Management Focus, Salon Talk

A Question and an Answer about Discounting

Malcolm | January 7th, 2012
This post is inspired by an excellent question regarding a previous post by me on the daily deal websites and in general discounting and it’s effects on business… please enjoy and I’d love it if you were to leave a comment to let me know your thoughts.

The Question…

Hi Malcolm, I like when you say “Your business should be be built on relationships and loyalty - not on discounting”, but I have seen quite few salons around discounting in December, Pay for one get the other one Free etc…
Can you tell me if you know whats happening? Is everyone around not doing ok? Why not discounting?  Im curious as I work on my own and don’t talk to many other businesses owners, it would be good to hear from you…

My Answer…

Nice to hear from you Viviane and thanks for taking an interest in my article… to answer your questions/comments…

There is a difference between discounting and adding value, Discounting is when you reduce the price of a particular service or product, like say… a Signature Facial normally $110.00 now just $69.00 – That’s Discounting.

Adding Value is when you offer the service for its normal price and give something else with it, i.e. a Signature Facial AND a Pedicure now just $110.00 (value $159.00) now although this appears to be discounting there is a subtle difference, you are promoting your regular service and encouraging clients to have an additional service as well for no extra cost, therefore you maintain a much better margin on the sale as the added service generally is not costing you the retail price of that service.

The rule of Adding value is… A high perceived value (retail Price) to the client and low cost to you, so, Pedicure is say $49 retail value and your cost may only be $19… (thus client is getting $49 Value and its only costing you $19 to give it)

The salons that are doing OK and better than OK are not doing anything unusually spectacular… they are just maintaining their Professionalism, Service and Systems, they are offering a 100% commitment to customer service and assistance, they are encouraging their Teams to be the best they can be and are appreciating their regular clients, always offering unconditional advice on skincare and beyond – they show their client they care through what they do for their client… I’m reminded of an old saying – People don’t care how much you know, until they know how much you care!

You ask – Why not Discounting? Well, discounting reduces your margin, and margin effectively is profit and you need profit to maintain the standards of service etc you provide in the clinic… In my experience Viviane, many salons and clinics do not have adequate margin to play with on each service they provide. It’s important to remember that margin is different to mark-up. Mark-up is the amount of money you add to the cost price to reach a retail price, (gross) Margin is the amount of money you have left after selling the service or product and deducting the cost of that service or product from it. Most clinics are not charging enough to be comfortably profitable as it is without discounting their prices further, hence my comments re discounting.

Viviane, you also ask “what is happening”? Well, many salon and clinic owners are at a loss as to what to do to improve their business and they need money (of course) to survive, and as they have not sat down and created a business strategy or plan they react to the events of the market… and do what everyone else is doing… and that’s discounting…Why, because they don’t know what else to do, and if other people are doing it, it must be right! right? (thats like saying ‘I read it in the paper so it MUST be true!)
As I have said in the past and will always say it… the answer to having a profitable business is to provide Value for money to the customers that come in and keep offering professional advice and recommendations. Additionally, having systems in place to let the client know that you care will also maintain the relationship with them (like new client letter, birthday greetings, preferred client promotions, membership clubs etc) . A strong consistent business/marketing strategy is essential as well.

Now… I could elaborate and get into great detail here Viviane, however the best advice I can give you and anyone else wanting a strong, consistent, profitable business is to get themselves a business coach, preferable someone who specialises in the Hair & Beauty industry… but you already know that don’t you :-) .


Kitomba, NZARH & HITO 2011 Apprentice and Business Awards: the champagne, the glamour….and passion everywhere

Malcolm | December 2nd, 2011

You know that something special is in the air when the country’s most prominent salon owners, stylists and industry leaders gather to recognise the talent, sweat and tears in the hair industry.

