As the economy continues to waver, well-intentioned experts and influencers everywhere are sharing tips and best practices to recession-proof your salon. Just one problem: many of those tips and best practices won’t recession-proof your salon. Some may even do more harm than good.
Now, does that mean you should do nothing and hope for the best? Of course not. Salon owners should always be taking proactive steps to enhance their client experience, retain their best stylists, and operate more efficiently. That’s true in good times and it’s especially true when there’s uncertainty.
But there’s a big difference between taking strategic, targeted steps to strengthen your business and hastily taking arbitrary steps that will allegedly recession-proof it. The former will just about always pay dividends. The latter, rarely. With that in mind, let’s walk through some of the most common recession-proofing tips that you’re better off ignoring, and outline what you should do instead.
Don’t: Focus on trying to recession-proof your business in the first place.
Instead: Focus on nurturing that which makes your salon special.
For starters, it remains entirely unclear whether the global recession we’ve been hearing about for months now will ever materialize. The data is murky at best. What’s not unclear is that whatever is happening right now on a macro level, the self-care industry has proven incredibly resilient. An analysis of data generated by users of the Boulevard platform shows that salon revenue and visits were up 24% and 25% respectively in 2022 (and the early returns in 2023 continue to point toward double-digit growth).
In other words, as it pertains to salons, talk of a full-blown recession is likely overblown, and even if you were to concede that it’s not, what does recession-proofing even really mean? As a salon owner or manager, your time, energy, and resources are far too precious to expend on an amorphous concept that may or may not be achievable. They’re far better spent focusing on that which has real value – differentiating from the competition by nurturing that which makes your salon special.
Maybe your salon provides a luxurious, high-end experience. Or maybe you offer great value for cost-conscious clients. Maybe you’re focused on creating a family-friendly atmosphere. Or maybe you stand out by creating a safe space for underrepresented groups. Whatever makes your salon special, now is the time to lean into it and differentiate. Recession or not, you can never go wrong with delivering a unique experience that aligns with what your clients want.
Don’t: Obsess about booking more appointments.
Instead: Obsess about your average ticket value, retention rate, and lifetime customer value.
When confronted with the possibility of economic turmoil, the understandable instinct is to reach for more. In this case, more appointments. And look, no one is saying don’t book more appointments. By all means, book as many as you can. But don’t let the number of appointments you’ve booked be the entirety of your focus, and don’t chase quantity at the cost of degrading your client experience. If the number of appointments booked is the only lens through which you view the health of your business, you’re overlooking several key metrics that are not only better gages of present-day health but of long-term sustainability.
What you should be obsessed about instead is your average ticket value, retention rate, and lifetime customer value. Track those metrics relentlessly, as strength in those areas will sustain your business through a rough patch far more than will chasing additional appointments. Average ticket value is especially important if you find your repeat clients are coming in less often, either because they’ve become more cost-conscious or because services such as a balayage allow them to go longer between appointments.
Don’t: Obsess about expanding your menu of services.
Instead: Obsess about improving your client experience.
A corollary to the aforementioned instinct to reach for more, many salon owners mistakenly assume that when the going gets tough, offering more services is the answer. Sure, you’re creating more ways for clients to patronize your business, but you might also be creating more overhead and more upfront costs. And you might be stretching to add services in which your clients aren’t all that interested (otherwise, you’d likely already offer them).
Expanding your menu of services can be hit or miss. But you can never, ever (I could say ever indefinitely here and it still wouldn’t be enough) go wrong improving your client experience. There is absolutely no substitute for a great client experience. It is the lifeblood of our industry, and nothing you can dream up will better safeguard your business against economic headwinds. So from the moment someone attempts to book an appointment to the moment the door closes behind them on their way out of your salon, do everything in your power to ensure the experience is seamless.
Don’t: Blindly increase prices.
Instead: Dig into your data to figure out if and where increases make sense for your specific business.
When it comes to raising rates, I’m as big a proponent as you’ll find. Salons shouldn’t be sheepish about raising rates to keep up with inflation and better manage the costs of doing business. Other industries aren’t; ours shouldn’t either.
But arbitrarily raising rates isn’t the answer. A jarring price increase risks alienating even your most loyal clients. So, don’t guess. Instead, lean on your data and reporting tools to better understand how your rates compare with the competition and identify the pricing sweet spot – chances are, you’ve got some room there. (Helpful hint: if your number of visits and staff utilization rate are high but your average ticket value is stagnant, chances are you can comfortably sustain a price increase.)
Then, be equally thoughtful about how and when you communicate your planned changes to clients. If you’re proactive, upfront, and leave ample room for feedback, chances are pushback will be minimal.
Don’t: Only ask, “Where am I spending too much?”
Instead: Also ask, “Where could I be investing more?”
I’m a realist and I understand that when times are tough, salon owners need to be thoughtful about managing (and if necessary, cutting) costs. I’m not saying you shouldn’t assess your spending patterns. But I am saying that you should also take this opportunity to think about where you could be investing more.
If there’s a common thread to everything we’ve discussed, it’s that there’s no better antidote to a troublesome economy than happy clients treated to a great experience. If you need to invest in modernizing your technology stack to create a more seamless check-in and check-out experience, then invest. If you need to invest in training and education to keep your staff feeling happy and engaged (which, in turn, keeps clients feeling the same), do it.
None of this is to say you should refrain from cost-cutting and/or making new investments. But you should be open to considering all options.
Think resilience, not recession.
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