Posts Tagged hair salons
Posted on March 30, 2010 with No Comments
Many of my friends and subscribers to this blog have told me 2009 was tough. Decreasing clientele as well as a reduction of sale of in-house products such as shampoos, conditioners and styling aids.
The goods news is that 2010 has started out stronger than expected. Typically hair products whoesalers, reps and salons expect a slowing in the winter (after New Year) and another slow period in the Fall. Reports I get back are that January and Febuary were not bad, though March has been soft.
Hopefully this is a good sign that the increase in the stock market and build-up of business in the manufacturing and technology sectors will trickle down to the folks cutting the hair. We’ll see!?
With that said, Spring is here and many folks are planning Spring Break vacations and getting ready for the summer. This a perfect time to increase promotions for new 2010 hairstyles, coloring and to promote new products that have recently been introduced at the shows.
Offering discounts for family cuts as well as clearance sales for products on the shelves can boost traffic and provide a financial boost before kids get out of school. Partnering with local schools, updating signage with fresh messages, and getting your name out there via discount coupon books is a good start.
Another option for improving salon profits is to consider private label hair products. If you think this is only for the “big boys and girls”, you might be mistaken. Many manufacturers have formulations that are develoed just waiting for your label or screen. While this may seem like a minor addition for salon management, increases in prices, limited selection from distributors, and minimum quantities can lead to unsold products on the shelves.
Private label can offer a huge improvement in per unit profitability, a wide selection and very low minimums. Its easy and less expensive than you might think. To investigate further, call our favorite hair products manufacturer at 888-909-1658.
While many folks are still feeling the pinch, let’s all look forward to better days ahead in 2010!
Posted on September 28, 2009 with 1 Comment
In our continuing quest to increase sales and traffic in salons and barber shops, consider selling major brand salon products at a discount - it has worked for Wal-Mart and other major retailers, it might just work for you!
Many salons and barber shops I have visited generally carry one to three major brands they keep on the shelf. If promoted by the stylists or owner, you might get a few sales. Unfortunately, this is often NOT the case and product sits on the shelf moving very slowly. If this sounds like it might be the situation for you, then consider an alternative - deeply discounting well-known shampoos and conditioners to attract more customers and increase sales.
Many small and even multi-unit shops believe products should be marked-up to give them the highest margin. For high-demand products or if your shop has high traffic, this very well may be the strategy you might follow. However, as with many types of products, there is an “elasticity” to the price and volume associated with most products.
“Elasticity”, or more commonly referred to as “price elasticity”, refers to the sensitivity the product’s price has on its sales volume. For the highest demand products, the price can be raised quite high before demand drops. For most products, however, discounting the price leads to increased sales - to the point where discounting no longer shows an acceptable profit. The trick is finding the perfect balance - and that balance varies depending on the product’s demand and exclusivity (can they find it somewhere else?)
Many salons sell brand products at a 100% mark-up or a 50% gross margin. This is typical is the similar mark-up the distributor might get from the manufacturer. For instance, a distributor may get Kenra shampoo from the manufacturer for $4.00. They in turn sell to the salon for $8.00. The salon in turn sells to their customers for $16.00. Pretty stardard fare.
But, what good does a good, high or reasonable mark-up get you if you don’t sell anything?
Therein lies the the justification for selling discount salon products. If you discount a $16.00 shampoo 25% (selling price of $12.00), you still get a reasonable gross margin (GM), but you might triple your sales - puttting you ahead on cash and profit. Also, if a customer likes the product they bought AND the price is good, they will likely return for more purchases - giving you an annuity-like revenue you didn’t have before.
While this sounds good on the surface, you must promote the products. Signage, ads, recommendations by stylists, etc can “get the word out” improving traffic. Next time we will talk mores specifically about how to promote your discounted products.
Tags: barber shop management, discount salon products, hair salons, improving sales, increase profits, increase revenue, increase traffic, more sales, recession, salon management, salon products
Category: Community, Improving Profits, Traffic & Revenue
Posted on September 21, 2009 with No Comments
A good friend of mine owns one of the largest hair salons in north Georgia. Owned and run by he and his wife, they have experienced a measurable drop in volume and sales in the past 18 months.