The 2011 Kitomba, NZARH & HITO Business Awards delivered, the talent was exceptional and the evening was a great success all around. I was thrilled with the opportunity offered to me to judge the awards entrants so my anticipation of the evening started to mount weeks in advance. When the seemingly endless debates over who were going to be announced the winner in the respective categories ceased, my fellow judges and I could breathe again satisfied in the knowledge that we had chosen the best.

With a well rehearsed speech in my pocket, I was ready for an evening of glamour, champagne and incredible talent.

The event was held at the Auckland Museum where the room was decorated in a light, clean sophisticated way and a stage that was visible from all tables (an achievement that many other rooms don’t seem to be able to achieve). The light airy feeling of the room was the perfect introduction to what was a very slick award and show ceremony. One could almost touch the excitement and anticipation of all who attended.

With an awards ceremony broken up by the very skilful talent of the Hip Hop dancers and a sumptuous dinner service the crowd was not left to ponder things for too long. Just enough time elapsed between award presentations and the speakers mostly respected that we were here to celebrate the winners so kept their speeches to a minimum.

The ever charismatic Mana Dave gave a commendable performance as MC although there were some notable hiccups along the way, which he handled with aplomb and kept the audience entertained well.

The overall winner on the night was the awards themselves and if this is any indication of the standard of salon owners in New Zealand then the industry is in strong stead for the future.

The awards kicked off with the annual HITO (Hairdressing Industry Training Organisation) awards which recognise the talent of the new hairdressers entering our colourful industry – the apprentices. Erica Cumming (CEO) and her team can be extremely proud of what they presented and who they represent. HITO perform an important role in the development of the New Zealand Hair industry through their work with apprentices and salons. The enthusiasm and passion that Erica’s team showed on the night was shining through. Congratulations to all the HITO and World Skills award winners, awesome job!

On to the business awards after some more hip hop and dinner. Finalists were read out and winners announced for each of the different categories and thrilled winners came to the stage to accept their awards, each having a few words to say about their achievement with most thanking their team, partners, mothers and fathers and all commenting on how proud they were to be in the company of other finalists salons and of course not expecting to win. It’s such a thrill to see what it means to winners and just how humble they are when accepting their prize.

One noteworthy mention must come from the overall winning salon, Reds Hairdressing. The owner, Diana Beaufort, graciously offered to open her entry to anyone that may be interested to see how she achieved her winning results. A clear example why she was such a worthy winner and congratulations must go to her for sharing the secrets to success with her industry peers. As quoted in Images Magazine, Diana says she has a fantastic team of people working with her. “They are all committed to going the extra mile consistently and I’m committed to providing them with the tools, knowledge, and life skills to be successful in their own right. These awards are a great opportunity to closely scrutinize not just your business strengths but also the areas to improve for next time.”

Of course I would be remiss not to highlight the two awards that Shock Consult sponsored (Boutique Salon and Classic Salon of the year) and congratulations go to the winners of these, Do.Hairstyling, Christchurch and So You Hairdressing in Wellington. Congratulations to Mihi and Holly for awards well deserved. I am excited to be able to work with them as part of their prize.

One part of the evening I was particularly looking forward to, was hearing artist Dane Rumble sing a few of his songs. I was surprised then, that he didn’t sing at all! He just played the DJ role… Perhaps that’s what’s in vogue these days and so my (only slightly!) older understanding of these things could be a little behind the times. The constant thump and bang of the music was a fitting time for me to exit gracefully and leave the bump and grind to the younger, more appreciative audience.

Each of the awards presented during the evening recognised the passion and hard work of people in our industry. It is this undying passion that makes me confident to say that our finalists had the courage to pursue their dreams. I left after an exciting, fun filled night of celebration and pride. It was a tremendous success and I felt that my vision is shared with industry professionals who continue working hard to reposition the hairdressing industry as a respected profession where talent is recognised, nurtured and rewarded. And this is the type of journey I would not want to miss; I’m looking forward to next year’s awards already.

