Salon software goes beyond inventory control to help you ring in consistently strong retail salesâfrom decoding marketing strategies to motivating your staff to sell.
Itâs retailâs turn. Finally.
Automation came to the salon industry not only late but little by little. Now, with the rest of their administrative tasks largely computerized, salon owners are ready to clear the brush on the final frontier of business operations. That would be retail.
âNine times out of 10, inventory management is the very last thing people automate,â says Jon Maple, CEO and president of Salon Transcripts. âFirst itâs payroll, then marketing to clients, then the appointment book. But retail inventory is where all the money is.â
Retail software has been around as long as other programs but, like everything else about retailing in the salonâmerchandising, benchmarking, staff trainingâit gets no respect, to channel the late comedian Rodney Dangerfield. Maple has fought this tendency since 1991, conducting a class in reaping the benefits of his STX programâs retail capabilities, while Milano Software President Paul Pagliaro observes, âMost people use only 35 to 40 percent of the applications their software offers, and retail and inventory are high on the list of applications they donât use.â
Matthew Scudder, operations manager for Harms Softwareâs Millennium family of software products, now notices an awakening in the industry. âThereâs been a huge paradigm shift in the mentality of salon owners,â Scudder comments. âOwners want to know all sorts of specifics about retail sales. Theyâll say, âshow me people whoâve had a facial but have never bought a product,â and the software becomes the heartbeat of the business.â
While it may be coming through the door last, the tail may indeed end up wagging the dog. Thanks to smart software, the ideal service/retail ratio of 70/30 may at long last become attainable for the average salon.
âSalons earn seven percent for services on average but 35 percent on retail,â notes Valerie Reavis, marketing manager for Shortcuts Salon and Spa Management Software. âSo anyone interested in profitability should be paying close attention to retail.â
Often ownersâ first area of retail-minded attention is inventory. With increasing sophistication, software is transforming traditional inventory control (simply policing quantities needed to stock shelves) into true inventory management, a distinction Maple says is pivotal in gaining a retail edge.
Inventory management is more complicated and varies from program to program. For example, STX software breaks down retail sales into four percentage categories, listing products that account for 60 percent, 20 percent, 15 percent and 5 percent of total retail sales. Maple sees too many salons ordering extra inventory in the last category, even though those products account for such a small piece of the pie. Until Maple runs the reports for salon owners, they typically have no idea theyâre tying up their money in slow-moving items. Meanwhile, all of the older products are losing potency on the shelf and often baking in the sunlit window.
âItâs the old 80/20 rule,â he says. âUsually 20 percent of your products are generating 80 percent of your money. You should be basing your minimum quantities on sales history. Otherwise itâs just haphazard.â
Pagliano explains that a good way to forecast what will sell best in your salon in the next two weeks is simply by looking at what sold best in the past two weeks. Milano Retail Software calculates any change in the period that you designate and automatically recommends quantities based on the productâs âgrowth factor.â
Newer software programs focus on the other end of the spectrum, too, helping you identify your poor sellers. For example, Harms offers the Slow-Moving Inventory Wizard. If looking at the numbers convinces you to drop the product altogether, with a push of the button you can ask the âWizardâ to price the item at a discount and, eventually, faze it out.
Responding to a user request, Harms recently added a program that monitors how many people bought an item once, how many twice and so forth,â Scudder explains. Those figures can help you plan a promotion or determine whether people who use the product once are likely to purchase it again. >
In addition to addressing the decision-making and strategy, software can aid in the mechanics of ordering the products. Milanoâs program sets up an SKU code list identical to the distributorâs list.
âThe systems can talk to each other,â explains Pagliaro. âThe product number is the same; thereâs little room for error and salons start off with accurate inventory and coding. Then the salons place their orders electronically, leaving the distributorâs sales consultant plenty of time to truly consult and educate instead of spending all of his time in the salon writing up the order.â
Elite Software further relieves distributor sales people of having to inform owners of price hikes, because it compares the previous cost of product with the current cost. âOwners donât have to go through invoices to figure out that the price has gone up,â notes Brad Mace, sales manager of the companyâs Salon & Spa Management software.
