While the tanning industry experts may disagree on approaches to increasing revenue, one thing they will all agree on is that a proper portfolio of EFT (monthly billing) packages is the single-most valuable thing you can do for your business. If your salon does not currently offer an EFT membership option, I hope that this article will convince you otherwise. [gap height=”15″]
I have heard various arguments against providing EFT memberships such as:[gap height=”15″]
- It’s too complicated to setup, or
- It won’t work in our area, or
- I don’t have time to keep up with these drafts. [gap height=”15″]
The one that baffles me though, is: We can’t make money pricing unlimited tanning that low.[gap height=”15″]
Let’s address the easier ones first. [gap height=”15″]
EFT memberships are neither complicated to setup, nor are they difficult to sell if done properly. The key is to keep it simple. A good software package that allows you to fully customize how you want to offer EFT takes all the guesswork and pain out of the process. Once you write down what you want to offer, it’s just a matter of adding it to the system.[gap height=”15″]
As far as running the actual drafts, re-drafts, and collecting past-dues, a good software system will handle this absolutely seamlessly and with zero input. The software should be fully automated and hands-free operation, and you should simply receive a report the day it’s run. And, you should be able to run the drafts as often as you like, every day if you so choose.[gap height=”15″]
The next barrier to EFT is the notion that it is not cost effective to offer unlimited tanning for a cheap price. When someone who has an unlimited membership comes in for a session every day, you are not making money. In fact, you LOSE money on that tanner. This is true. However, what salon owners don’t realize is that only a small fraction of your EFT customer base may actually tan every day – the vast majority will not. This is where the value of a properly setup EFT is realized.[gap height=”15″]
As an example, the data for our busiest month shows that only seven percent of the members being billed that month came in more than ten times to utilize their unlimited membership. The vast majority, a whopping 68 percent, came in fewer than four times in the entire month.[gap height=”15″]
This means that of our entire EFT member base, 68 percent generates handsome profits for us. The rest, a meagre seven percent, probably cost us more than what they paid for the membership.[gap height=”15″]
But here is the thing …[gap height=”15″]
All of these customers, whether they are come to the salon few times or many, are real opportunities for conversion and upselling. Many of them also purchase upgrade packages as well as products; so, even if the EFT revenue was amiss with the seven percent, they were still profitable to us in the end.[gap height=”15″]
Having a bulletproof revenue stream, along with systems to handle the draft declines, past-dues, and collections is absolutely essential to the success of a tanning salon and allows you to effectively smooth out the slow months.[gap height=”15″]
With a proper EFT setup, there is no need to worry about JASON (July through November). The recurring revenue gives you a good cushion during slow season and makes your business profitable, year ‘round. [gap height=”15″]
A proper portfolio of EFT (monthly billing) packages is the single-most valuable thing you can do for your business.
