Industry • COVID-19
Business Resilience for Salons: Managing Crisis
May.20,2020By Cynthia Popper
It’s not easy to manage a salon during a period of crisis. To survive, you need to lay the foundations for business resilience.
Like any business, beauty salons have their ups and downs, but you never know when you’ll be faced with a true crisis. For instance, COVID-19 changed everything almost overnight: The pandemic went global, a recession impacted local businesses, and salons closed their doors. Salon owners were left questioning how to pay their staff, let alone the rent.
But you’re not alone. The coronavirus pandemic has impacted salons, spas, and wellness businesses of every size — we are truly in this together. One thing is clear: Now more than ever, it’s essential to lay the foundations for business resilience.
What is business resilience?
Business resilience goes a step further than a business continuity plan, which includes disaster recovery protocol and strategies to safeguard vulnerable assets. It speaks to a business’s ability to adapt to challenging circumstances, accounting for the human side of crisis management in addition to practical and financial considerations. To improve business resilience, salon owners should examine internal workflows and external communications. How can you keep the business healthy in the midst of a chaotic situation? How can you foster a positive, adaptable, and agile culture? These questions will inevitably arise, so it’s crucial to consider them.
In this guide, we’ve gathered some resources to help salon owners and other wellness pros cope in times of crisis. From virtual outreach, to financial planning, here are our top tips for building a resilient business.
In uncertain times, it’s all about (virtual) relationships
People don’t just visit the salon for haircuts. Many will book recurring appointments for expert beauty tips, engaging conversations, or a fun experience. It's a relationship— one that is valuable to salon owners and regular customers. That’s why relationship marketing is the best promotion strategy, especially when the people you’re marketing to are yearning for connection.
Even in extreme circumstances, you can still connect with clients virtually — they might welcome the sense of normalcy. If handled correctly, you can even gain new clients through this approach. Here are a few ways you can reach out when such challenges arise.
Start a beauty blog
The easiest way to promote your salon and engage with clients from afar is to start a blog. Platforms like Wordpress and Hubspot are accessible and easy to manage, while Medium comes with a built-in network of existing readers. All you need to focus on is content — and as a salon owner, you should have no shortage of ideas.
Think about the beauty problems you see every day, from brittle, over-colored hair to untreated skin issues. If you create a list of a dozen ideas, that’s almost three months of beauty blog content. What’s more, your readers will eventually start suggesting new topics for you as the blog grows.
If all else fails, write for specific client segments in your posts. Don’t forget to include beauty advice for men, holiday or event advice, or even children’s hair styling tips for parents.
Publish beauty video tutorials
If you’re not comfortable with blog writing — or if you are, but need something to supplement it — beauty video tutorials are another great option. There’s a high demand for expert beauty advice, and you’re in a perfect position to offer it.
Video is a well-suited content medium for tutorials, especially for anyone seeking stay-at-home beauty advice. Brainstorm topics that reflect your clientele’s needs and tailor the videos to address their unique problems. Maybe they struggle with at-home coloring of stubborn grays, or are unsure of the best technique for trimming bangs.
Gain Instagram followers with beauty tips
A popular and effective method of reaching customers virtually is to engage with them on social media, and Instagram is, by far, the platform of choice for beauty influencers. Between its visually-engaging image feed and live-streaming video options, Instagram has a wealth of opportunities for promoting your salon.
That being said, salon owners can’t just create an Instagram account and watch their followers increase. You’ll need to keep certain factors in mind:
Instagram limits videos to 60 seconds in length. Focus on short or live videos, and save longer topics for your YouTube channel.
There is no shortage of Instagram beauty profiles out there, so be sure to stand out. Use a distinct colour palette to present your feed as a thematic grid.
Don’t forget to check out Boulevard’s marketing advice guide, 5 Salon and Spa Promotion Ideas to Do Now (No Social Distancing Required).
Start thinking about how to get clients back into the salon
The marketing tips listed above can help you reinforce your brand in times of crisis, but your existing clients also deserve a little extra attention. After all, gaining a new customer is five times more expensive than retaining a current one. Following an interruption to business, you’ll need to think about how to get clients back into the salon.