Theirs is a full service salon offering color, perms, straightening, and serve both women and men. In the past, they also offered facials along with foot care and fingernail work. The first thing they noticed was business dropping in these ancillary services - primarily because they were not considered necessities per customer feedback.
Regardless, during “good” economic times, these services sold well and were considered by many a very relaxing way to complete a salon experience - not necessarily competing with a spa or day spa, but a nice supplement to services and a very nice add-on for additional revenue.
Something you might consider to increase salon revenue, is to offer a promotion of a free facial periodically. While this may not be a tactic you want to offer daily, picking a day or two a month might be a big draw to bring in some very tired customers looking for a renewal.
The cost can be minimal relative to a big boost in sales. Setting up a station toward the back of the store may be as easy as putting up a few screens and there should be plenty of massage experts who would be willing to work a dy or two a month for some additional exposure.
If you have an outdoor display, post the promotion or foot the bill for a $50-$100 banner that you can display. For those salons who have tried this, promotions have ranged from “free” to “free with a perm or styling”. Again this may not be an answer to an overall increase in permanent traffic, it’s a service that will probably bring in new customers and boost loyalty of your current customer base.
Tags: Add new tag, hair salons, increase profits, increase revenue, increase traffic, recession, salon management, salon revenue
Category: Community, Improving Profits, Traffic & Revenue, salon management
Posted on September 11, 2009 with 1 Comment
For small, large, and boutique salons, it is rare to not see a sign that says “Walk-ins Welcome”. But is this a good tactic for increasing and traffic and revenue? Let’s take a couple of minutes to discuss.
“Walk ins Welcome“provides an opportunity for the salon owner or manager to communicate to the world that you don’t need an appointment. While this certainly doesn’t ring an “ha-ha” moment and seems pretty obvious, the strategy is to avoid the notion by many that appointments are required to get your hair styled or cut at a busy or upper-end salon.
While it is true getting into one of the better salons can be difficult, there are generally stations and stylists available whereby you can fit-in folks who walk-in. The benefit is you are able to avoid what is a deterent to many potential customers for coming into your shop - namely, the necessity and hassle required to stop-by or call to schedule an appointment.
Recently, as business continues to drop during this recession, I have increasingly seen higher-end salons letting folks know that appointments are not required, and in fact, new clients are welcome at the drop of a hat.
Can this hurt your reputation, though? We asked several owners what their opinions were and the responses are not all that surprising.
We discussed this with what I would consider an “average” large beauty shop owner. On Fridays and weekends, his station salon is generally full - of stylists. These are mostly independents who have “rented” stations. Give they only have 3-5 appointments per day, getting a walk-in 2 or 3 times a day can be a significant boost in traffic. Additionally, this salon has a large “beauty shop” inventory of supplies. So, getting a few new customers also brings the benefit of boosting sals of shampoos, brushes, dryers, falt irons, et al.
The second interview we had was with a partner/owner in a very upscale salon in the heart of a high-end outdoor shopping area. Her perspective was her clientele came from word of mouth recommendations by satisfied clients and that her and her staff’s days were filled. In fact, promoting “walk-ins welcome” would do very little good since their salon was located on a side street with little or no high-volume foot ot car traffic.
So, the debate seems to fall on the side of promoting “no appointment needed” if…
- You are in a highly trafficked area - either pedestrians or vehicles
- You have excess capacity and time
- Your price points are within the range of most reasonable consumers
- You can benefit from ancillary beauty supply sales - combs, brushes, hairsprays, shampoos, blow dryers, etc.
- You and your staff are well-trained in the art of customer service
Posted on August 14, 2009 with No Comments
Publishing your prices to the world - competitors or prospective customers, alike - can be a good thing and, well, a not so good thing.
With a deepening economy and salon traffic and sales down substantially, the creativity fires are brewing - leading to many conservative as well as fringe techniques for getting more folks through the door.
Most recently I noticed one of the top boutique salons in Atlanta publishing their prices on their marque. Normally used for prophetic sayings or introducing new products, the sign clearly laid out all the prices they were charging for certain treatments…shampoo and style; shampoo, color and style, perms, et al!