Sponsors of the Evening were… Kitomba, NZARH, HITO, Telecom, Schwarzkopf, Shock Consult


My Weeky Collection of “Have You Thought Abouts”

Malcolm | December 18th, 2010

Have u thought about?

There’s often a big divide between people who need to be helped and the people are ready to be helped. Which one r u?

Have U thought about?

How to calcualte GST content of a GST (15%) inclusive amount, multiply the GST inclusive figure by 3, divide by 23.

Have u thought about?

Sitting in your salon reception as a client and looking at what they look at, are changes needed – decor? cleanliness?

Have u thought about?

Making better use of your business card, is your back blank? fill it up with useful info or your point of dfference!

Have you thought about?

What goals you are setting for 2011 to make it your best year yet? Go On Pick 5 BHAGS (Big Hairy Audatious Goals)

Have you thought about?

Creating a marketing plan for 2011 that is based on what you want to achieve in your business for 2012? PM me 4 help

Have you thought about?

Checking your financials more often than once a year after your accountant has done your books? Weekly? Fortnightly?

Have you thought about?

It takes repeating a task or action at least 21 times before it becomes a habit! Good & Bad

TUYZFM6QQ54Q

Have u thought about? There’s often a big divide between people who need to be helped and the people are ready to be helped. Which one r u?

15 hours ago via Ping.fm · · · Promote

Shock Consult

Shock Consult Have U thought about? How to calcualte GST content of a GST (15%) inclusive amount, multiply the GST inclusive figure by 3, divide by 23.

Wednesday at 07:01 via Ping.fm · · · Promote

Shock Consult

Shock Consult Have u thought about? Sitting in your salon reception as a client and looking at what they look at, are changes needed – decor? cleanliness?

14 December at 07:58 via Ping.fm · · · Promote

Shock Consult

Shock Consult Have u thought about… making better use of your business card, is your back blank? fill it up with useful info or your point of dfference!

13 December at 07:53 via Ping.fm · · · Promote

  • 2 people like this.
Shock Consult

Shock Consult Shock Consult home page welcome video
http://shockconsult.com/

11 December at 09:21 · · · Share

Shock Consult

Shock Consult Have you thought about? What goals you are setting for 2011 to make it your best year yet? Go On Pick 5 BHAGS (Big Hairy Audatious Goals)

09 December at 09:22 via Ping.fm · · · Promote

Shock Consult

Shock Consult Have you thought about? Creating a marketing plan for 2011 that is based on what you want to achieve in your business for 2012? PM me 4 help

08 December at 13:27 via Ping.fm · · · Promote

Shock Consult

Shock Consult Have you thought about? Checking your financials more often than once a year after your accountant has done your books? Weekly? Fortnightly?

07 December at 13:30 via Ping.fm · · · Promote

Shock Consult

Shock Consult Have you thought about? …
It takes repeating a task or action at least 21 times before it becomes a habit! Good & Bad

Have u thought about? There’s often a big divide between people who need to be helped and the people are ready to be helped. Which one r u?

Have u thought about… making better use of your business card, is your back blank? fill it up with useful info or your point of dfference!

Have you thought about? What goals you are setting for 2011 to make it your best year yet? Go On Pick 5 BHAGS (Big Hairy Audatious Goals)

Have you thought about? Creating a marketing plan for 2011 that is based on what you want to achieve in your business for 2012? PM me 4 help

Have you thought about? Checking your financials more often than once a year after your accountant has done your books? Weekly? Fortnightly?

Have you thought about? …
It takes repeating a task or action at least 21 times before it becomes a habit! Good & Bad


Is your Salon/Spa’s ‘Internal Marketing’ letting you down?

Malcolm | April 13th, 2010

One of the most common requests I get from clients is to give advertising help. They say that they need to do marketing and can I help them with an ad? I generally answer “sure” and then ask some questions like, what’s your budget? Where would you be advertising? Why do you want to advertise? What goals have you worked out for the results you want to achieve? These are just some initial questions that need to be answered before advertising can begin. Most people haven’t thought about the answers to these, or even any other questions that need to be answered when considering advertising.

