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 …?
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.
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.
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.
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.