The brilliant Danish philosopher, Soren Kierkegaard, stated that life can only be understood backwards; but it must be lived forwards. I first read his words in my early 20s and they have proven to be accurate, as well as a highly reliable compass for keeping me on course.
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It is only when we look back, over past successes and failures, that we truly learn to appreciate the value of these experiences, the wisdom they provide and the courage they instill to persevere.
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Over the past 30 years, I have witnessed many changes in the indoor tanning industry. It’s been a roller-coaster ride of highs and lows, and a seemingly never-ending parade of amazing new products and advancing technology. Unfortunately, we’ve also seen more than our share of gimmicks and quackery.
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And while each of us is individually responsible for achieving our own personal success, as well as “owning” the consequences of the decisions we make, there is much to be said for heeding the advice of those who have actually worked long enough to look backwards – and have weathered life’s many storms.
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Having been both an employee and employer, business owner, distributor, manufacturer, market analyst and product developer in what I respectfully refer to as the Sun Business, I have been provided with a unique vantage point from which to observe our industry’s inner workings. I share with you now, in concise format, some of my thoughts on how to achieve success in the Sun Business.
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1. Equipment
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Obviously, you must utilize high-performance, modern, reliable equipment to survive in today’s competitive business climate. However, good equipment alone will not guarantee that your salon will thrive. I have seen salons open with brand new, top-of-the-line equipment – and fail miserably.
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It’s also a fact that many of today’s most successful salons (including several big chains) continue to do extremely well featuring a mix of newer equipment and systems that are often more than ten years old. (Granted they keep the equipment spotlessly clean, re-lamp frequently and replace acrylics before they craze over with spider webs.) However, if featuring the latest and greatest equipment alone was enough to achieve Sun Business success, then, everyone would be doing it.
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While the new high-tech mega-beds will, no doubt, provide years of profit-generating potential and a huge competitive edge, it is how you offer that equipment that truly provides the greatest opportunities for success.
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The beds and booths you feature are more than just remarkable tanning machines. They can also be your most effective marketing tools and sales incentives for everything in the salon – including sessions, packages, memberships and ancillary products.
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Basic Example
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Your Level-1 Monthly Package should include one Level-5 session (or your highest level offered) FREE with the purchase. Do not refer to the Level-5 session as an “upgrade,” as this will only lessen the perceived value. Instead, list its value at the full, single session price.
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The offer should be: “Purchase One Month of Level-1 Tanning for $20, Get (1) Level-5 Session, a $20 Value – FREE!” The customer perceives this as getting the month of Level-1 Tanning for free.
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Avoid Lowering Your Prices – Just Provide More Service or Product.
In the Sun Business, the raw commodity we sell is not tanning – it is TIME. And no salon operates at 100% capacity, 100% of the TIME. Therefore, you have plenty of valuable TIME to use as incentive to sell more products and services – all of the TIME.
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Depending on your equipment mix, you can create a myriad of packages that use every level of equipment to sell everything in the salon. And, if you offer spa services such as red-light sessions, infrared saunas, etc., be sure to include those in the promotional mix, as well.
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This is just one example, and the first “click” in the lock on the Door to Success! (We’ll show you how to receive more proven strategies at the end of this article.)
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2. Employees, Management
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A bad wait-staff can ruin the best gourmet meal. And a great wait-staff can make even mediocre food feel like a five-star dining experience. Accordingly, investing in the most advanced equipment will be for naught if your salon is not run professionally.
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I work with many highly-profitable salon operators who continue to enjoy success year after year using a combination of newer and older equipment. They are able to do so, in part, because they are supported by a professional management team and enthusiastic, hard-working staff. And to support their staff, they have strategically designed their business to function as an effective “buying environment” and not just a “selling environment.”
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While “multi-tasking” may be a favorite buzzword for life’s maniacal overachievers – no one is really good at it. By utilizing sales strategies and incentives that motivate your customers to initiate the first steps in the “buying and selling” process, you free up your staff to focus on the most important part of the business: providing first-class customer service.
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Your staff needs to be knowledgeable, friendly and attentive. And of course, they need to be able to SELL. However, it can be very difficult for them to do their jobs effectively when they are chasing customers around the salon shouting, “Smell this!” and “Try this!”
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And sooner or later, your key staff and top salespeople will leave you. By creating an effective buying environment, your business can still operate profitably and effectively regardless of who is behind the counter.
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If you build it, they will come. But that doesn’t guarantee they will stay. I have found that when a business focuses on making first-class customer service the No.1 priority, their customers will, in-turn, spend more freely and actually enjoy the process.
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Did you hear another “click?” Turn the handle … the Door to Success is almost unlocked! (At the end of this article, we’ll provide specific ideas for creating the Ultimate Buying Environment.)
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3. Pricing Structure
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The price points you create for selling your products and services should not be dictated by what the competitor down the street is charging. Your prices should be determined by using sound accounting principles that take factor in all of your fixed expenses, as well as the profit margin you need to operate in to achieve your financial goals. And to start, focus on methods to maximize the dollars spent per customer per year. For example, if your fixed overhead (rent, labor, insurance, phones, etc.) is $8,000 per month ($96,000 per year), you need to determine how many sessions, packages and memberships you must sell to cover these expenses.
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Basically, $96,000 represents 1,000 customers spending $96 per year in your salon on services. If you believe this is achievable given your population, demographics and sales ability, you then need to develop a pricing structure that will allow you to generate this amount in the fastest and most effective manner.
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The typical American tanning salon generates between $75 and $100 in service sales per customer per year. The industry’s top guns are generating $200 per customer per year.
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I recently performed a business analysis on a well-run, profitable salon. The owner was shocked to realize that she was achieving her success by averaging just $98 per customer per year. I asked if she had a big sign in her front window that stated: UNLIMITED TANNING: $98 PER YEAR! She replied adamantly, “Of course not!” I politely stated, “Yes you do – you just didn’t know it.”
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Review your packages and products and determine your best-sellers. Next, calculate their contributions to the bottom line. You will probably discover that just a handful of packages and products are responsible for covering the majority of your overhead. Focus on selling more of those, and at the same time, eliminate those that are not selling.
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You got it … this third click brings you one step closer to unlocking the Door to Success!
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Next month, we will continue turning the lock: Marketing & Advertising, Skin Care & Accessory Sales, and Location & Customer Demographics
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For more information on the topics covered above, write to jerry@istmagazine.online.
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