Industry • Best Practice
Feb.03,2022By Boulevard Staff
For thousands of years, artists have called upon the muses for inspiration. According to the Greeks — who came up with the concept — there were Muses for almost everything, from astronomy to epic poetry. If you’re a salon or barbershop owner who’s waiting on the Muse of business strategy, then this article is for you.
Based on proven business strategies and the latest consumer data, these ten tips will get your creative juices flowing and help you increase salon revenue in no time.
As much as we’d like to start this list with a super-secret sauce tip that you’d never heard of, it’s the basics that lay the foundation for growth. Before you create any new programs or buy slick tech, you have to make sure you’re clear on one thing: your goal. What is your average hair salon revenue? Where do you want it to be? Why do you want to get there? When do you plan on arriving? Like good old Abraham Lincoln said more than a hundred years ago, "Give me six hours to chop down a tree, and I will spend the first four sharpening the ax." Translation: Effort is nothing without aim.
If you haven’t reviewed your pricing lately, chances are you’re leaving quite a bit of money on the table. There’s an art and science to adjusting salon pricing, but here’s a good rule of thumb that can help you get started: If you’ve done the math and you’re south of a 10% profit margin, time to raise rates. One more tip: If you decide to up your prices, don’t forget to put together a solid communications plan to let your clients know. Few things go over like a lead balloon more than SURPRISE, EVERYTHING’S MORE EXPENSIVE!
Regardless of your personal feelings about billionaire investor Charlie Munger, he does know one thing well: How to turn a profit. According to Munger, achieving anything in business is about building an incentive structure that supports your goals. Does how you reward your employees — or yourself — push your business where you want it to go? If it doesn’t, or you don’t know, it’s time to experiment.
How? With your salespeople, of course! We recently surveyed 800 beauty business clients to find all about their habits, behaviors, and motivations. One of the most exciting discoveries we made was how vital stylists are to driving product sales. 50% of salon and barbershop clients are inspired to buy beauty products during their appointment by word from their stylist. Your stylists aren’t just artists: They’re salespeople too. Train — and incentivize them — as such, and you’ll move more inventory.
That same survey we just talked about also packed some surprising insights about the importance of getting your booking operation online. For 41% of beauty business clients, online booking is the only way to fly. 24% said that a poor online booking experience would be the number one thing keeping them from coming back to a salon. These results indicate salons can boost both long and short-term revenue by embracing this booking trend. Interested in going in this direction? Give us a ring. Our platform features easy self-service booking that will have your clients singing.
Let’s keep the survey revelations coming! 50% of beauty business clients visit their salon or barbershop every month. That means that for half of your customers, stopping by is a regular part of their routine. So why not update your offering to match client behavior and develop subscription packages? Not only does this model better suit your clients’ lifestyles, but it also provides a much more stable revenue stream for your business. Finding the right pricing formula may take a while, but we guarantee the payoff will be worth the effort.
The Wharton School of Business — one of the top business schools globally — found that clients earned through a referral are 18% more likely to stay with a business than those that weren’t. In other words, if you don’t have a referral program in place, it’s probably a good idea to create one. Beauty businesses are built on the power of relationships, so take advantage of the goodwill you’ve created to bring quality clients. It will undoubtedly add resilience to your hair salon revenue model.
From grocery stores to coffee shops, loyalty programs are must-haves for high-volume businesses looking to transform one-time customers into long-term clients. Loyalty programs change how clients feel about doing business with you, encouraging them to see each transaction as an investment — instead of an inconvenience. Don’t worry if you haven’t built one out yet. It’s not too late. If you’re looking for an easy way to get a loyalty program up and running, we’ve designed the app of your dreams. Our Loyalty Program app allows you to create and customize the perfect system to drive client retention.
What’s so special about specialization? First, it increases product differentiation. The generalist salon will always face higher competition than the salon that doubles down on a particular type of service. Second, it allows you to raise rates. The harder it is for your target clients to find alternatives, the more you can charge for your services. Lastly, it drives retention. If it’s not easy to replace your salon’s services, your clients are far more likely to stick around.
We’ll drop one more bit of data from our recent survey here: 30% of beauty clients chose a new salon based on its ability to offer a high-end experience. As budget-minded as many of your clients are, they’ll still pay for the luxury services that matter to them. So do a little client research: Ask them to give you a beauty service wish list and find the overlap. Depending on the price point and the type of service, you often don’t need many clients onboard to significantly increase salon revenue.
Is a hair salon a profitable business? It is if you apply the right growth tactics. From setting your goals to specializing your services, this article has provided you with ten proven tactics for improving your beauty businesses bottom line.
Now that you have the game plan, it’s time to put what you’ve learned to work.
Don’t worry! You got this.
Boulevard was built to help your business achieve profitability at scale without losing an inch of sanity. See for yourself! Get a free demo today.