While this may not seem too unusual, for this “top tier” exclusive salon, it was unexpected for me. Does it work? Well, yes and no.
The first argument is that you give away your pricing to your competition and you lose exclusivity. The first issue is competitors can get your prices easy enough with a quick call or having a “shopper” stop by the salon or in fact have their hair done.
Yet pricing exclusivity issue is another challenge. Exclusivity draws customers, and in some cases, repels them. The trick is to find the balance - which I believe is understanding what are the most common treatments in your area, finding a price point that will draw folks into the store, then keeping them (with service and a great hairstyle) for increased salon revenue?
So, how do you price the services?? I recommend running seasonal or situational sales - back-to-school, Thanksgiving, Halloween, wedding parties, etc. Whatever the occassion, make sure it is well publisized - on your website, in the papers, on your sign, or have a small sign made-up to stick in your lawn, outside the store or in your window.
Remember, as you consider pricing and competition, that the majority of customers will stay with and be loyal to their stylist once they find someone who works well with them and does a great job on their hair. Pulling someone away from that loyalty is tough, so make it easy with the right pricing and occasion.
The idea to keep in the back of your mind is that if you normally see 60 customers per week and each of them extend their stylings one week, you will lose about 240 stylings per year - or the equivalent of roughly one month’s worth of revenue. (Note- this assumes your clients get their hair styled once per month)
Price your services and consider your service specials accordingly to make-up for that lost traffic.
Tags: advertising, barbers, hair salons, increase profits, increase revenue, pricing services, salon management, salon revenue
Category: Community, Improving Profits, Traffic & Revenue, salon management
Posted on July 20, 2009 with No Comments
In keeping with our continued theme of improving salon sales, I wanted to share with you an idea from a friend of my wife and mine.
She owns a relatively upscale salon in the heart of Roswell, GA…you know the kind - lot’s of shops and boutiques nearby in a renovated, very old home. It’s filled with art and unique antiques and her clientele get the best styling and are able to afford it.
As with most salons, her traffic has been down - fortunately many of her customers have not been directly affected by the poor economy, though her traffic has decreased measurably in the past 18 months.
In the south and southeast - Georgia, North and South Carolina, Florida and the panhandle states, many kids are starting to get ready for school (this was quick summer, uh?!) With that in mind, our friend started offering free haircuts to children 10 years old and under when a mom or dad came in for styling.
This makes sense. The kids are starting to get haircuts, buy clothes and get into the “groove” for their return to school. They’re getting their haircut somewhere, so she figured it might as well be here (there). And guess what…she was right. Since the July 4th weekend, she has seen a big boost in traffic.
And interestingly, many of the moms who often send the dads out to get cuts with the kids on weekends, scheduled appointments - needless to say, they have been “slammed” on the weekends - just as much of the wedding party group traffic has started to slow.
Depending on your target customer, this may or may not work for you…but, hopefully it will get your “imagination gears” turning with some possibly good ideas.
Good luck!
Posted on June 3, 2009 with 1 Comment
This a bit rambling, but stay with me for the punch line.
My wife, kids and I have been going to the same “favorite” sushi place almost once a week for the past 9 years. The staff knows us and we know them by name. They know what we like to drink, eat, and where at the bar we like to sit (the kids and I love to watch the food being prepared). We’ve seen the owners’ kids get married and have a couple of kids themselves. Even their older boy knows us when we come in and he and my 5-year-old go to the back and play with the toys.
Given the economy and recession, its no surprise that the crowds have dwindled. In fact, we are only going every 2-3 weeks. But here is the kicker. In the past several months (more like a year now), we have noticed the prices going up and up. In fact, I would argue prices have climbed probably 30-40% based on the bill we receive at the end of the night.
The Case Against Margin
I asked the owner why the steep price increases. She commented, rather sheepishly, that they needed to maintain their margins. Well interestingly, part of the reason we go there less often is because its getting too expensive. As a side note, we have several other friends who go there as well and we all agree the cost has gone through the roof. Like everyone else, we’re watching what we’re spending having seen many of our investments drop.
