Month: November 2015

Mobile Transacting

On November 15, 2015

In Business, Hair Salon, Hairdressers Journal, Mobile app, Software

About a year ago I wrote an article called “To App or not to App?” As the title suggests it was a look at whether salons should have their own mobile app. In asking this question we discovered that apps can and should be used by salons but this did not necessarily mean that you needed to run out and pay someone to build you your own app. Rather we recognised that there are many different types of apps that solve different types of problems for your business, from utilities to third party to industry specific, white label and custom developed. Thus the conclusion was nothing revolutionary in that when making your decision about using mobile apps you had to answer a very simple question about what problem you wish to solve and how would an app solve the problem for you.

A year down the line I would like to revisit this question and expand upon the topic as we see a rise in the area of third party apps that specifically focus on mobile transactions, ie payment via mobile phone.

Credit Card Payments via Mobile

Paying your bill by mobile phone is definitely on the rise. However, does this mean that as a salon you need to offer this service to your own clients? The answer (as always) is a business decision based on whether it solves a problem for you and does so at a cost that makes sense.

In most cases the way it works is that you install an app on your mobile phone and then link a credit card to that app. Then, when it comes time to pay for something instead of pulling out you your credit card and swiping it through a swipe machine you rather take out your cell phone, open the app, scan a code and then the money is deducted from your bank account as if you had actually swiped your credit card. So, it’s almost like you are carrying a copy of your credit card around in your mobile phone and your phone almost become the credit card machine. (Note that I am not referring here to the little hardware device that plugs into your cell phone that allows you to swipe a physical card but rather an app on your clients phone.)

Now, for many consumers the idea of storing your credit card details on your phone is something they are not too comfortable with, however, as time goes on and barring any horror reports of fraud taking place clients should become more and more confident that linking your credit card to your phone is reasonably safe.

Now, let’s get back to the core question of what problems this solves for you and at the same time what opportunities it creates?

The most obvious instance is if you currently do not have a credit card terminal to accept credit card payments in your salon, then the benefit is obvious. The question is whether it will be more cost effective to get a terminal from the bank or go the mobile route. This will depend on the bank and the mobile supplier and how good a negotiator you are.

The next potential benefit could be in providing convenience for your clients in cases where they do not have their credit cards with them but they do have their cell phones. Then you would be able to offer them a method of paying. This demand would most likely be driven by your clients and so if every single one of your clients is pushing for this capability then (cost allowing) it may be worth considering. However, clients are not likely to happen upon a hair salon while out jogging with only their cell phones and decide to stop in for an unplanned haircut so the likelihood of demand being high for this reason is less likely, but let’s see what happens over time …?

Loyalty

Another “currency” that clients are able to use for paying in store these days is with loyalty points and in much the same way as their credit cards can be linked to a mobile app they can also use their mobile apps to redeem loyalty points.

I think a far greater opportunity exists in mobile loyalty transacting than the abovementioned credit cards. However, the capabilities of the loyalty scheme itself will be up to the respective app provider and so the decision for the salon owner will be based on considering the features available and the costs involved. Considerations would include whether or not you are able to provide anything unique to your clients that the salon owner down the road cannot also provide using the same service, whether or not their facility allows you to cross pollinate with other partnering businesses that are not competitors to yourself and so on.

Gift Cards

Mobile gift card solutions are another opportunity that make more sense to me than credit card payments. How this would work in simple terms is that a consumer would be able to buy a gift card in some sort of online mall and then redeem it via mobile phone in the salon, in much the same way they would do a mobile credit card payment or mobile loyalty redemption.

Gift cards, although not as prolific in the hair industry as in the beauty industry are a great way to drive business to your salon. The question of feasibility will really be where the gift cards are available to be purchased, ie on whose website / mobile app can they be purchased and how many potential clients are visiting this web site / app? If there is good traffic to these locations then it could be a very good opportunity to drive business to your salon via gift card.