It comes down to what people want is not necessarily what they need when it comes to advertising. What most people I talk to need, is to have answers to questions that they do not yet know to ask themselves. Additionally, advertising is just one aspect of a marketing plan that a salon must have – and marketing starts well before any advertising gets underway.

What I mean by that is marketing is all about what you do, how you do it and how you look and behave whilst doing it – from a salon perspective as well as the individuals within the business.

Most salon owners are trying to gain new clients and some are successful in doing so… but I can guarantee that they are they losing the very same client (or a great number of them) that they spent money on to gain because their salon performance was not up to par. Did you know that someone who visits your business is a customer, even twice… a customer… only when they return for a third (and subsequent) visit can you start calling them a client. Unfortunately many salons are in the business of attracting customers and lose them because of their ‘marketing’ within the salon.

So what am I revealing here? Well – Marketing comes before advertising and part of marketing is how you present your salon to your prospective client. Get it right inside your business and you stand a much better chance of securing a long term client than just a fleeting visit by a customer.

If you are currently feeling harried, stressed, worn out and just plain drained when it comes to your salon, I can bet that your salon will reflect that feeling and so will your team (although at a lesser level) – from how it looks through to how clients are treated, in fact its total performance will be under threat. When was the last time you went outside and looked … I mean really looked at your salon, from a prospective clients view? Is it the image you want it to be? Are there lights that don’t work? Is your signage looking old and tired? Are the windows clean? Ask yourself would you walk through the door of this business and trust the people inside with your hair? If not fix what is wrong with the picture as soon as you can, if yes, then what is the reception like? Does someone greet you immediately with a warm welcoming smile? Are you looked after during the visit? Do you get an experience that you would want to come back and experience again and again or do you just get a haircut/beauty treatment from a disinterested operator?

I could continue here with many of the small (and sometimes large) critical mistakes salons are making every day in their salons and not even realising that it is this that is causing either their very own minor or major recession within the business. However I am sure you are aware of at least some of the areas you are underperforming in. The whole purpose of this article is to give you a wakeup call and help you understand that your Internal Marketing needs to be right before trying to attract new clients, and only getting customers. When was the last time you did an internal audit of your salons appearance, client care systems, staff training programme and management efficiency and effectiveness? If it was ages ago (or never!) then it’s time now to review and if necessary to revamp and rev up your business for keeping clients that your advertising is working hard at to attract.

In fact – have your internal marketing working well and you generally will not need to do extensive external advertising, as the continual flow of new clients through recommendations will keep your salon busy and buzzing for a long time. So take time now to review your salons performance and make those changes for the better. Better client experiences, better staff motivation, better revenue and better profit. Oh and also a much less stressful day, week, month and year at work for you.


One Kick Butt Fact you need to know as a Salon Owner

Malcolm | December 24th, 2009

You know – it struck me as I was sitting waiting for friend to have a drink with that at 4.15 on a Thursday afternoon there are literally thousands of potential clients for salons walking around.

How did I figure this out? Simple really, I just looked at their hairstyles and thought WOW, how much better that lady would look if she cut her style shorter, or longer or asymmetric or added colour… then I wondered to myself, what is her hairstylist doing to her. I bet she gave up a long time ago suggesting a new look, maybe because a client a long time ago said no to her, and mores the pity because one day that lady (and the thousands of others) will get bored (if she’s not already!) with her hairstylist and will probably go to another salon for a change of style, and she will do this because she will assume her current stylist cannot do ‘other styles’ than what she has been doing for years, if she could she would have suggested it… wouldn’t she?

Are you a Hair Salon Owner that doesn’t see the value in communication training or doesn’t make the time available to teach your team how to look after their clients? Are you watching your stylists let clients just go off to other salons to be pampered and cared for? If so what do you do? what do you think? do you do anything? do you want to do anything?

