The Profitability Project: Brand Vs. Individual
There’s a historical paradigm when it comes to salon profitability—most salon owners believe if they simply get all their chairs full and do everything humanly possible to keep each of their individual staff members happy, they’ll be successful and profitable. But if they’re compromising on the business’ guiding principles to keep people happy, then they’re not focusing on their salon brand, and that leaves them vulnerable. Usually when leaders are avoiding conflict at all costs, they end up taking actions that aren’t good for the overall business.
Your salon brand is bigger than the individual, and your brand is what should attract your clients. Think of your favorite restaurant. If the head chef leaves, do you follow him to his next job? Or are you loyal to the restaurant?
Let’s take a closer look at the difference…
CLICK HERE to listen to the podcast interview with Scott and Frank. Note to listeners: See the end of this blog to see Frank's final point!
Most owners got their start in someone else’s salon. They leave to open their own salon and they take a handful of people with them, with the belief that things are going to be different. But the only thing that ends up any different is the décor. The salon is the same, because the personalities in it are the same.
In the absence of an overall brand, there is no intentional consumer experience, and as the salon grows, the personalities within it change and the salon product will change. In this environment—and we see it every day—the owner is so consumed with trying to protect what they’ve got and trying to survive, that they end up compromising their principles and avoid conflict to keep individuals working in their salon happy. Overtime, this creates an inconsistency in service and hurts the image of the company.
It’s easier for these owners to hire established stylists with full books, even if the new hires come with a host of other problems. It’s easier because the owner doesn’t have a process that develops new people and a career path that helps them achieve success.
It’s easier for these owners to keep a number of different product and color lines in stock because the different individuals in their salon prefer working with different products.
It’s easier for these owners to grant the commission rates their stylists demand. It’s easier because they haven’t created a system that measures each service provider’s performance and shows them how to grow their own results.
In this situation, salons end up with a world of prima donnas. Prima donnas aren’t born, they’re made. Owners make them because they’re so afraid that the day they say no, the stylist will throw a fit and walk out the door.
In this environment, you end up with a salon that is a house of cards. A salon that is one walkout away from closing its doors.
Managing the Brand
Your greatest chance at building a salon company that is predictable, profitable and sustainable is running your salon as an organization.
When owners run their salon based on the brand, they form a belief system, and they make conscious, strategic decisions and develop processes that support the guiding principles of the company. Over time, the people working within this salon may change, but the overall experience for the consumer will remain the same.
To manage the brand:
First, you have to know what you want your business to be. What are you striving to become? Who is your target market? What is the experience you want to create for each client? Start with the framework of what you want your salon business to look like.
Next, make sure each of your actions match your rhetoric. Are you enforcing your dress code? Do you have a clear pricing structure in place? Are you creating a brand experience for the consumer that is bigger that just the service that they receive.
Then, when your hire people, carefully explain your brand, your philosophies, your processes, and your expectations. Ask if they want to be a part of it.
Sidenote: There’s a general assumption that as you get better as an organization, then the individuals in your organization are getting jerked around. But that’s not true. What you’re really creating is an ‘everyone wins scenario’—the better the organization you create, the better the revenue that comes in, the better the earnings for the company and the better the benefits for everyone involved. In commission-based salon, it’s a mathematical impossibility for the company to grow at a rate that is higher than the compensation of the service providers. That’s why the brand is so important.
Brand in Action
Meet two of our Strictly Business graduates, Jody Mason and Daniel Jones of Muse Salon and Spa in Alpharetta, Georgia. When they came to our session, they had a very cool, artsy space, and they were doing a lot of volume, but they weren’t as clear on where they were going or how they were going to get there.
“When we started our business, we had a perception of what we wanted it to be, but the class reinforced that things had to change in order for us to survive,” says Mason. “We had started at a salon that paid 37% commission, then we moved to a salon that paid 50% commission, but whose structure was a real mess. When we opened our own salon, we started with a 50% commission scale, We got it all laid out, talked to our staff and changed the pay scale to start at 45% and moved up incrementally based on performance. Now the system is fair, people know what they need to achieve to move up, and earning a raise means a lot more to them.
“In the last four years, we have created an environment in the salon in which the brand was directly related to the quality of the work performed, the level of customer service, and the professionalism our the service providers,” says Mason. “We have 30 employees, and while sometimes we may have to encourage someone to be focused on the ideals we’ve put in place, it usually isn’t difficult to show people the advantage of focusing on the Muse brand instead of their own agenda.”
According to Mason, here’s some ways Muse is different:
Focus: “Our main mission, other than great customer service, is to focus on how many clients we each are taking care of each day, how much each client is spending on services, what retail products each is taking home to maintain their look, and how many are pre-booking their next appointment.”
Encouragement: “We encourage each staff member to look at their own little spot in the salon as their own small business with the same goals for each of their clients. It keeps everyone on the same page.”
Clear Coaching: “For quarterly evaluations, honest, open communication is vital. If they are falling short on our ideas of how they are representing the brand, we make them aware of it. Then, we coach them to get things going in the right direction.
Reputation: “One thing that speaks to the brand we have created—not only in the clients’ eyes but also for the beauty professionals in our area—is the amount of interest there is to work at Muse. We never advertise for employees, but constantly have interest based on Internet reviews, involvement in community service and events, marketing on social network sites and interaction with our local beauty schools.”
Stability: “We have little to no turnover. When people get settled into our way of doing business, they just stay. We feel that says a lot about how we run the business.”
FRANK'S FINAL POINT: In the podcast, we lost Frank Gambuzza on the call before he made his final point, but he later called in, because he wanted to make sure it was included. According to Frank: "The caveat of developing a clear brand and developing a system to manage your business is that in the end the staff sees this as a fair system. Before there is a system in place, raises and promotions are made on a case by case basis and can be viewed as an owner playing favorites. But when there's a clear system in place, it's fair across the board, and now if they don't perform to the level of winning, they no longer see it as losing."
For more information and a schedule for Strictly Business, the live education seminars by Scott Missad and Frank Gambuzza, contack Julie Oeffling at 800-718-5949. CLICK HERE for more information about the Profitability Project.