And they donât have to guess about theft and loss. Itâs pretty obvious that something is amiss if the computer indicates that you should have more product than you see on the shelf.
âBeing able to access inventory information in a quick report is very important,â says Kirsten Hall, director of marketing for The Neill Corporationâs SalonBiz software. âThe owner may see no hairspray on the shelf and assume that the salon is selling a ton of hairspray when really someone is stealing it!â
Owners arenât the only ones who have it easier with retail software. What client wouldnât appreciate a speedier, more accurate checkout process made possible by software that reads the productâs bar code?
Many programs also work hand-in-hand with a salonâs âfavored clientsâ loyalty club. Clients are more likely to sign up for such programs when everything is computerized and runs smoothly. âOur salons can establish a client loyalty system that automatically awards points for spending a certain amount of money at the salon,â Maple says.
But the beauty of tracking the clientâs every move is really about target marketing, and in-salon marketing is part of the fabric of every software package. SalonBiz, which tests its software in real salons run by The Neill Corporation, uses âThe Traveler,â a hardcopy list generated for each client that travels around the salon with the customer.
âIt includes the appointment history for that day and a product and service purchase history,â Hall says. âThe stylist can say, âI see youâre probably out of your favorite shampoo, so Iâll have a bottle waiting for you when you leave,â or âI see youâve never purchased a styling product, so Iâd like to introduce you to one today.ââ
The front desk is an important component in maximizing retail sales, explains Catherine Renaud, president of Software Creations, which rewrote its longstanding software program in order to offer the Virtual Salon and Spa as a web-based, touch-screen package. âOur Recommend Retailing Systems creates a tag team comprising the front desk and the technician on the floor,â Renaud explains. At each visit, the system issues a paperless âticketâ that lists every product the technician used that has a retail counterpart. Because it removes any responsibility for selling from the technicianâs shoulders, the system is popular with stylists and estheticians who cringe at having to sell. Plus, that âtag-teamâ approach can increase retail sales by 20 to 30 percent, according to Renaud.
To easily log products on the sales ticket, stylists can each carry a PDA (personal data assistant) that talks to the software system. Salons also can install one or more workstations for technicians to use.
All of the recommended products become part of the clientâs history. Those that the client does not choose to purchase go into a type of ârejected productsâ category that may be useful to the stylist in future visits. For example, Renaud explains, âThe technician can review the clientâs purchase history and say, âI see that your color faded a little. Remember I recommended these products? You might want to think about it.ââ
Outside Marketing and Promotion
Between appointments, your marketing machine can continue to run at high speed. Any software program worth its salt can pair your selected set of demographics with a targeted product history and send, for example, a Motherâs Day color shampoo and conditioner promotion to every client in your database who is a mom, has had a hair color service within the past six months and has never bought a color-safe shampoo at the salon.
âYou should be able to customize an e-mail and table promotion that identifies all clients whoâve purchased your leading line in the past three months,â Pagliaro notes. âWhat if you bring in a new line of color shampoo? Identify all clients whoâve had a color service within the past year and market first to them. How about a new high-end line? Go into your e-mail and promote only to clients who spend over a certain dollar amount.â
To that end, Shortcuts offers a âSet and Forgetâ feature. âWe sit down with salon owners and go over all of their promotions,â says Reavis. âWe set it up so they can do e-mail, text messages, post cardsâwhatever they decide. Then when Valentineâs Day rolls around they donât have to do anything; the postcard template, e-mail or text message theyâve chosen goes out to all the women 35-50 within this zip code who have had skin care services.â
All of this is opt-in marketing; the client must agree to be contacted. âShortcuts has options that say, âDo not e-mailâ and âDo not text message,ââ Reavis says, adding that salons should be specific when they ask clients how they want to be contacted about promotions.
If you confirm an appointment by e-mail, SalonBiz can make that double as a little marketing piece. âYou can mention any event or special,â says Hall. âItâs HTML-compatible so it can look cool with photos, images and different fonts.â Hall adds that her companyâs WebBiz feature provides both online booking and e-commerce, enabling the salon to promote retail products to someone making an appointment or purchasing a gift certificate.
