Luxuries are often the first to go when the economy slumps, and personal pampering is often in the luxury category, but not so for the many people who deal with stress not just in their personal lives but also with things that are happening around them, such as the possibility of losing a job due to overseas competition or the rising cost of living due to economic policies of the government.
So when you are seeing your profits decline, perhaps either by how the economy performs as a whole or perhaps from a new competition across the street, how do you coax your profits to go up? Certainly, you can’t just adopt a ‘wait and see’ attitude and hope that everything unfolds in your favor; you have to take active steps to ensure that your books remain in the black. Here are a few key actions you need to take right away.
Build your client base
Salon owners are often knee-deep into working hard to build their reputation and brand, and so often overlook problem areas that could need intervention before it's too late. The first, but by no means the easiest, is to build their client base. The reputation earned through hard work is just the first step, and you as the owner of that brand can increase awareness by getting into joint ventures with (non-competing) businesses that have similar target markets. Perhaps you can strike a partnership with a local gym, and create a promotional program that will benefit both your clients wherein membership in one will lead to discount privileges in another. Of course, this could be done on top of the usual client referral or ‘bring a friend’ program which is good marketing practice to start with. Don’t forget that social media has a large role to play with building your client base, so allocate time and personnel resources for that as well.
Make existing clients feel more special
You know what they say about existing clients: 20% of them provide 80% of your revenue. While the numbers may not necessarily be the same for everyone in the salon industry, that figure highlights the need to retain existing clients by adding value to their experience. Maybe you can add a plush reading space in the waiting area, or a cup of tea after every massage. Well-scented and well-designed area can also leave pleasant impressions not only with your new clients but also with your existing ones because you mentally prepare them for the pampering they are about to receive. Some clients need to have that psychological separation from their usual 9-to-5 for them to thoroughly enjoy a relaxing session.
You may also want to take advantage of the existing partnership you have with your suppliers. Ask them for freebies to be given away to your repeat customers. The freebies will not only strengthen your goodwill with the older clients, they will also introduce the brand of your supplier to a potential market, so it’s both a win-win partnership.
Update your retail space to look 'active'
So often, salons just put up products in a shelf as though they are for the sole use of the staff and not for purchase by customers. To 'activate' your retail space, place it in a strategic area where it can 'talk' to the clients about the products you offer and their corresponding benefits. A custom-built shelf aimed at the client is a good way to start. You can also train your staff to upsell services that you have placed in your shelf so your clients will know that apart from extending service, you also offer products. To make prices competitive, take advantage of your bulk orders from suppliers and request for a much lower price so you can mark up your products at just a little bit above similar products found elsewhere.