The Business of Beauty

Everyone is talking about the economic downturn, how could you avoid it? Pictures of doom and gloom for the retail sector fill our television screens. It has everyone worried. As small business owners many of us are concerned about the effects a recession would have on our income. That’s natural. But not many salon owners know exactly what they can do to “recession proof” their businesses.

Basically, the ideas I am going to provide here are the same tactics we should employing whether we are approaching a recession or not – It’s just more pertinent in difficult economic times. I teach that there are two major areas we need to concentrate on when times get a little tough. The first is to cut back on some of your costs. (I know what you are thinking – easier said than done!) But cutting back significantly on costs could simply mean doing things a bit smarter, not necessarily making wholesale changes to your business. It certainly means putting some time and effort into maintaining a healthy, loyal data base so that less money needs to be spent on attracting new clients through expensive advertising.

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How often have you walked away from a sales person shaking your head in disbelief because you barely understood a word they said? In our high tech world of computers, chemical compounds and acronyms for just about everything, it is all too easy to be lost in the jargon that surrounds purchasing even everyday items.

Those who know me, will know that I am an avid Apple Macintosh Computer user. I have owned Macs for years now and find them wonderfully easy to operate and incredibly reliable. Yet, I can’t give the same high praise to the sales representative that greeted me recently when I inquired about upgrading my current model.

Yes, I was greeted warmly.
Yes, the showroom was presented beautifully and;
Yes, the salesperson was enthusiastic to serve me.
But as soon as I muttered the word “upgrade”….I was whisked away into the far off world of computer speak.

Now, I don’t consider myself a fool, but I was lost after the very first sentence of gigabytes, RAM, DVD – ROM / CD Drive, and Fire wire. If this young man was trying to impress me with his knowledge, he was doing a great job. But if he was trying to sell me a computer system, he had no chance at all. You see, I had no idea what he was talking about, nor did I care. I felt a mixture of foolishness and anger. The salesperson wasn’t interested in my needs, my lifestyle, or my understanding. He was too busy impressing me!

Consequently, I chose not to purchase from that particular outlet.

Jargon in any field of business can kill sales. Doctors who presume we have a degree in anatomy or mechanics who think we can do more than put petrol in and change a tyre. Even cook book writers who believe we all grow exotic herbs and Asian vegetables. Or worst of all, beauty therapists who talk about active ingredients that other than industrial chemists no-one else has heard about and how they work on layers of the skin with really strange names. To make it worse, many of these products have French names that many of us cannot even pronounce correctly, let alone understand.

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In recent months I have enjoyed completing several tours of New Zealand visiting many smaller towns as well as the major cities. Across the country, salon owners are telling me that it is difficult to make a profit in these tough financial times that most of the world seems to be experiencing. Whilst it is true that most salons have noticed their patrons have tightened their financial belts there are still a number of salons trading very well and this poses the question - Why are so many struggling and yet some have barely noticed the economic downturn?
OR
Probably more importantly, how do salon owners battle through these times and maintain profit margins?

The successful salons I deal with have all had three factors in common.
1. They have a salon culture of high retail sales and present themselves as professional retail outlets to their customers.
2. They have high re-booking rates for all services.
3. They don’t rely on advertising for new customers to increase their turnover. Instead they work their data base extensively and have systems in place that ensure that they maximise the spend of their existing clients.

Let’s explore this in a little more detail.

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I recently caught up with a colleague whilst touring New Zealand, who suggested that there was actually an optimal time to deliberately make clients wait before taking them through to their consultation or treatment room. Her thinking is that customers will browse, read signage and information sheets, stop at displays and look at product on shelving.

She suggested that three minutes is long enough for the visitor to take in the information available in a reception / waiting area but not so long that they get upset with the fact they have to wait. Her advice was that salon owners should deliberately make every client wait this amount of time to optimise the potential of the reception area to suggestively sell extra products and services.

Now whilst I am not a fanatic of waiting for anything, I can certainly see the merits in this way of thinking. So in this article I decided to offer some ideas to maximise the selling potential of waiting time that are simple, cost effective and that you can action tomorrow for increased sales.

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As an industry consultant I was recently asked how I would advise selecting product ranges for a salon. Whilst I was explaining the criteria I commonly use to determine the best brand for each individual salon, the conversation stalled when the topic of “salon exclusivity” was mentioned.

It seems that there is a great deal of ill feeling from salon owners across Australia about product suppliers choosing to sell their wares in department stores, pharmacies and even discount cosmetic outlets. Whilst I can understand these companies wanting to be represented in commercial outlets for branding exposure and sheer sales volumes, it indisputably detracts from the image of salons being skin care experts when the general public can access the very same product from outlets where they receive little if any professional skin care guidance.

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