The truth is most clients will not move on if your team look after their emotional needs, as well as their hair needs.

So today’s One kick Butt Fact is: Your clients will not always wear the same hairstyle, I mean gee, do you or any of your team? I bet not, in fact you probably change it at least 3 or more times a year… or a week! So, why do you let your Stylists produce the same old styles week after week? Train them to offer change and watch your clients glow whilst watching your profits grow.

Time to get off the boredom wheel and kick some butt with new styles and ideas for all your Salons clientele, your clients will love you for it and reward you with increased spend and loyalty.

Click Here to sign up for my Monthly Newsletter Salon Biz Tips and get FREE copy of my book  ‘7 Mistakes Salon Owners Make that Chop Away at Profits (and sleek techniques to solving them)


How Different is your Hair Salon or Beauty Clinic/Spa? What makes you different from everyone else?

Malcolm | November 22nd, 2009

What makes a potential client decide to come to your salon or clinic as opposed to your competition down the road? What makes you stand out from the crowd? What’s your USP? (Unique Selling Proposition), What makes you different to them?

Have you ever thought to ask: “Why should a customer come to us? What makes us different? What are we doing that’s specifically different to my competition?”

If you don’t know, then it’s time to find out…

Try this for your next staff meeting:
Ask your team: “What 3 things do we do at our salon that is different and unique to all the other Salons in our area?”

And if you can’t think of any, try this it works for Hair, Beauty or Spa:

“What 3 things could we do that is different and unique to all the other Salons in our area?”

Brainstorm this for about 10 – 15 minutes, remember the brainstorming rules: no idea is a silly idea.
Write everything down. Then take 2 or 3 of the best ideas and expand on them. Let them evolve, what more could we add to improve upon them.

Example:
USP for a Hair Salon:
We give every client a chair massage at the basin with our massage chairs…

Expanded upon this:
We guarantee a minimum 3 minute scalp massage or your service is free… (Use a salon timer to time this and give it to your client to hold)

This would be a very simple yet powerful USP, how many times have you heard your client say the scalp massage is the best part of their visit and it was not long enough? And how many times do you rush through this part of the service because you are running late? Remember a relaxed happy client is a spending client. Allowing extra time to do this should increase your retail sales, providing you are recommending products for home use.

Whatever you come up with, take the best idea and use it in all of your marketing to let every potential client know why they should come to you and your salon and not your competition down the road.

Click Here to sign up for my Monthly Newsletter Salon Biz Tips and get FREE copy of my book  ‘7 Mistakes Salon Owners Make that Chop Away at Profits  (and sleek techniques to solving them)


Business Systems

Malcolm | November 15th, 2009

Its amazing to me how many business owners spend hundreds and sometimes many thousands of dollars on creating and establishing lots of systems around the running of their business in the hope that it will make “life easier” and then find once the money has left the bank account that the system doesn’t work… the news for them is that “Systems don’t run businesses… People run the systems” and that allows the business to run more smoothly. When business leaders realise that the investment they make in creating a system is worth investing again in staff training and education on how the system should run, why it was created in the first place and what benefit it is to the individual staff member, the customer and finally the business as a whole, only then will it be a smoother road to efficiency and longer days in the boat fishing for business owners.

I am working with a business owner at present who is just realising that the investment in staff training is just that… an investment, which is something that he should expect a return from… and to this end, his investment is being repaid many-fold with more motivated (trained) staff who he can rely on to do the job whilst he concentrates on driving other aspects of his business. His words: “It is an obvious part to business, but sometimes it takes someone to point out the obvious and thanks to Malcolm doing just that, I am now on track with my targets”.

So Do create and devolp Business Systems and DO schedule and budget for staff involvement and training if you want the system to be worked as you envision it.

Click Here to sign up for my Monthly Newsletter Salon Biz Tips and get FREE copy of my book  ‘7 Mistakes Salon Owners Make that Chop Away at Profits (and sleek techniques to solving them)


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