Coupons

Digital discount coupons are another option that also makes great sense. Companies are now offering solutions for discount campaigns that enable consumers to go into a participating store and redeem a discount coupon via their mobile phone in much the same way as the abovementioned options.

Digital discount coupons offer great control for promotional campaigns as they can be set to run for a limited time only and the redemption results can be tracked to let you know exactly how successful the campaign was.

Conclusion

As already mentioned, the number of mobile business solutions is rapidly increasing. However, the temptation can often be to respond to hype rather than business need. Therefore in the arena of mobile transaction methods the same principals should apply of whether or not the solution on offer actually solves a real business need or allows you to capitalise on an opportunity not otherwise available.

Price it right

By Karl

On November 13, 2015

In Articles, Business, Hair Salon, Hairdressers Journal

Chris Parker – SAHJ

A Hair Journal reader recently wrote into the magazine about salons in his area and the extremely low prices they are offering and how is this sustainable to a salon and where are corners being cut? He also mentioned he knows of a few salons who’ve recently closed their doors.

It’s a very good question, if the salon down the road or in the same shopping centre charges more or less than you do for the same product or service what should you do? How can you compete?

When asked to write on this topic I thought at first that it was going to be a very difficult and time consuming task get to the bottom of it because of the need to examine salons in detail on an individual basis. However, when looking at some of the theory behind a pricing strategy we can actually get some good guidance on how to go about deciding on pricing structures for your salon.

Why do you care?

Let’s start with the question of why we even care about this topic? The reader who wrote in to raise the topic in the first place hit the nail on the head when asking the question: “How is this sustainable to a salon” (ie cheap pricing).

I think that perhaps he had begun to answer his own question without realising it, ie by the fact that he noticed some salons had closed their doors leading to a possible conclusion that if you charge prices that so low that they are not sustainable then you will eventually have to close your doors.

The point is that pricing can make or break you, if you charge too much then clients may not come. If you charge too little then you may not be able to make enough money to cover your costs.

But how do you know?

So, how do you go about pricing? Is this something you know inherently? Is it something you learn over time with experience or do you get out the magic 8 ball and ask it? Well, I went to ask8ball.net to ask the question “should I raise my prices?’ The answer I got was “Most likely”

Ok, so there must be more to it than this – but how do you know what to charge?

It turns out deciding on your prices is not a just a matter of gut feel but rather the process can actually be quite scientific. Scientific is good as this implies a formula, something precise and measurable. So what’s the formula so you can all use it and move on ..? Well, maybe it’s not quite as simple a formula and we might need to decode a few terms like Cost Plus Pricing, Competitor Based Pricing, Price Elasticity, Sticky Prices, Supply and Demand and so on to get closer to deciding on how to set your pricing.

What’s the objective?

Before we decide on pricing we need to start with our overall objective. If we take our readers perspective then the objective of right pricing is to sustain, ie to remain in business. This seems like a very negative or limited way to look at things because we generally think about our businesses in terms of achieving growth and making heaps of money while hardly doing any work at all. However, when examined further sustaining your business actually implies that you are being successful because in order to sustain you need to keep clients coming back, pay (and grow) salaries, pay overheads, pay suppliers, compete with other salons and after all of this make enough profit to recoup your investment or the investment of other shareholders in your business. So, sustainability seems imply growth as well.

Services vs Product Pricing

A point worth mentioning at this point is that salons sell both services and retail products. When considering the pricing of these we need to realise the implications. Hairdressing is very interesting in this regard. We have things like Junior Stylist, Senior Stylist and then some guy called John (often the owner) in the price list. So you could come in for a service and pay one price for a Junior, another price for a Senior and then another for a stylist called John.

When it comes to this there is a perception (and hopefully some reality to match) that the gents cut from John for R285 is actually worth it when compared to a regular stylist charging R165, for example. Here you have an example of internal pricing strategies where the same service is being charged at different rates and you have the same challenges about getting pricing right so that clients will be happy to pay and keep coming back.

