Beware – Don’t Run Your Salon — Like an Ostrich!!
I remember, some time ago, I used to be one of those business owners that never kept track of the numbers. For me, it was always more exciting just tracking the bank account. I knew that if my bank account was going up – I was selling enough salon software. It didn’t matter why or how – it just mattered that it was rising.
Well, walking around a business with blinders seems to be just fine during boom times. But when the economy gets a little “squirrelly” it definitely pays to know what’s really going on in your business! And you know what’s pretty tragic? I think most small business owners don’t really know what is going on in their businesses. Like me, they look at the bank account to determine how well they’re doing.
I came to this conclusion a few weeks ago when I was talking to a group of accountants (who have salons and other small businesses as their clients). They flat out told me that 95% of all small business owners are surprised at the end of the year. And truth be told – I was one of those businesses not so long ago!
But these days, I know everything about my business by tracking just a few numbers every week. I have to tell you it’s LIBERATING! And not only that, I know when a problem is arising way before it becomes a nightmare.
Look, we’re all in business to make a profit. Doing your best impression of an ostrich is not going to help you. So, in this post, I’m going to give you the 8 things that you should be tracking every week. I read, some time ago, that if you simply start tracking the numbers every week – they will improve just because you’re focusing on them.
I’m proof positive that this is true. So here are the numbers that you need to focus on every week. And yes, they’re already in your HairMax salon software. And it will take you only a few minutes to get them.
Total Number of Active Clients – you determine this by going into your mailing system and pulling the number of clients who visited the salon in the last 6 months. This is your base. It should be rising every week.
New Clients to the Salon Last Week – again you can get the number in a few seconds thru your mailing system. This number will tell you just how good or bad your marketing efforts have been (when you subtract the new client referral number which is the next number that you need).
Total New Clients by Referral Last Week – you can get this by running a simple client referral report out of HairMax. This will tell you if your referral program is effectively adding new clients to your salon every week.
Retail $ per Client - This can be obtained from the Salon Activity Trend report out of HairMax. This tells you if your staff is actually selling retail to clients getting services in your salon. It strips out walk-in retail.
Rebooking % – This also is on the Activity Trend report. It tells you if your staff is trying to re-book client appointments and how successful they are.
Average Client Ticket – This is also on the Activity Trend Report. This number tells you how successful your staff is in “up-selling” the clients or selling them additional services.
These six numbers should be posted in your salon so that every staff member can see them. Basically, every salon owner’s sales are directly related to some combination of the six numbers above.
The other two numbers that you need to focus on, but will not broadcast on a weekly basis, are your Payroll percentage (of service sales) and your actual cost of product (as it relates to service sales). These are the biggest “controllable” expenses.
There you have it. Measure these 8 simple numbers every week and you will know (well ahead of time) whether your business is stable and growing or it has sprung a leak that needs immediate attention. Don’t wait until the end of the year to determine if you have a problem.
P.S. The ostrich has never been a good role model for any business. Make up a big board and post these numbers in the staff room.
Best Regards, Steve Sampson
HairMax Salon Software is a product designed to be the best investment your salon has ever made. It is not only the easiest and most powerful salon management software on the market. It is from a company dedicated to becoming the ultimate VALUE source to the industry.
A Can’t Miss Way To Resurrect Lost Clients!!
Even the best salons lose clients. It’s just a fact of life. The average salon will lose 20% of its client base over the next 12 months. Now, most of those “lost” clients will be replaced by “new” clients, however, that doesn’t mean that you should just wave the white flag and go home.
Think of it this way, if you could just save 20% of those lost clients – that would mean a pretty substantial impact on your salon sales. For instance, if you have a base of 2000 clients (which is not a lot) – that would mean about 80 clients. How did I get there?
If you take 2000 clients and do nothing – 400 will leave the salon this year (2000 x 20%). If you can resurrect just 20% of these clients, that would be 80 clients! Now, 80 clients is probably worth about $24,000 a year (80 x $300/yr). So, think of it as the price of a full-time receptionist.
Now, what if I could also give you a really easy way to do this? Sound appealing?
Look, you and I both know that we hear good ideas all the time. The problem is that – if we don’t do them so they become habit – they get done once or twice and then we forget about them. Well, that’s the beauty of this new idea. You do it every 10 days, it’s very easy to do (takes about 10 minutes), and you do it the same way every time. This is what you do.
You get three sets of postcards. We’ll call them set 1, 2 and 3. All three sets of postcards have the same front. There will be some image that says “We haven’t seen you in a while, etc, etc”. The only difference between the three sets will be the back of the postcard.
The first set will say on the back that its been a while since we’ve seen you and we want to get you back. Then it will have a really good offer to get them to take action. The second set of postcards will say on the back that you sent them a postcard about 10 days ago and you still haven’t heard from them yet. Then it will restate the original offer. And the third set of postcards will say on the back that you’ve tried twice already to get them back so you’re going to try one last time to get them back. And you’re going to double the original offer.