The exact approach you use to communicate with existing clients can take many forms, but the key is to offer something personalized. Here are a few examples to help you get started:
Use snail mail for a personal touch
It’s easy to contact customers with digital promotions, but if you really want them to feel special? Send a “checking in” email or postcard wishing them well. And don’t forget to personalize it with their first name! Gestures like this help them feel appreciated and keeps your salon in mind when the business reopens.
Offer rewards with loyalty or referral programs
It never hurts to welcome clients back with an incentivized discount. These don’t necessarily need to break the bank, but a $5-off coupon can work wonders on short notice. What’s more, tying this into existing loyalty programs can encourage new visitors to sign up as salon regulars.
Speaking of new visitors, a salon reopening is an excellent opportunity to implement a referral program. All you need is a reward that can benefit new and old clients, like a shared gift bag or joint pampering treatment.
Plan a grand reopening event
Your salon is a local business, which means its success depends on the local community. So after a challenging event has passed (and it will pass!), why not invite the neighbors over? You could celebrate the return to normalcy with a doors open event: You can bring existing clients and curious newcomers together for snacks, wine, product samples, and a rich-raffle.
Want more salon retention tips? Take a look at How to Get Clients Back Into the Salon: 4 Ways to Reengage in 2020.
Make sure your business is ready to weather a recession
After a period of business interruption, you can expect an influx of customers. But with a disruptive crisis — whether it’s a pandemic, a national security issue, or a natural disaster — the economy may suffer in the aftermath. While you can trust in the resilience of the beauty industry during recession, you can’t rely on the “lipstick effect” to pull your business through. Building business resilience will include concrete planning. Here are some steps you can take:
Have a detailed plan
It’s far easier to prepare for a recession before it begins than in the middle of one. Do some business continuity planning to brainstorm a few emergency scenarios, and periodically rethink them as your salon grows. Ideally, your plan should account for the following financial considerations:
Audit your assets outside of tax season.
Determine your assets and operating capital.
Calculate how long you could sustain the salon after losing customers.
Prioritize any essential expenses while highlighting options that can be cut.
These plans don’t necessarily need to be recession-based. Anything that causes a slow period or loss of customers — such as increased competition — might be a reason to break the emergency glass. If that happens, you’ll be far more comfortable working from a plan than without one.
Set up a line of business credit
Any organization looking to build business resilience should have access to a credit line or small loan — even if the economy is doing well. During a recession, lending guidelines are more restrictive, making it harder to obtain liquidity when it’s needed.
Remember, credit lines and small business loans are not the same:
Credit lines have high interest rates, but no monthly payment until making a purchase. It’s an ideal safety net when a recession or unexpected expense occurs.
Business loans have lower interest rates, but you must start repayments immediately. They’re preferable when you’re working on a project that will generate long-term returns.
Finally, do not use personal credit to keep your salon running. That kind of debt can hurt you long after the recession has turned around.
Have a downsizing strategy
You can do everything to possibly prepare for a recession and still face the point where it’s necessary to downsize. That doesn’t necessarily mean rushing into things — if you downsize in stages, it’ll be far easier to ride out the economic downturn and rebound once it ends.
Reduce operational hours: The most effective option is to reduce the hours your salon is open. If you run a small salon with three employees, closing an hour or two early will save the same amount of money as laying a team member off.
Trim your salary: Taking home a smaller paycheck is the responsible choice as an owner and shows your employees you’ll make personal sacrifices for the team as well.
Downsize the right way: If you do have to downsize, be professional. Prioritize team members based on seniority instead of personal preference, offer a reference letter, and see if they’re available to rehire down the road.
Be open with your staff
There’s no point in hiding a difficult financial situation from employees. In fact, they probably already know more than you expect. What they do need is a leader who will be transparent and address the challenge in a clear way. You don’t have to describe bank statements for them in detail, but a general picture can help cultivate trust in a difficult time. What’s more, your team might have great ideas about how to adapt services to survive the recession.
For more details on creating a recession plan, be sure to read The Beauty Industry During Recession: 5 Survival Tips
Managing your business through a crisis is doable, but there’s no denying that it will be the challenge of a lifetime. You will need to make difficult choices to grow your business, let alone preserve it. At the end of the day, what matters is making connections — both for customers and for you. If you treat your brand as a community instead of a business, you’ll have people to depend on, no matter what challenge arrives next.
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