When comparing with competitor salons then you may be comparing senior stylist to senior stylist, but maybe the other salon doesn’t differentiate in the same way, they only have one price …

Retail on the other hand has less wiggle room. For example, if you sell the same product as a competitor for a higher price then how will you explain that? I can more easily understand if two different brands have different pricing or two different items for the same brand have different pricing but not the same item.

It kind of reminds me of petrol companies that advertise on TV that their product is superior. I’m told that they all generally get it at the same source but then add some of their own special ingredients to make theirs superior. When last did you make a decision to fill up at one station over another because of what they advertised on TV about what was actually in their petrol? You are much more likely to make your decision based on convenience, or service quality or cash back rewards.

Conclusion

So, this is the first article and hopefully we will go further into this topic in order to actually get something usable, but for now if there is one thing that we can take away it’s this quote from Warren Buffet “Price is what you pay. Value is what you get.”

Whatever the prices you set your clients need to believe that the price they are paying matches the value they are getting and so not a matter of the cheapest price but rather the right price.

Ye of little faith

By Karl

On November 10, 2015

In Articles, Business, Hair Salon, Hairdressers Journal

I have a three boys now. Our four year old is in the stage of learning to tie his shoes. Imagine if my attitude towards him was “oh, my son is just never going to be capable of doing this”. Or when it comes to dinner time I simply let my two year old continue to mash his food into his face rather than teach him to use a spoon or a fork or if I decided that its just too hard to potty train him and I leave him in nappies forever.

Not only would this perpetuate the problem of having children that are not capable of doing things that they really ought to be able to do themselves but it would also send a message to them (and others around them) that they are somehow inferior to other children and not capable of being taught or held accountable. What a sad scenario this would be.

Then why do owners, managers and administrators continue to treat salon staff in this way?

Are salon employees lesser human beings than all other industry employees on earth? When integrity, basic common sense, basic literacy and basic numerical skills were apportioned were they absent on that day? Does it somehow happen that as soon as you accept a job in a salon that you are somehow downgraded to the maturity and competency level of a child?

The answer must be a very definitive “NO”!

Attitude reflects leadership

The question then, is who is really to blame for the inadequate levels of internal salon management that seems to be prevalent amongst so many salons around the country?

I believe that ownership and management perpetuate the notion that internal salon administration staff are simply not capable of all doing anything that may be expected of them if they were to work in another industry.

The reason I say this is because this said on many occassion. So, if the person who hired you does not believe you have the same basic capabilities as your peers in other industries and they don’t expect it of you then why would you ever believe you are capable of or expected to perform at a similar level.

Case in point

I recently wrote an article about the importance and benefits of simply providing salon clients with a printed receipt. As a result of this one action there would be a number of other benefits that occurred as well. I also used supermarkets as an example and the fact that you would NEVER walk out of one of our big supermarkets without being given a receipt for your purchase.

However, in salons it is all too common that sales are not even entered as they occur. On far too many occasions the salon staff would manually calculate the sale (on a calculator), take the money, give the change and say goodbye. Then later in the day they may (or may not) enter the sale into their system.

Are the staff hired as cashiers at our supermarket chains mentally or physically superior to their salon counterparts? What then is the difference? I suspect it may be linked to the expectations / requirements / demands of management and ownership. They simply would not tolerate a staff member who does not comply with their point of sale procedural requirements. Salon owners and administrators not only tolerate it but they perpetuate it by taking the stance that salon staff are just not capable of anything better.

The salon environment in perspective

In my opinion the operational environment lies somewhere in between a private doctors office and a supermarket. In a doctor’s office the environment will be very calm and quiet. Patients will be required to first make an appointment, then on arrival fill in detailed personal information sheets relating to their medical and insurance details. Without this information you are unlikely to be able to engage in a consultation with the doctor – it’s not negotiable and administration staff will be the gatekeepers that ensure proper procedure is followed. After seeing the doctor you would be presented with a bill, either in person or via the post.

