014 at 05:36 PM.
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Old 09-26-2014, 03:22 PM   #32 (permalink)
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Re: What is your PSA

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Originally Posted by RAYZFORDAYZ View Post
This number obviously changes throughout the year due to busy and slow season so expecting a $15 PSA every month would be most difficult and unrealistic in my opinion.
This can be true - to an extent. In this case, PSA meaning "Per SESSION/TAN Average"

Slow season you have fewer "opportunities" to sell - fewer "door swings" as less people come in. That MAY mean your per tan average goes DOWN. If you are a heavy membership salon where most customers are on EFT, this could certainly be true. Busy season gets more "single use" buyers as well as short terms options (e.g. visits or a single month).

However, maybe you have a range of equipment and your sales people are well trained to upgrade customers as well as recommend new products or other service offerings. You CAN do things to try to keep your averages up!



However - again - depends on what you measure.

For example - most looking at those calculations exclude EFT monies. In a heavy EFT environment, this can make a difference! So can look at your revenue as JUST "over the counter" (sales at the register that time period) -- OR -- you can look at ALL salon revenue (this would usually be done monthly or yearly only) -- and include EFT billings. In the slow season, your EFT monies may stay fairly high - but with no tanners actually coming to tan! So your Revenue/Tan in those cases could be just as high - or higher - than busy season!


It is interesting to compare to others. But it is MOST instructive when comparing to your OWN numbers - to see if you are getting better, getting worse, or staying the same!

Last edited by sunsally; 09-26-2014 at 05:37 PM.
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Old 09-26-2014, 03:36 PM   #33 (permalink)
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Re: What is your PSA

Quote:
Originally Posted by RAYZFORDAYZ View Post
And this also changes with the type of salon you have and what your demographic / local household income average is around you:

Are you the fast food/ lower income/ low overhead/ low price salon? Then maybe you are getting higher foot traffic , but a lower PSA... The high foot traffic makes up for the low PSA then...

Or are you a fine dining/ high end salon in a high income area/ with high end equipment, and an upscale experience/ with higher prices? In this case your PSA will be higher.

Type of equipment/pricing and your tanner count WILL impact your numbers! But not necessarily always the same way!

BUT - in all cases - your "strategy" has to fit your overall costs!


For example:

Maybe I have a salon with multiple levels up to full HP. Maybe I can command high prices in this location and the average revenue/tan in my salon is $18.

If I tan 1000 customers in a month, I gross $18,000. - $18/per tanner/session Average

Another salon might have mostly lower level beds. They see 1000 customers/week! They average $5/tan.

4000 customers in a month - $20,000 revenue. $5/tanner/session average


Which is "better"?

Depends on:

Overall costs - rent, labor, electrical.

Maybe $20,000 is better than $18,000 -- because it is more money.

Maybe $18,000 is better than $20,000 -- if less labor or electricity to service 1000 tans vs. 4000

Maybe $20,000 is better - because rent is a lot cheaper than the other, "high end" location.

Maybe $18,000 is better -- because there is more "potential inventory" at the low volume store - they could tan more people if they could get them through the door!

Maybe $20,000 is better - because they could get higher end equipment into this very busy location and maybe get people to spend just a little more - and with faster beds, even see MORE people in a day if they are out there!


Bottom line - there isn't "one answer" that tells you what is "best". There IS one fit, that makes sense, for your set up. And a handful of proven ways to take an EXISTING location - and increase both revenue AND profitability!
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Old 09-26-2014, 04:43 PM   #34 (permalink)
 
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Re: What is your PSA

Quote:
Originally Posted by sunsally View Post
Type of equipment/pricing and your tanner count WILL impact your numbers! But not necessarily always the same way!

BUT - in all cases - your "strategy" has to fit your overall costs!


For example:

Maybe I have a salon with multiple levels up to full HP. Maybe I can command high prices in this location and the average revenue/tan in my salon is $18.

