As the owner of a skin care business, you already know that the tissue under the surface of one’s skin is just as important as the thin layer of epidermis on top. Just as certain skin care applications lead to better skin health, measuring certain metrics in your skin care business will lead to better business outcomes. To measure metrics, you’ll want to review your skin care business plan; if you don’t yet have one, use this skin care business plan as a comprehensive guide.
The following essential metrics will inform your steps to improve and grow your skin care business:
1. Inventory Turnover
A few calculations in this metric will indicate how quickly inventory items have been sold and require replacement. This metric offers a clear picture of the skin care items that sell successfully and those that need to be repositioned or removed from stock. Check this metric regularly to ensure a high rate of inventory turnover.
2. Sales Per Employee
If you have high-performing employees, you’ll note the rate of skin care sales skyrockets when they are serving customers. Measure the sales of each employee and, if there are differences in sales volumes, ask the high-performing employees to assist in training the employees with lower sales rates. It takes teamwork!
3. Customer Retention
Customers indicate their satisfaction with your business by returning…or not. Measure the retention rate, noting the percentage of customers who return, either in-person or online. Determine and apply remedies, as needed, to encourage loyal customers who will return regularly.
4. Social Media
Measuring this essential metric can be tricky; some of the activity is valid and valuable, while some is not. The most important metrics can be found in: the reach of social media callouts, the number of media mentions, and the number and quality of influencer collaborations. Track purchases based on the above metrics and allow investment decisions to follow the sales track.
5. Customer Lifetime Value (CLV)
The customer lifetime value measures how much revenue will be generated over the lifetime of the company-customer relationship. This metric is a forecast; however, it can be used to measure past and present sales, as well.
Each of these essential metrics are invaluable in reviewing, measuring, and assessing the strength of your skin care business. With continued attention to these metrics and consistent monitoring of the results, you’ll be positioned to make informed decisions that will maximize your success.