Posts Tagged increase traffic
Posted on October 14, 2009 with No Comments
Many of the folks I know in the salon and barber business tell me many of their customers - women and men - suffer from sort of hair loss or thinning, especially as their customers reach 40-50 years old. While its certainly more accepted for men, thinning hair on women is embarassing for many. The key here is…helping our customers with hair loss problems can help drive more revenue and sales.
Follicle Boosters
When discussing methods for increasing revenue and traffic into salons, several recommendations came up that salon owners and stylists should take a more active role helping their customers other than the traditional “well, you should try this shampoo” tactic. And while the objective is not to become a hair transplant or hair replacement specialist (or proponent, in fact), there are several things we can do, recommendations we can make, and products we can sell that will be a win-win for everyone.
First, understand your customers needs. Most men are indifferent to hair loss unless they are younger and are experiencing rapid hair loss or traditional alopecia male pattern balding. So, offering a shampoo for thinning that smells good and works well with their hair type might be a good suggestion.
For women however, finding more of a solution might be best. Women’s hair loss is often the result of hormones, dirt, oil accumulation, chemical treatments, poor circulation, et al. Recommending a topical application or a scalp cleanser might be most appropriate - especially if they are specifically formulated with active ingredients such as Minoxidil or Trichogen.
Second, understand what products might be helpful. Biojen® and Nioxin® are two of the most popular products for thinning hair and for har loss. There are also several alternatives. Nourish® makes a shampoo/conditioner combo called Awaken & Replenish® that works very well and gets high reviews. Also ProFolla® makes some topical applications that work and that are designed for use on men and women alike - a follicle booster and hair a growth stimulant.
All of these products are designed to boost hair growth and can be an easy way for you to increase revenue in your salon or shop. And, they all can be purchased at wholesale from manufacturers or distributors. Call 888-909-1658 if you want to get more information. The trick to helping cuatomers with hair loss is to understand what the problem is and formulate a solution - and if additional or new product purchases are included in the solution, then good for you. Either way its a win-win situation.
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 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.
Posted on May 25, 2009 with No Comments
The ISBN (International SpaSalon Business Network) is holding it’s 2009 Annual Conference May 31st, June st and June 2nd at the Ritz Carlton on Amelia Island.
If your company owns multiple salon/spa locations, attending ISBN’s Conference gives you your best chance to stay on top of the many changes our industry is experiencing, especially important in these difficult times. Our association offers salon and spa owners an opportunity to belong to an inclusive network of companies that shares information and ideas. ISBN
The Keynote Speaker will be John Paul DeJoria the CEO of Paul Mitchell. The conference will highlight workshops, a “Link-Up lounge” for making and re-cementing industry contacts, and will kick-off with a golf tournament. Registration ranges from $395 to $995. Follow this link for more information and registration.
Considered a great online destination for the hair salon owner, ISBN does a great job focusing on business management…particularly in these difficult economic times when traffic and profits are down and costs continue to increase.
Tags: conferences, education, hair salons, increase profits, increase revenue, increase traffic, profitability, recession, Symposium, workshops
Category: Community, Improving Profits, Shows & Conferences, Symposium
Posted on May 6, 2009 with 3 Comments
As a follow-up on our previous post regarding increasing salon revenue, last night (coincidentally) I saw a report on the local Atlanta news about salon owner giving away free haircuts to those who recently lost jobs.
11 Alive News a local NBC affiliate reported how a salon owner was reaching out to those who recently becam unemployed. I reported on this in previous blog as a technique to not only improve traffic but to help your community. Apparently from the report, all the stylists were excited to take part and response from customers was overwhelming - and heart-felt with gratification.
Needless to say, the two minute piece on the 7pm news has helped build traffic, loyalty and exposure - free exposure. While every owner who chooses to offer a plan like this will get similar FREE coverage, it might be picked on the radio, local or community paper, or by word of mouth.
The key to promoting, is, well, promoting. Let nearby unemployment agencies and churches know of your program. Drop-off leaflets at temporary agencies. They usually have large rolls of folks looking for work, and displaying or posting a professionally prepared flyer may often work well. Especially if you reciprocate. Offer to put some of their cards or a flyer in your shop. If folks are getting their haircut and are looking for a job, considering registering with a temporary employment service may help them find a job…everyone wins!
The cond part of the report focused on free styling for moms for Mother’s Day. An Atlanta-area salon hosted a Mom Pampering Day. The recruited several makeup artist, nail specialists, and spa staff to give free massages, nail treatments, and makeovers - along with a wash, cut and styling. Again, they got great, free press and exposure and judging from the video, the place was PACKED. Most salons provide some spa services. If you don’t, go visit a few to see if you can pull together a partnership for a day to promote everyone’s business. If they are slow, then they might jump at the chance to perform the services + they have their own prospect for promotion.
