10 Simple Ways to Improve Your Salon's Profit Margin
Sure, there are many exceptions—but most salon owners are like artists. They’re passionate about assembling a dream team of talented, personable stylists, demanding about the quality of the product lines they choose to work with, nitpicky regarding the intensity of the overhead lighting and obsessed with finding the perfect models for the posters they hang on their walls. They agonize over the perfect Spotify Premium playlist to play and at what volume, and are likely to have incorporated a bit of Feng Shui when designing the layout of their salon.
Salon owners put a lot of effort and consideration into the space they share with their team, and most importantly, into elevating the quality of the experience for their clients that pay to spend a few hours at their salons. At the end of the day, after all—a salon’s artistic vision has everything to do with building a successful business.
Well, not exactly. When it comes to business, artistic expression usually translates to increasing costs, not improving profits—at least at first. If salon owners want their businesses to grow, they often need to set aside the artistic idealism for a moment and focus on using simple but effective strategies to improve their salon profit margin.
Essentially, the key to artistic freedom as a salon owner is to build a better business. Read on to find out how you can increase your revenue with these ten helpful tips to improve salon profit.
- Revise Credit Card Payment Service Options
Accepting credit cards at your business can be a blessing or a curse—depending on your merchant services provider and the fees they charge for processing your credit card sales. When was the last time you took a look at the contract you have with your payment processing company? If it’s been awhile, you’re most likely paying too much—especially if you’re locked in a contract or haven’t been paying attention to the fees you´ve been shelling out for credit card services. You owe it to your business to read through the fine print of your plan, and then compare your pricing details with other companies to see if switching might improve salon profit.
Start by reaching out to at least two different merchant services providers, preferably companies like National Bankcard that include specialized services for salon credit card processing. Like National Bankcard, the companies you contact should offer low processing rates, free equipment, no cancellation fees, and excellent customer service.
- Make Sure Clients Can Book and Pay for Services on Your Website
You do have a website, right? If you don’t, you’re missing out on a multitude of ways to make more money and dramatically improve salon profit. Your website, when operated correctly, can set yourself apart from the local competition, influence new clients to book services and treatments at your salon, and strengthen loyalty from the clients you already have.
Your website should also be set up to book appointments, sell products, and process payments online. These digital operations are convenient for the customer and will improve your hair salon profit margin and encourage brand loyalty.
Earlier we talked about payment processors and the importance of choosing the right one. It’s also important to note that your company should also be providing you with a range of state-of-the-art services and convenient technology designed to enhance your cash flow and facilitate sales through a variety of channels. Your merchant services account should include not only in-store terminal processing and POS system technology, but it should also offer mobile and online processing payment gateway services as well. Go here to learn more about adding salon-specific payment processing features to enhance your website and improve salon profit.
- Raise Your Prices
It can be intimidating to raise your prices—especially if they’re already on the high side. But raising them even slightly can result in considerable hair salon profit for your business. If you’re nervous about upsetting loyal clients with price increases, be prepared to explain the reason for the hikes--a simple explanation about rising costs and your commitment to improve your salon should be enough to convince any client that the minimal change in price is worth it.
Try planning ahead and organizing a set timeline for increases--say, 3% every quarter on all treatments, products and services. Make sure to explain this decision and the reasoning behind it to all of your staff so that everyone’s on board with the changes. That way, your employees will be prepared to properly explain the price increases to clients that ask.
- Amp Up Your Social Media Game and Get More Clients
Social media campaigns are a must. Facebook, Twitter, and Instagram provide a powerful opportunity for businesses to connect with their customers, find new ones, and promote brand loyalty.
Your business should have active ad campaigns on Pinterest, Instagram, Facebook and Google, as well as business pages buzzing with vibrant images, interesting content, and appealing promotional messages designed to target your client demographics. Take pictures of your clients and post them online—with their permission, of course—and tag them in the images. Use Instagram hashtags to highlight your services, location, and encourage users to mention your salon in their own posts.
- Expand Your Menu of Services and Treatments
As a salon owner, it’s super important to stay on top of new trends and styles for two reasons: one, because your clients will be asking for them, and two, because new treatments and services will expand your repertoire of services offered. The more items on your price list, the more reasons a client will have to book another appointment at your salon.
You should also make sure you’re regularly adding to the list of additional treatments and services to increase a client’s number of annual visits, like alternative conditioning treatments, colorfast therapies and new nail art techniques, to name a few.
- Improve Your Website’s Search Rank on Google
Do you know how your salon website is currently ranking on Google? To find out, do a simple Google search for beauty salons in your city, and see how high your site is on the list.
As a business, you want your website to be as high up on the page as possible. The higher on the page, the more likely it is that a potential customer will click on it and book an appointment at your salon. And the more new clients you can get, the better it will be for your hair or nail salon profit margin.
If your ranking is low, you need to do some work on your website. Start a blog about your services, treatments, trends, or other beauty topics, and load it up with relevant keywords clients might use to search for you. You might also want to consider hiring a professional to help you optimize your website and make it more attractive and mobile-friendly.
- Improve Efficiency and Reduce Overhead Costs
An important part of managing a salon is keeping track of your expenses. The monthly overhead you pay to keep yourself in business is an important number—you should have at least a good, ballpark estimate at the top of your head--and should directly influence the prices you’re setting for your services.
Lowering your costs while keeping client satisfaction high is far from impossible. Here, salon owners must be creative about where they can reduce their costs (shopping around for the same supplies at a lower cost, unplugging high-energy consuming equipment when not in use, shopping around for better rates on credit card merchant-processing fees, for example). Salon owners should also keep an eye on staff, making sure that they are staying booked and keeping costs down as well.
- Stop Losing Clients With a Rock Solid Loyalty Program
Customer loyalty is super important for your business. When your clients are happy, they are more likely to recommend you to their friends, family, co-workers, and neighbors—even random people on the street that stop to admire your work.
There are numerous ways to start an effective loyalty program—from loyalty cards offering free services after a certain number of paid ones, to rewards for referrals and free gifts of salon products. You can also feature clients looking radiant in Instagram or Facebook posts—a wonderful way to advertise while earning their loyalty at once.
- Pro-Active Rescheduling Procedures
One of the best ways to get a client to come back again is by locking them in with another appointment as soon as you can. If possible, try to get them to commit with a set appointment for their next visit before they leave.
You can also set up a campaign to email or phone a client around the time they might need a new appointment. Ask your clients beforehand for their permission for you to contact them—in general, you’ll find that most love the convenience of the service.
- Pre-Plan Multiple Services Packages so Clients Spend More
Make sure you and your team are ready with package deals and additional service suggestions for clients scheduled for just a single service or treatment. Most of the time, salon visitors will appreciate the offers you make, and just might take you up on them—especially if they feel that they’re saving both time and money.
Are hair salons profitable? Well sure—they definitely can be. As long as salon owners keep costs down, productivity high and make a well-planned, concerted effort to increase their hair salon profit margin—or nail salon profit margin, for that matter—then the sky's the limit.
Originally posted on Modern Salon.