In a supermarket the environment will be far livelier (almost like organized chaos). Unlike the doctor’s office you will not have to fill in any personal information, but you will have to go through one of their check out points. Have you ever tried to get out of a supermarket without buying anything? You feel like a caged criminal trying to escape. It’s almost like the only way to get out is to buy something first.

Now, in a salon environment you have a bit of both. Have a lively environment with more people coming and going than a doctor’s office but not as many as you would have queueing in a supermarket. You have clients providing you with some information like name and number when they make a booking and perhaps a little more information when you do an in salon consultation. Then when they leave they pay for whatever service or product they purchased.

So if a salon is positioned somewhere in between then surely the protocols should be somewhere in-between as well? If you think about it salon staff are required to operate at a level that requires both the ability to work under pressure and also to be able to handle a greater variety of operating procedures as far as transactions go. So the assumption would be that of the three the salon staff member would be the most highly skilled, trained and accountable. Or not?

The root of the problem

The problem is not that salon staff are incapable, the problem is more than salon management and ownership do not believe in their staff or do not know how to develop their staff or do not care to develop their staff. This is very sad when you consider the effect it must have on a staff members motivation levels.

In our company, whenever something has gone wrong, whether it is a process that has failed or something else that resulted in a complaint from a client we as management always have to acknowledge first and foremost that it is a management failure that has resulted in the occurrence. The only exception might be if a staff member is deliberately refusing to comply with what is required of them, but then again see point number one as it is management that hired the wrong person in the first place.

Therefore, whenever you hear yourself saying “my staff will never be able to do that” or “my staff just make so many mistakes” then remember the fact that ultimately you are responsible for everything that takes place in your salon. Your current structure is perfectly designed for the results that you are currently getting. If you want different results then the change has to come from you first and a good starting point is to put a little faith in the human beings you have working for you. Without this any positive results that occur will simply be incidental. If you are humble enough to realise that you may be the root cause of the problem and are trying to get it right but finding it difficult to get the results then perhaps you are the one that needs to get help in order to achieve this.

However, its no good for you to simply try and hire someone to make all the problems go away for you. This is another very common problem seen in the hair industry, ie the flamboyant artist refuses to take responsibility for their business and hires an outside business person to run everything for them. I have seen this fail more times that I have seen it succeed. You have to get involved yourself. You cant flip between hiring someone or doing it yourself. It requires both, hiring the right people and being involved in the process to develop your team and get the results that you expect, require and ultimately demand.

Are you engaged?

By Karl

On November 10, 2015

In Articles, Business, Hair Salon, Hairdressers Journal, Wellness

In this month’s article I would like to ask the question “Are you engaged with your clients?” I think that many salon owners will feel a lot of pressure to be sending out regular emails to clients telling them of news, specials and other information that they hope will lead the clients to return and spend more money with them.

On one hand you will have salons that spend a lot of money paying designers to build beautifully professional emails and on the other hand you may find the salon owner, manager or receptionist creating a rather less appealing newsletter using word, power-point and clipart as their canvass and design tools. And then you will have those that just don’t do anything at all, they rely on face to face interaction when the clients are in the salon and use personality as their engagement mechanism.

Now, I do feel that a monthly or quarterly newsletter via email is very useful as it lets your clients know that your business is still in operation and you are ready for their business … even if they don’t open the email, just the fact that you sent it means that you are operational and are organised enough to be able to send them an email. I also believe in the positive engagement that takes place once the client is in the salon.

However, I believe that there are many other opportunities to engage with your clients in smaller and more frequent communications. I also feel that if they are done right they will be far more effective than an impersonal monthly newsletter or sales special.

