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Tall, grande or venti? A king-size room, suite or the penthouse? Coach, business or first class?
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We live in a world defined by levels of service, product quality and price points – where one size rarely fits all.
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When indoor tanning salons first began to appear in the early 1980s, customers were offered one level of tanning. It was often a boxy, 24-lamp, 100-watt tanning bed with no facial tanners, no aromatherapy, no aqua-mist, no sound system, nothing special – and there was a good chance the bed’s frame was made of wood.
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Splinter jokes aside, what’s even more amazing is that people lined up to use these primitive devices often paying $10 for a single session.
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Thankfully, competition has a way of bringing out the best in a business.
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Today, most salons feature up to five UV tanning levels, with a 32-lamp, high-tech marvel often used as a basic, “Level-1” tan. The highest equipment levels are technological masterpieces that would make even the engineers at Porsche and Mercedes green with envy. In addition, the majority of salons also offer automated and hand-held spray-tanning, red-light devices, wellness pods, infrared saunas and body wraps, etc. – that all complement the “levels” of service available on the menu.
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And, while the majority of salons have embraced the concept of offering “levels of tanning,” few have truly capitalized on the amazing marketing and profit potential that offering “levels” can contribute to the salon’s bottom line. Most salon operators simply view the higher-level tanning systems as a way to generate more dollars per session.
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The rationale: “If I can get $4 per session and $19.99 per month for Level-1 tanning, then I should be able to get $20 per session and $99.99 per month for Level-5.” On the surface, this is a logical assumption; however, what looks good on paper doesn’t always materialize easily in the real world. The true value of the higher-level tanning equipment is in their ability to help you effectively sell everything in the salon including lotions, accessories – as well as the lower-level tanning packages.
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Some of the best advice I ever received in business was this: “Avoid lowering your prices. If you must discount, simply provide more product or service.” The higher-level tanning equipment in your salon offers you this opportunity – and you can test the waters today without any financial risk.
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Consider the following: A typical, 32-lamp tanning unit costs about 30-40 cents per session to operate for lamp use and electricity. A 52-lamp, four-facial bed with all the bells and whistles cost about 75 cents to $1 per session to operate. (With few exceptions; even a full-body high-pressure system typically costs less than $1.50 per session to operate). Accordingly, when you offer a customer a “free” session in your Level-5 unit when they purchase a lotion, boutique item or tanning package, you are giving them a $200 discount that in reality costs you about $1. So, why would any salon owner choose to discount with cash when they can simply use “free” sessions on the higher-level units?
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A Level Playing Field
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Let’s say you have to compete with a gym chain that moved into your market and they are offering gym and tanning for $20 a month. You are offering your Level-1 tanning for $20 a month and are baffled as to how to compete.
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Consider the following package: One Month of Level-1 Tanning for $19.95. Every month, the tanner pays the $19.95 also gets one “free” Level-5 session. You just gave your customer a $20 discount that costs you about $1. It’s like getting the month of Level-1 tanning – FREE!
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Note: Do not promote the Level-5 session as an “upgrade.” If you do, the customer will only recognize the “perceived value” of the “upgrade.” Instead, show the full “single-session” value of $20.
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“But what if my competitor also has higher-level equipment?” Then, it’s time to take off the gloves and “hit ‘em where they ain’t!”
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Consider this package: One Month of Level-1 Tanning for $19.95. Includes one “free” Level-5 Session (a $20 value), and $10 to spend on any lotion product. Notice it doesn’t state a percentage discount on lotions, but $10 to spend anyway the customer chooses. What does it really cost your business to give a customer a $10 store credit?
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If a customer gets 30 percent off a $35 bottle – you just gave away $10.50. But, giving the customer $10 to spend at their discretion creates a sense of excitement and urgency (use it or lose it) and hopefully, “upselling” opportunities for your staff.
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You can use the same logic on every tanning package. Perhaps, on the Level-2 package, you include two free sessions in the Level-5 unit and $10 in spending cash, and so on. The goal is to maintain price integrity while securing customers for the long-term by using the higher-level tanning systems as marketing tools to sell everything in the salon.
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If your salon also offers spa services such as spray-tans, red-light, wellness pods, body wraps, etc., you can apply the same tack. For example: One Month EFT on Level-1 Tanning for $19.95. Includes one “free” spray-tan, red-light, wellness pod, body wrap or Level-5 session. Let the customer choose what they would like to use.
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Fighting Diversion & Online Sales
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One of the industry’s most troublesome profit-stealing areas of concern is that of “product diversion,” or the online sales indoor tanning of lotions at deep discounts. While we know that many of these products could be adulterated, watered down, unsanitary, etc., the unsuspecting consumer simply thinks they’re getting a great deal. You can use your “levels” of tanning and spa services to combat this, as well.
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For example: Purchase a $50 bottle of lotion and receive $25 in Tanning & Spa Credit. Again, you just gave your customer a $25 discount that in reality, just costs you “time” and the operating costs of the services rendered. And to get their discounts, the customers must revisit your salon again and again.
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This sales tool is so much more effective than offering cash discounts. It also allows you to fight “diversion” without having to act like the Lotion Police. As word spreads about your great offers, people will be less likely to take the chance of buying their tanning products online. You can also use this strategy to sell boutique items, clothing, flip-flops, weight loss products, sunglasses, etc.
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You have the power to level the playing field. Test the strategy on a few tanners, and then consider rolling out the program to your entire customer database.
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If you would like an Equipment Operating Cost Calculator that estimates the cost per session to operate every system offered in your salon, including UV-tanning, spray-tans, red-light, wellness pods, body wraps, etc., write to jerry@istmagazine.online. It’s FREE – compliments of IST Magazine!
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Some of the best advice I ever received in business was this:
“Avoid lowering your prices. If you must discount, simply provide more product or service.”