The point I’m making is that though business has dropped-off because of economic woes, they have further cut-off their toes by driving away business they are getting - or could be getting.
Now there is a reasonableness to the level of margins any business can sustain and still pay the bills, but as the saying goes, “I’d rather have 25% of something, than 100% of nothing”!
In the recession in 91′-92′, my wife and I owned a firm with 5 locations and about $5 million in revenue. We had a tough time when our customers’ purchase volume decreased by ~35%. With about 45 employees she and I both were more in management roles (vs. sales that we had been doing since we started). The Gulf War had started and business dropped almost overnight.
We assembled our staff and had a series of meetings to outline a game plan for surviving. The result was a three-point approach involving putting revenue, gross margin and expenses “under the microscope” to see what we could come up with. After several days we had put together a rather long list under each primary category. Interestingly, the gross margin list was the smallest, and it was agreed, the most fragile to our success (and survival). Why?
Raising Prices Can Be Bad for Profit
Fortunately, we had some very good customers - many personal friends. I called many of them and asked if they could continue doing business with us if we raised our prices a bit. The response was friendly, but frank. They too were having a rough time and if we raised our prices (even a bit), their management would ask they find another vendor (see, they were looking to cut costs as well).
The verdict was in. There were some services that were inelastic (less prone to pricing change), so we rose them a bit; but we slowly started lowering prices with new orders. Many of our customers noticed this and we were able to avoid widespread attrition of our client base. In fact, we ended up picking up a bit of market share as a result.
The Case for Traffic, New Customers & Sales
If you’re tired of reading, sorry. That was the prelude. The real story here is the other ideas that came from the meeting. Specifically, we needed to do everything we could to increase revenue and sales.
The list was long. Some ideas were great, some good, some goofy. But we wrote everything down, prioritized, and went to work - but the holy grail was to get more, new customers…period!
We put additional sales incentives in place for account execs (sales folks), and my wife and I returned to a daily sales routine. In the roughly 18 months of the recession, we increased our customer base by ~40% - but, our revenue remained flat. The good news is, if we hadn’t increased the traffic and number of customers, I’m sure we would have seen a steep decline in sales with layoffs and closings as unavoidable results. Another note, when the recovery began in 92″, our sales sky-rocketed. We had ~60% more customers than 2 years prior and everyone began ordering again.
It was a tough time, but we got through it. but the lesson learned was folks are very sensitive to price during a down economy, yet they still need services, though at a greatly reduced level. As per-customer-volume drops, it must be made-up with increased transactions albeit at possibly a lower margin.
Consideration for Salons
I want to finish with a real-world salon story. My wife has been going to the same stylist for 9 years. he and his partner split-off several years ago from a previous salon. The last time she went there, they were “slow” - as is the common phrase I hear with several of the salons we work with.
Well if you have folks on staff or if you are a partner or owner-operator, the time you spend at the shop is a “sunk cost”. Meaning that money and cost is incurred whether 1 customer or 30 come in that day - similar to rent or utilities. With that said, if your cost structure is somewhat fixed, then driving traffic is the difference between making money or not.
Let me give an example. Let’s assume you have three salaried staff plus yourself and two partners. Again, assuming you’re paying yourself a salary (plus tips and commission), you have overhead and daily costs you must cover. If your customer traffic has dropped-off because of the expense of coloring, consider contacting all your customers (email, phone, letter, etc.) and charging just for the cost of the materials and chemicals (and maybe a few extra bucks) - maybe once per month or something else a bit more creative.
Wow…are you kidding? Well consider this. If you have a staff of 6 and you’re working at 50% capacity, wouldn’t you rather have the traffic with hopes of new customers, repeat customers, sale of a few accessories or products, or some pretty healthy tips? I would - and it works.
This is one possible example, but there are more…many more ways to drive traffic, keep everyone busy and gain market share. When the economy returns to “normal”, your customers will love you, tell their friends, and business should be booming. Right now the keyword is market share and volume. Margin will take care of itself. That’s what we found! Good luck.
By the way, if you want to leave a comment or have a specific issue or want some advice, leave a comment, and I promise I will get back with you soon.