SMS Booking Confirmations

Booking confirmations are more powerful than you might think. The most commonly used reason for sending booking confirmations is that they will prevent no-shows and thus save you money. This is true, and important. However, there is something else it does, which I believe has a deeper impact and therefore a longer lasting value. I believe that the client has a feeling of gratitude when they receive the sms reminder. On one hand it reminds them to not miss their appointment and the other hand it gives them enough opportunity to cancel and avoid the embarrassment of not showing up. It makes a small positive impression in their mind about your business and its these positive impressions that you want to create as often as possible and build upon. Talk to your software provider about automating this function so that it takes place at the same time each day and becomes part of your standard operating procedures.

SMS Birthday Wishes

Everybody loves to feel special on their birthdays and sending someone a birthday sms does just that, even if deep down inside they know it was a machine that sent it to them. These days it’s actually common for people to complain if they did not get their automated birthday sms.

However, what people love even more than a birthday wish is a birthday gift and if you are able to offer them something special on their birthday then the chances of them walking into your salon to spend some money with you are even better. How you capitalise on the situation thereafter is up to you. Again, talk to your software provider about automating this process to take place at the same time each day.

Loyalty Reward SMS Notification

If you are running a loyalty scheme in which you offer rewards then whenever a client is rewarded with something ensure that they immediately receive an SMS to notify them about it. Its no use having a loyalty scheme and hoping that clients never use their loyalty rewards. If it has been well thought out then it is better for them to redeem their rewards as the long term benefits are greater. Speak to your software provider about automating this notification so that staff members do not have to manage this process manually.

Unused Rewards SMS

Following on from the loyalty reward notification, you may wish to notify people that have rewards available but have not been back to the salon for a long time. On one hand it is common courtesy for you to let them know that they have unclaimed rewards and so the impression should be a positive one, as long as the reward value is worthwhile. Maybe only send a notification to clients who have rewards over a certain value so that they don’t roll their eyes when you send them an sms, which costs more to send than the rewards they have available.

Follow up (feedback) messages

One great way to engage your clients is to send them a follow up email or sms the day after they have been to your salon. The message should thank them for their visit so that they feel valued by you and that they get a sense that you want them to come back again.

Furthermore the message should welcome their feedback so that you can improve your service to them and give them the opportunity to complain if they need to complain. Its better for them to complain to you the day after their visit than to complain to their friends and families (or an online complaints forum) and never return to your salon.

Do I need to say it … talk to your software provider about automating this process so that it is something that always happens at your salon.

Clients that have not visited

All salons will have clients on their database that have not visited for a long time. An opportunity exists to send an email to these clients with the goal of either de-activating them from your database or getting them back in to the salon. I would do an exercise whereby you send them some sort of worthwhile offer in order to test whether they would consider coming back or not. If they respond positively it means that you have won back a client. If they respond by asking to be taken off the mailing list then at least you know your database is that much more accurate.

Talk to your software provider about conducting this exercise so that you ensure you send the message to the correct clients.

Conclusion

There are many ways apart from newsletters and specials to engage with your clients in order to continually shape a positive perception of your business. As you consider each of the above remember that once you start you must not stop. It must be something that is continued in your business for the long run. Also, start with one thing at time and ensure you get it up and running properly else you may bite off more than you can chew. Work with your software provider to automate as much as possible as this has the best chances of ensuring it is continued for the long run.

Tag ’em and bag ’em

By Karl

On November 6, 2015

In Articles, Hairdressers Journal

Imagine you are a marine biologist and you specialize in studying the behavior of great white sharks so that you can learn about them and ensure they are protected from extinction.

One part of your job might include tagging great whites so that you could monitor their movement patterns. Imagine going out on a boat one day to do some tagging. Think about how much work and cost would have already gone into getting ready for the task of actually doing the tagging. Apart from the cost of your education, the cost of the boat, the cost of the other members of your team, the cost the tagging equipment, the cost of the monitoring equipment and so on. Now, imagine you’re get out into the sea, you’ve locate one or more great whites, all the work has been done and at the last minute the person who is meant to place the tag on the shark simply chooses not to do it … and everyone packs up and goes home and hopes that somehow information about the sharks will magically become available. An absolutely ridiculous notion right? That would be absurd! All that money and effort only to walk away with nothing?

