Productivity vs. More Clients

By Scott Missad and Frank Gambuzza | 05/03/2012 10:08:00 AM

 

Frank Gambuzza and Scott Missad. For a salon business, continually gaining new clients is important, but the simplest, cleanest, most profitable way to really grow your company is to maximize your existing client base. When your current client base participates in more of your service and retail offerings, that’s productivity.

Unfortunately, too many salons operate under the old beauty school wash-andset mentality that dictates the only way to make more money is to speed up your services and jam more people in the door. Too many salon owners don’t consider the extra cost that comes with servicing those extra bodies—whether that’s in hiring and training more staff or the utilities used to provide more services or in the building out of more salon space. And, continually cramming more and more clients into your operation just isn’t a sustainable business model—eventually something’s going to break down, either the quality of your service is going to erode and your clients will disappear or you and your staff members are going to burn out.

When we’re talking about productivity, we’re talking about giving your clients an experience they can’t get anywhere else and charging them extra for it, because people will pay for the experience.

The Value of Productivity

The simplest way to show you the value of productivity is to boil it down to the actual dollars it could mean for your business. For example, let’s say your salon sees 2,000 clients per month. What if you could get each one of them to spend an additional $4 average per month by either purchasing retail or additional services. Not too challenging, right? That would mean an additional $96,000 in sales per year for your salon. And, you added that without the expense of building out your salon or adding and training new staff.

If you have the proper infrastructure in place to provide a quality experience for your clients that allows you to charge more, two things are going to happen. First, you’ll be a more profitable business because you’re more productive. But second, you’ll also be more sustainable. As your top clients try more services in the salon or spa areas of your business, they will become familiar with different service providers, so now their loyalty subtly shifts from the individual to your business. Gradually you are taking them out of the market for another salon or day spa.

The other interesting caveat of focusing on productivity is the better you take care of the clients you have, then the process of getting new clients takes care of itself because your clients talk about you to their friends and family.

Locking Up the Loyalty

The simplest way of turning your clients onto new services or products in your salon is to gift it to them the first time. For example, during the holidays, instead of giving your top 100 clients a gift card to a local restaurant, gift them with a service you know they’ve never had before. Or reward your top salon clients who you know have never visited your day spa with a manicure, pedicure or mini-facial.

This also is a very good strategy for measuring the value of a new service or product you’re considering adding to your menu. If you sample or give it away to a core group of your trusted clients, you can measure how many come back and pay full price for it. It’s a way to measure the value of the service to your specific marketplace or test a specific price point.

To see how gifting a service can work toward the bottom line, let’s look at a specific example from Salon Visage in Knoxville, Tennessee. (Frank Gambuzza’s salon.) During a specific time period, for every single process color service that was booked, service providers offered to upgrade clients with a face-framing packet of highlights at no additional charge, by saying something like, “Susie, it just so happens that today, and today only, I’m willing to upgrade you from a single process with some face-framing highlights that I think will be a little bit more personal for you and will bring out the color in your eyes. I’m willing to do that today for no additional charge, but if you have this done in the future, it will cost $50. Would you be interested today at no additional charge?”

During that time period, approximately eight out of 10 accepted the face-framing complimentary offer, and of those, 50 percent came back and purchased the highlights at the new rate. Over an 18-week span, it equated to about 400 clients converting to the new service and an additional $100,000 in revenue without adding any new clients to the salon’s roster.

Related Articles and podcasts:

The Profitability Project

The Profitability Project: Brand Vs. Individual

Stacey Soble with Frank Gambuzza and Scott Missad

 

 

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