[gap height=”15″]One of my favorite stories that I like to tell during sales seminars is that of a Mr. Orville “Oil-Patch” Hatch.
[gap height=”15″]I first heard the rags-to-riches tale (garnished with the most agonizing of twists) while enjoying adult beverages at PJ Clarke’s in New York City, way back around 1980.
[gap height=”15″]The original PJ’s, then and now, is an old-school businessmen’s saloon (think “Mad Men”) where up-and-comers, wannabes and has-beens, as well as the real McCoys all gather to trade war stories and business cards – their ears collectively perked in the hopes of capturing a tidbit of loose-lipped gossip that might provide an insider trading tip or a lead on the next political scandal.
[gap height=”15″]I actually landed my first real job with a New York ad agency via connections made at PJ’s.
[gap height=”15″]As the story goes, Hatch was a dirt-poor sheep rancher scratching out a living somewhere in the middle of America’s depression-ravaged dust bowl (circa 1930 something). Though hard working and honest, he struggled financially his entire life while trying his best to raise his large family.
[gap height=”15″]As fate would have it, one day, representatives from a major oil company appeared on his doorstep with an amazing offer. Oil had been discovered in the area and they were prepared to pay Hatch millions of dollars for his land. Without hesitation, he seized the opportunity and raked the table – big time. However, his joy was fleeting and quickly turned to sorrow and disappointment when, within just a few months of receiving his millions, Hatch developed a severe case of pneumonia and was given just a few weeks to live. Family and friends gathered to comfort him, and during his last days, Hatch spoke candidly about his roller coaster experience. Then, just days before he died, he made the most profound observation. “You know,” Hatch said, “the really sad thing is that I was always a millionaire – I just didn’t know it. The oil was under my feet all these years, and it took a perfect stranger to point it out to me.”
[gap height=”15″]That story has stuck with me, and I have found that the lesson learned can be applied to many situations in life and in business. For example: today, salon owners seem to be always scrambling to attract new customers. At the same time, they may not be maximizing the sales opportunities presented by the thousands of existing customers who already populate their databases.
[gap height=”15″]Just like valuable oil pooling directly beneath your feet, your existing database can me “mined” to increase sales and profits and attract new customers.
[gap height=”15″]Over the past 30 years, I have conducted thousands of business analyses. And I’m still amazed at the number of salon owners who don’t know how many active customers they have in their database. Worse yet, they’re also unaware of how much their customers are spending with their business each year.
[gap height=”15″]This is one of the most important keys to the success of any business. And the information is usually readily available as a report feature of any good salon operator software program.
[gap height=”15″]Equally critical is knowing what to do with this information once you begin tapping into it. My first suggestion is to divide your customers into categories according to their spending level. For example, those who spend $1-$24 per year; $25-$49; $50-$74; $75-$99, and so on.
[gap height=”15″]This will allow you to see how many customers comprise the bulk of your revenue – and where the easiest opportunities exist for increasing sales.
[gap height=”25″]Baby Steps
[gap height=”15″]Let’s say that you have 1,000 active customers in your database who in the past 12 months spent an average of $100 each on tanning, skin care and wellness products. And of those 1,000 customers, 300 of them spent less than $50 last year.
[gap height=”15″]Try developing a sales promotion targeted at those 300 people. If you could entice them all to spend just $5 more per month ($60 per year), that would provide you with an additional $18,000 per year in revenue! That may be enough to pay your rent for the year!
[gap height=”25″]Bring a Friend Free
[gap height=”15″]You can also use your existing “oil well’ to attract new business. One of the most effective marketing tools (which has been used in the fitness industry for years) is offering existing customers the opportunity to “bring a friend free” when they come to you for a tanning session.
[gap height=”15″]And, I’m not just talking about doling out referral cards (which can be highly effective when placed on the tanning bed with each session). What I am referring to is the ongoing practice that allows those who purchase higher-level EFT packages the privilege of bringing a friend free – anytime they tan. This strategy encourages your existing database to become a marketing army for your business. And all it really costs you is “time.”
[gap height=”15″]Based on surveys of salons that have offered such programs, many of the “friends” will purchase their own tanning packages after just a few free visits. Test the waters. Offer the program for a week or two before rolling out. Measure results and fine tune as needed.
[gap height=”15″]You don’t have to spend a fortune on advertising to increase sales and profits. Simply reach out to your existing customers with effective, well-conceived promotions.
[gap height=”15″]Just like valuable oil pooling directly beneath your feet, your existing database can me “mined” to increase sales and profits and attract new customers.
[gap height=”15″]If you would like to learn more about these and other effective marketing programs, email jerry@istmagazine.online.