Some perspective
Okay, let’s put it another way. Imagine you are a hair salon owner. You’ve always dreamed of having your own salon and making it a success. You have invested energy finding the perfect location, you have invested hundreds of thousands of Rands into shop fitting and making your salon look as amazing as possible. You have gone through the tedious processes of hiring staff, setting up a price lists, purchasing computer equipment and software, stocking your shelves, advertising in magazines, local radio stations, even television, you have done everything you possibly can in order to get people through the door. Then, when they arrive you treat them as if you actually don’t care they exist. An absolutely ridiculous notion right? That would be absurd. All that money and effort only to walk away with nothing?

Well, if after all the effort of getting a new client to walk through the door and your staff do not capture their details onto your system it is as if they do not exist to your salon. Think I am being a little too dramatic? Put yourself in the shoes of your client. Visit a salon and then never go back. I would put money on it that 9 out of 10 salons will not care, well to be more accurate they will not ever know and hence it’s is just as bad as if they did not care and you would never hear from them again.

The message you are sending your clients
What is the message you are giving your clients when you do not capture their details on your system. The message is that “we do not really need you, you are not very important to us, we don’t really have anything worthwhile to offer you, we don’t want you to return, we have all the clients we need already and money is not important to us, we care more about counting our stock than we care about knowing our clients” and so on.

The funny thing is that salon staff are afraid of offending clients by asking them for their details, but in my opinion, it’s more offensive to clients to perpetually treat them like strangers. Do you not think that you can give a better client service if you actually keep record of what you say and do for your clients?

The critical touch point
The problem is quite easily solved, when a client calls in to make a booking simply ensure that your staff request and capture the clients name, surname and cell phone number. That’s NAME and SURNAME and CELL NUMBER. Having 120 John’s with no Surname on your database is not that helpful either, believe it or not.

However, if you do successfully capture these three every elusive bits of top secret information, then hey presto, you’ve tagged the shark. You can now track their behavior forevermore. Can I end my article at this point and getting back to my coffee? There’s not much more to it than this step. Any other information you get over and above the name, surname and cell phone is beneficial but in order for the very basic tracking of your clients and the ability to communicate with them you only need this.

What’s the point really?
I had a quick look at the client spend per visit of about 15 salons and for these 15 it is roughly R450 per visit (with a range of about R275-R650). Let’s say for arguments sake that each person visits a salon every 3 months, then over 1 year that is R1800 per person. Over 10 years that is R18000 per person. Imagine that husbands, wives, children or friends end up visiting the salon because of association to the original person then you could multiply that figure by 2, 3, 4 or more. This is a very rough illustration but gets the point across about the potential value of every client that visits your salon when you see them with a long term perspective.

Conclusion
Imagine Bruce Fordyce running the Comrades, arriving at the finish line ahead of the rest of the pack only to stop just before the line, turn around and walk off without crossing the line. Again, this would be ridiculous right?

Well, so it is with your your clients if you don’t capture their details. Every effort that is made in your business is with the express purpose of getting people through your door and keeping them coming back. Surely something as simple as adding their contact details to your system is not too difficult a task, considering all the other challenges you have faced to get where you are today.

The reason you do stock control is primarily so that you can manage and sell stock to your clients and keep them coming back. The reason you pay salaries is so that you can keep staff motivated to keep providing top service to your clients and keep clients spending money with you. The reason you write down appointments is so that staff don’t arrive at your salon on the day only to be turned away because they don’t have an appointment. The reason you send sms and email messages is so that you can communicate a message with your clients that gets them to come back. The reason that you introduce loyalty schemes is so that clients will keep coming back to you.

However, when you fail to even know their name you work against yourself and every other effort you have made in your business to be successful. You send a message that you really do not care and could not be bothered whether they come or go. Companies can spend millions trying to get their hands on client databases, whereas salons simply throw this valuable information into the garbage.