Staff Training and Motivation
Even when weâre talking about technology and hands-free operation, so much of success in the salon still depends upon personal interaction. Software companies address this by building staff motivation right into their systems.
âYou can set up commission programs to motivate your staff to sell more,â comments Mace. âFor example, you can have a stylist receive a five-percent commission if she sells one product per day and a seven-percent commission if she sells two products a day.â
Pagliaro recommends setting retail goals both for the entire business and for each staffer. âTrack your goals weekly, not monthly,â he advises. âIf you track monthly, you have less opportunity to make changes if necessary. Tracking weekly lets staffers know they need to do better next week. Weâve seen that this works.â
Goal setting, however, can take place just once a year. âFill in 19 numbers in our software, and that will give you a daily target for both service and retail for the year,â Pagliaro explains. âBut in all cases, make sure their retail performance is frequently discussed.â
Itâs the old saying, âWhat gets measured gets done,â agrees Renaud. âOur software tracks how many clients the stylist saw, how many of those clients were recommended retail products and then how many of the recommended clients had those sales close,â Renaud says. âThis allows your staff training to be very targeted.â
Reavis suggests programming your goal-setting in units rather than dollar amounts. âStylists can visualize bottles,â she notes. âPercentages and ratios are the worst way to introduce the concept; you can develop that culture, but it takes time. At the beginning, have your staff aim that for every two hair cuts they do, they will sell one bottle. Now theyâre applying retail to something they can relate to.â
Leadership always counts in the salon industry, and so it is with retail: Itâs probably more critical for the owner to master the retail software system than for anyone else on staff. Notes Scudder, âA âpower userâ still uses only 60 percent of our system.â
And before you know it, there will be more to learn. New developments are surfacing all the time to drive business growth. Many are salon adaptations of advancements that have shown success in other retail venues.
âAs online booking increases, I can see retail being more available online,â forecasts Mace. âThe client could order the products at the time of booking so that everything is ready when she checks out.â
Other forms of self-service may also be on the horizon. Software Creations already has a kiosk in place at some salons that lets clients input their own information into their client profile. âWhen they do it themselves, the information goes in correctly,â says Renaud. âThis is a forward-thinking opportunity that makes a salon look high-tech and professional.â
Renaud also predicts that PDAs for stylists will become commonplace. The latest innovation in that regard is the PDA equipped with a credit card slide and a receipt printer. Renaud notes, âToward the end of the day, the front desk staff can walk over to the remaining clients and say, âIâll ring you out right now so that you wonât be rushed and your stylist can take her time finishing.ââ Another method implemented by one of Renaudâs salon customers has a concierge walking from station to station with her PDA and inputting what the stylist is recommending so that the stylist can seamlessly continue educating the client. Meanwhile, salon owners have enough going on with todayâs technology that Pagliaro reports Milanoâs accounts increasing retail by an average of 29 percent the year the salon begins using the softwareâs full capabilities.
âThe stylist knows the client, knows her hair and has the product knowledge,â says Pagliaro. âAll of the softwareâs components, together with the stylistâs expertise, will help to retain the sales within the professional industry. When salons can maximize sales and maximize the productivity of their space, everyone wins.â
More than inventory-control, these sophisticated software programs are a smart (and headache-free) way to manage your salon.
Elite Salon and Spa Management
This software from Elite calculates sales transactions, appointments, inventory updates and client histories. It also provides marketing payroll and financial reports.
Korvue by Verasoft
With Korvue XL, salon and spa clients can book appointments online, review their account history, update credit cards and more.
Use this software to help build client loyalty, increase average ticket cost and track every penny on a day-to-day basis.
This training collection from Harms Software consists of three components: a set of 10 education DVDs, eight workbooks and a master key bookletâall are designed to educate users an all aspects of the software.
This program allows you to send customized letters and gift certificates with your personalized offer to new residents in your area.
Your service staff can use the information accessible through SalonBiz (client birthdays, favorite cuts, color formulas, etc.) to build relationships and personalize each guestâs experience.
STX Salon and Spa Management Software from Salon Transcripts features online appointment booking, POS, sales and inventory tracking, payroll and client marketing.
Salon and spa owners can choose from three different programs (Xpress, Salon and Enterprise) depending on the size and scope of their business.