If I tan 1000 customers in a month, I gross $18,000. - $18/per tanner/session Average

Another salon might have mostly lower level beds. They see 1000 customers/week! They average $5/tan.

4000 customers in a month - $20,000 revenue. $5/tanner/session average


Which is "better"?

Depends on:

Overall costs - rent, labor, electrical.

Maybe $20,000 is better than $18,000 -- because it is more money.

Maybe $18,000 is better than $20,000 -- if less labor or electricity to service 1000 tans vs. 4000

Maybe $20,000 is better - because rent is a lot cheaper than the other, "high end" location.

Maybe $18,000 is better -- because there is more "potential inventory" at the low volume store - they could tan more people if they could get them through the door!

Maybe $20,000 is better - because they could get higher end equipment into this very busy location and maybe get people to spend just a little more - and with faster beds, even see MORE people in a day if they are out there!


Bottom line - there isn't "one answer" that tells you what is "best". There IS one fit, that makes sense, for your set up. And a handful of proven ways to take an EXISTING location - and increase both revenue AND profitability!
Now THIS is useful, helpful and practical consulting information! Very nicely done Ann, and thank you for taking the time to lay it out!
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Old 09-26-2014, 08:24 PM   #35 (permalink)
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Re: What is your PSA

yes very good
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Old 09-26-2014, 09:44 PM   #36 (permalink)
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Re: What is your PSA

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Originally Posted by Steve Underhill View Post
Ken, please give accurate information. Per Tan Average and Per Sale average are not the same thing. Her lies part of the problem here. Giving bad information.

The formula you gave is for Per Tan Average.
Per Sale Average is an average for each sale made not each tan. Ken if you are going to pretend to know the answer to a question you should actually give the right answer instead of trying to discredit me.

I urge all operators to not blindly except answers given to your questions. If you act on bad information the results of your actions will not be what you intended.
Steve, for over one quarter of a century (25 years for you) PSA has meant Per Session Average (see Sunsally's info). The number of sessions you have directly equates to the number of sales opportunities you have. Tell you what, how 'bout I "PRETEND" you didn't type the above, that way, I can "PRETEND" that you're a consultant who can offer valuable advice.

By the way, "excepting" answers is different than accepting answers.
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Old 09-27-2014, 08:26 AM   #37 (permalink)
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Re: What is your PSA

There's no pretending - Ken actually owns salons, Steve does not. Sunsally is a salon owner, Steve is not.

Unless you are a complete novice, I wouldn't begin to read Steve's posts. His advice is often far off the mark. However, if you are my competition, please read and re-read every single Steve post.
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Old 09-27-2014, 02:05 PM   #38 (permalink)
 
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Re: What is your PSA

I think this thread just made someone look really inept by someone who is his competitor. He might do better if he just ran a banner ad and didn't offer advice.
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Old 09-29-2014, 08:37 AM   #39 (permalink)
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Re: What is your PSA

Quote:
Originally Posted by Steve Underhill View Post
It is not divided by number of tans it is divided by number of sales made.

Psa as well as amount of sales per hour worked are great benchmarks for running monthly sales contest for your staff. Using sales numbers to motivate your sales staff is a great tool.
Steve this is one of the worst things you have ever written.

In your example:

Employee A works the morning shift from 9-3 and sees a total of 30 people and sells $300.
Employee B works the afternoon shift from 3-9 and sees a total of 60 people and sells $420.

You would reward employee B since their sales per hour are $70.

WRONG>>>>>DEAD WRONG>

You would want to reward Employee A since they averaged $10 a person per visit while Employee B only averaged $7 a person.

YOU SHOULD NEVER RUN A CONTEST BASED ON AMOUNT OF SALES PER HOUR. YOUR EMPLOEE WHO IS WORKING THE BUSIEST TIME OF DAY WOULD AUTOMATICALLY WIN EVEN THOUGH THEY MAY HAVE THE WOREST PER PERSON AVERAGE.
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Last edited by Robert K; 09-29-2014 at 08:40 AM.
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