It was the best of times. It's now the worst of times and they were wondering if the business was viable any more.
Doing a strategy session the other day. The business owner has run a string of successful enterprises over the years and is one smart lady. Her current business is in the beauty industry in a suburb on Sydney's lower north shore.
And until a few months ago, business was booming. They were top of class in their category.
But things change. Nothing is forever and suddenly they found themselves doing half their normal weekly turnover. Things were not looking good.
And that's the scenario they presented to me. Help – What should we be doing?
In any scenario like this, you need to know what happened. What set of circumstances led to this? Was it a slow gradual decline which then went into a landslide, or a sudden issue which caused catastrophe? And what could we do (if anything) to fix it.
Probing, certain facts came out.
The area used to be predominately fairly affluent. Ladies who came in and spent lots of money on themselves, making them look beautiful. Price generally wasn't an issue.
But over the last few years, the demographic has changed and as a result, the shopping culture has shifted. More and more cheap Massage Establisments and Nail Bars have moved in.
Price has become a major issue. People simply weren't interested in the quality this organisation offered. They weren't interested in spending the tens of thousands of dollars making themselves look younger.
The organisation had also just moved from a shop presence at street level to an upstairs location. Suddenly, walk in traffic completely dried up.
And finally, the owner, preoccupied with all the moves, starting another high end beauty company, had stopped marketing the way she used to.
Put all this together, and disaster loomed.
Moving right now was not advisable, so they needed to find a way of getting more people in the door where they were – and keeping them.
So here three things I suggested they do immediately to turn things around.
- We want to get new clients used to coming back. The more times they came back, the more likely they were to get great results, develop trust and spend more.
Enter the two for one offer. For every new client, after they'd had their first session, immediately book them in for the next one at an equivalent price – absolutely free. Get them committed to coming back.
- Offer a referral reward. For every friend you send to me you get say $25 off your next service. Send two and you get $50, send three and you get some other service free etc.
- And finally "stop pushy selling and build relationships first”.
Over the years the salon had moved away from allowing their clients to choose their level of treatment, to recommending (and pushing) rather expensive courses of treatment on their first visit.
The salon believed they'd be doing their clients a disservice if they allowed ad-hoc visits. And while this to some level was true, it alienated lots of customers who felt pushed into a sale they may not have wanted.
Recognising that trust takes time to build up and that someone coming in for a facial or eyebrow wax doesn't want to be at the receiving end of a pushy therapist who believes it's her role to sell, we've "banned” overt selling.
From now on, a client must have visited at least 4 times and built up a relationship before a senior therapist talks about how they could possibly help them further with more expensive options. And rather than force them into a set regime, allow the client to choose the rate they want to move forward and how much they feel comfortable spending at a time.
Time will tell how these strategies play out. But I firmly believe that the business is viable – it's a case of back the jockey, not the horse.
Finally, if you're struggling, maybe lost some direction, or even doing well and want to do better, talk to us about a strategy session.
They run for 2-3 hours and we'll give you a host of actionable ideas which you can implement yourself (or have us do so for you). Call me on (02) 9499-7958 (02) 9499-7958 to have a confidential discussion.
Rashid.
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