When MINDBODY opened for business in 2001, yoga and Pilates studios represented the majority of our clients. We understood their class-based business model, and our online scheduling software met their needs very well. Through the years, we've brought many new innovations to the software, and as a result, we now have nearly 10,000 clients that now include spas, martial arts schools, fitness clubs, children's programs and salons.
Every industry does a business a bit differently. With each client we've acquired, we've learned the particular industry strategies that client uses to stay profitable. In fact, we've assembled these best practices into an entire curriculum that we share with our clients through MINDBODY University, a mini-business school for the health and wellness industry.
Here are two strategies from other industries that might help boost your bottom line:
The Power of Recurring Revenues
Recurring revenues (a.k.a. auto-pays, electronic funds transfers, membership contracts) are the portion of sales you can count on receiving from month to month, with some degree of certainty. They create a stable cash flow, contribute to client retention, and ultimately strengthen your bottom line. Chris Blades, co-owner of four Charm City Yoga studios in Baltimore area, told us auto-pays have taken his business from "the universe of uncertainty into the realm of steady, fluid income."
Charm City introduced a $40 introductory offer to encourage first-time customers to begin regular regular practice, then sent regular e-mails to those new clients throughout the first month, slowly introducing the idea of moving up to a monthly membership. After implementing the program, Charm City quickly realized impressive gains, including:
- an increase in the number of auto-pays sold from 30 to 91
- growth in auto-pay revenue from 5 percent to 24 percent
- a 53 percent growth in annual revenue from '08 to '09
Auto-pay programs can also be incorporated into the salon business model. Instead of selling ad-hoc appointments or services, create a monthly fee (i.e., membership) for services in that time period. You can offer a facial-per-month or massage-a-month membership, or offer monthly color touch-ups or trims with a retail discount. Or, why not consider offering a monthly blow-out membership where clients can stop by for a professional styling before date nights. Be creative!
For your high-profile clients, you can offer a gold membership with more add-on services and a silver membership for your newer clients. That way, your high-profile clients feel like they're getting the VIP treatment, and you're getting everyone's commitment in advance.
Diversify with Workshops
Many day spas offer group pampering packages, and Pilates studios have teacher training workshops, but have you heard of pole dancing parties? Wendy Traskos, owner of three New York Pole Dancing (NYPD) locations, teaches pole dancing to everyday women as a form of fitness and fun. given the economic climate, she found it challenging to keep new business coming through the door, so NYPD now hosts bachelorette parties and other types of group lessons that women can do with their girlfriends. Traskos says it's become "a community of women who enjoy just hanging out, exercising and having fun. It turns into more than just an exercise class or just a dance class because many of the women become really friendly with one another." Traskos says creating packages that are more appealing to her consumers has been an important part of her success.
So, how might this idea translate to your salon? Consider hosting a two-hour, "How to Do Your Own Updo" workshop, or maybe bring in a makeup professional who can demonstrate the latest techniques on your clients. Can you host a stylist education workshop with area salons and charge a fee, or work with a product educator to do the same? What about group mani-pedi parties? (Now, further imagine if the others salons and your customers could register and pay for these sessions online!)
Special events and workshops will not only create a new source of revenue for your salon, you'll be bringing added value to your existing customers.
Meg McCall is the director of marketing for MINDBODY, a developer of online business management software for salons and other wellness-based organizations. McCall holds and MBA and has a love of writing. Her long-term understanding of other wellness industries offers a unique perspective to salon owners. For more information on MINDBODY, visit www.mindbodyonline.com/salon.
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