You Don't Own a Salon. You Own A Business.
In his latest blog, Leon Alexander Ph.D., challenges industry conventional thinking to help owners add more to their bottom lines.
From the Inside Out
At ISSE last month, we introduced a marketing workshop called, "Grow Your Business from the Inside Out." There's been a lot of interest around this subject, and we will carry it in these blogs for awhile.
July 10, 2011
Bart Foreman, president of Group 3 Marketing
3 min to read
The primary emphasis of the workshop and this series focuses on your guests. Why? Because they bring in the money that pays the bills and pays your team. If you lose your guests, you lose your salon. It's that simple. You may argue that there are always more heads to keep the salon thriving and, while that's true, it's also true that many of those "heads" are doing business elsewhere, and maybe those other salons are doing more than you are to make their guest experiences remarkable.
Why should every visit be remarkable? According to marketing author, Seth Godin, in his book, All Marketers are Liars, "If you go out of business tomorrow, no one will care, so do something remarkable or quit." If you believe you can live off the churn of new guests coming and leaving, your business will not succeed because it has been well documented that it costs a lot more to gain a new guest than to keep one.
Growing your business from the inside out is more than just five-star guest service. Five stars are not remarkable – they are expected. It takes more than expected service. It takes a 6th star, ”the marketing star,” the remarkable star that will set the stage for the next visit and then, through marketing, reinforce each guest's desire to return. Understand that loyalty is fleeting. Yesterday's loyalty is today's lost guest, and research continues to indicate that guests are often more loyal to the stylist than to your salon.
Yet, owners are told that if they have a loyalty program, all their retention problems will vanish. POS companies used to create points-based "loyalty" programs that are not marketing driven and do little to influence the next sale, which is what marketing is all about. That was the thinking in the 90s, but we have learned so much more in the last decade that it's time to introduce a new, more dynamic paradigm. We ought to know because Group 3 Marketing is the pioneer in developing loyalty initiatives for salons, beauty stores and distributors.
Today, our focus is on your business drivers, but loyalty is not a business driver. The three key salon business drivers are:
Retention – doing those things to keep guests coming back, beginning with five-star service and then being remarkably smart by focusing on your guest and not your services. We call it being "guest centric."
Win-Backs – you always will have some natural churn but then there are 'defectors.' Using your POS data, you can identify them as potential defectors and then engage them and try to keep them.
Organic Growth – most of your guests are what we call under-performing. They are not buying all of your services and they are not buying retail. How many guests do not get their color at your salon, do not get their nails done, or do not buy retail from you? Those guests are all underperforming and are marketing targets.
A POS-driven program that awards points for sales, points for referrals, points for pre-booking or on-line booking is not a loyalty program. It's a reward program designed around you, not around your guests. It does little to influence the next sale.
However, a database-driven, guest centric marketing initiative allows you to create insight about your guests and identify the pattern shifts in their visits and changes in the services and products they are buying. Concentrate on your business drivers and remember that marketing is what we do to influence the next sale.
To learn more about Group 3 Marketing, visit www.group3marketing.com.
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