Posts Tagged salon management
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 October 8, 2009 with No Comments
I try to spend at least 8 hours per week looking through some of the hair forums and blogs to see what customers and salon owners are thinking. It’s a great way to get new ideas and to get a feel for what customers really think - generally, the ability to post anonymous comments brings out what folks really feel.
Earlier in the week I ran across a forum where salon owners were griping (in a good way) about the expense, carrying cost, and pure hassle of dealing with some of the well known brands and the distributors they buy from. While many folks are genuinely satisfied with many of the there suppliers, many are not. And many have considered selling shampoos and conditioners under private label brands.
Why? Well the list is pretty long and it will probably take a few posts to dig into depth. But, here are a couple of things I hear.
- Getting “jacked around” - Sorry, it’s the only way to say it, and that’s what many folks feel. Here are some examples.
- Discontinued products (with no warning) - I have a long list of products customers LOVE, but have been discontinued. We are not at the corporate level of many of these companies so you don’t know what the justification is, but I promise many products are discontinued as a mistake.
- Price changes - Not much to say about this one - often necessary, but I don’t believe some of the changes are warranted not justified - just more attempts at increased profit.
- Delivery - Some manufacturers are pretty good…many are not.
- Snooty-iness - Yep, again, sorry for the lack of better vocabulary, but “it is what it is”. Increasing demands, selective exclusivity, product positioning - yepper, all of the above.
- Product Diversion - The major manufacturers just need to get over this. There are numerous marketing and sales channels available for personal care products. If a few of them would go to b-school, they might figure out that ”exclusively through professional salons” isn’t such a great idea - especially if everyone is doing it. Prohibition is over…and the majority of consumers are not married to their brands - especially at lower price points.
I didn’t spend too much time discussing why a salon owner might turn to private label, but for those of you in the business you understand and probably have a much longer list. With that said, here a re a couple of reasons why many stylists and owners prefer their own brands:
- They know their customers - This allows them to carry just the products they need that they think will do the job. It also allows them to design labels, names and verbiage that will sync with thei customer base better.
- You can often make more money - Name brands may go through 3-4 levels of wholesalers, distributors and manufacturers before they hit your shelves. This makes for lower margins for you and higher costs for customers (which is not a good thing in this economy). As a side note, many (most) upper-end brands spend a TON of $$ promoting, advertising and packaging their products. You can be sure you as the salon owner is paying the bills. With private label hair products the products go straight from the manufacturer to you…period.
- You can dictate the pricing and promotion as you wish - sales, specials, give-aways - you name it, you can do it. Plus, if you salon has a website, you can sell your products online without fear of retribution or having your “name brand” pulled.
Here’s a couple of ideas to get started. There are some draw-backs. You need to educate your staff. There is a an upfront cost to getting started (labels, art work, etc.).
If you are interested, there are several companies theat have private label hair products available for purchase - Alternative Beauty, Aware, and Liquid Tech are three that are good.
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 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.