So, three sets of postcards – all with slightly different messages. The messages should also be in a “Hand-written” font. This is very easy to do and any postcard company can do this for you. In other words, we want the messages to appear like someone wrote them by hand.
Now, once you do this, you’re going to let your HairMax salon software do the rest. Basically, you do a simple mailing every 10 days. Why 10 days? Because, we want to form the new habit, and we want to do the same 3 mailings every month. Let me explain.
We’re going to target clients who visited the salon four months ago but who have not been back since. We want to mail to them three times and then not mail to them again.
So, for the purposes of this example, I will pick June 2009 (because I will start this project on October 1st, 2009).
You would create a list out of your HairMax mailing system that meets the following criteria
All clients who have been in since June 1st, 2009
All clients who have not been in since June 30th, 2009
All clients who have no appointments after October 1st, 2009
Mail to these clients using the first set of postcards. Then 10 days later, do the same exact mailing (with the second set of postcards) with the only change being
All clients who have no appointments after October 10th, 2009
Then 10 days later…do the last mailing (with the 3rd set) with the only change being
All clients who have no appointments after October 20th, 2009
Now the next time you do the mailing (it’s November) you would do it for July 2009 clients. This simple mailing will target Inactive clients for a total of three times…spaced out every ten days. The chances of a client being ready to make his or her decision on coming back will be highest during this cycle.
Try it – it’s a really “low cost” way to stay on top of inactive clients and bring more of them back into the salon. Who knows? Maybe you’ll be able to afford two more receptionists!
P.S. If you need some ideas on a good postcard company – just email me back and I can pass along a few ideas. My email address is ssampson@hairmaxsoftware.com.
Best regards, Steve Sampson
HairMax Salon Software is a product designed to be the best investment your salon has ever made. It is not only the easiest and most powerful salon management software on the market. It is from a company dedicated to becoming the ultimate VALUE source to the industry.
Market Like A New Salon – Even When You’re Not!!
When salons first open their doors, they market aggressively using guerilla warfare to get new clients in the door. They may not know it – but they do it none the less. So, what is “guerilla warfare”? Well, if you look it up under Wikipedia it says the following: “the unconventional warfare and combat in which a small group of combatants use mobile tactics in the form of ambushes and raids to combat a larger and less mobile formal army”.
A good example of this was when this country was founded. The Americans used “guerilla warfare” against the British and won the revolutionary war. Well, whether we like it or not, we’re in a war as well. Although our enemies are not the Brits this time, it’s other salons, other distractions, client complacency, and the lousy economy.
So why do salon owners, who use “guerilla warfare” successfully at the outset, abandon the practice once they open their doors?
I think it may be that we have this preconcieved notion that once the salon has been open for a while – we cannot use simple marketing ideas anymore. Well, I’m here to tell you that you should be using these tactics at least a few times throughout the year – even if your salon has been around for the last 20 years! Let me give you an example:
Remember, the simple flyer? You know, that thing you used to use when you didn’t have any money to market your business? Well, guess what? It still works even though you’re not using it. You should be using a flyer at least a few times a year to promote your business. And there are a few rules that you should be using to maximize the effectiveness of the flyers.
Rule #1: The flyer should have more than one coupon on it. In other words, if you’re a day spa and you offer hair services, nail services, etc. You should have a flyer with maybe 6 coupons on it (1 promoting a hair service, 1 promoting a facial, 1 promoting a free manicure w/pedicure, etc.). If you’re just a hair salon, maybe you can promote waxing as well, or hair extensions.
Rule #2: The flyer should be distributed where your “ideal” clients might congregate. So, if you’re catering to affluent women between the ages of 30 and 45 – maybe you distribute the flyers at a Whole Foods market. If you’re going for a younger crowd – maybe you distribute the flyers at a gym parking lot. In other words, be specific in choosing your target audience.
Rule #3: Don’t be cheap with the offer. Remember these are “new” clients that would not go to your salon if they didn’t get the flyer. Give them a good reason to go to your salon.
Rule #4: Make sure you put on the coupons that this is for “first-time” clients only. There is no need to cannibalize your existing business to attract new clients.
Oh, one last thing to remember, offers and deals are only good when people actually “see” them. Flyers are effective because they’re put on people’s cars (usually) and the person is forced to look at the offer. If you go into a business and the owner places the flyers at the front desk – it will likely not be as effective.
Remember, it’s war out there! Don’t worry if a few people complain. Develop a thick skin and do everything you can to promote your business. Develop a habit of putting together a new flyer every quarter. Sometimes, old marketing works just fine in this age of technology.
Best regards, Steve Sampson
HairMax Salon Software is a product designed to be the best investment your salon has ever made. It is not only the easiest and most powerful salon management software on the market. It is from a company dedicated to becoming the ultimate VALUE source to the industry.
