In the October, November and December issues (available for reading 24/7/365 at istmagazine.com) I provided details on several “Keys” to Salon Success.
[gap height=”15″]
I began by quoting the brilliant Danish philosopher, Soren Kierkegaard who stated that “Life can only be understood backwards; but it must be lived forwards.”
[gap height=”15″]
I, too, have found that it is only when reflecting on 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. I share with you now several insights and proven strategies that will help you increase your sales of tanning lotions, skin care products and related items.
[gap height=”15″]
Lotion Sales in the USA
[gap height=”15″]
For the typical U.S. salon, the sale of skin care products including tanning lotions, moisturizers, instant bronzers, lip balms and other related products represents 10%-25% of total annual gross sales. Accordingly, a salon that has $200,000 in total annual sales generates $20,000 – $50,000 by sales of lotions and skin care-related products.
[gap height=”15″]
So, why such a disparity between the highs and lows? Why is it that some salons do a great job of selling lotions and skin care products (which can contribute significantly to the bottom line), while others seem to have voluntarily passed up this golden opportunity.
[gap height=”15″]
Sure, you can blame it on the internet and surrender what’s rightfully yours to online sales and product diversion. Or, you can face the challenge head-on with good, old American ingenuity and proven sales and marketing strategies.
[gap height=”15″][gap height=”15″]
Your Lotion Quotient
[gap height=”15″]
First, let’s estimate your maximum lotion and skin care product sales potential by assuming that 100% of all your customers are purchasing and using lotions.
[gap height=”15″]
NOTE: This is conducted only to establish your maximum potential and a point of reference.
[gap height=”15″]
Use eight ounces for the typical bottle of product and then estimate that a tanner will use .5 ounces per session. This allows us to project that an 8oz bottle of lotion will last 16 tanning sessions.
[gap height=”15″]
Next, calculate how many actual tanning sessions your salon recorded during the past 12 months. Based on my research, a ten-bed/booth salon is capable of generating more than 30,000 sessions every year. Using the figure of 30,000 sessions as a guideline, we can then project that if every tanner used lotion for every session, your maximum annual potential for lotion sales is 1,875 bottles. (30,000 sessions/16 session per bottle = 1,875 bottles).
[gap height=”15″]
If we use $50 for the average retail price of a bottle of lotion, this salon has the potential to generate $93,750 per year in lotion sales.
[gap height=”15″]
NOTE: This figure does not include additional sales from moisturizers, shower gels, etc.
[gap height=”15″]
Now, calculate the results for your business based on (a) the actual number of sessions your salon generated, (b) the percentage of people who actually purchased lotions from your business and (c) the average retail price per bottle. Compare your actual sales to your maximum sales potential – and then determine how well your business is doing: your Lotion Quotient.
[gap height=”15″]
Calculate in dollars the percentage of annual sales that result from lotions and skin care products as compared to UV-tanning, spray-tanning, etc. If your lotion sales are closer to the 25% level, congratulations! If they are closer to 10%, then you need to get moving.
[gap height=”15″]
Whenever possible, avoid lowering your prices. Instead, provide more product or services to incentivize sales.
[gap height=”15″]
Yes, I realize that not every tanner purchases lotion – and that not every tanner will use the exact amount of product per session. I offer this calculation for comparison purposes to demonstrate your product sales potential and to help you create realistic goals.
[gap height=”15″]
So, how can you entice more of your customers to purchase and use more lotion and skin care products – while also combating online sales and diversion? Once again, let’s begin with some business math.
[gap height=”15″]
A bottle of lotion that retails for $50 probably costs you less than $20. Most salons are quick to offer cash discounts to stimulate sales. However, when you offer 20% off on a $50 purchase, you give away $10 in profit. Accordingly, you will have an adjusted gross profit of $20 using this example: $50 – $10 = $40; $40 – $20 = $20.
[gap height=”15″][gap height=”15″]
More Service, Less Discounting
[gap height=”15″]
On the other hand, a 15-minute tanning session in a 40-lamp/3-facial bed will cost about 75¢ per session to operate (lamps and electrical). This single session may also have a perceived value of up to $10. If instead of giving 20% off lotions, you offered one (1) free session in the 40-lamp bed, your adjusted gross profit on the bottle of lotion will be $29.25. ($50 – .75 = $49.25; $49.25 – $20 = $29.25)
[gap height=”15″]
That’s $9.25 more in profit on this one transaction, alone! And to redeem their discount, the customer must use your tanning system. When you give cash discounts, customers typically take their savings and spend it at the coffee shop next door. When you provide “free” tanning or spa sessions as the “discount,” your customers must patronize your business and use your equipment to effectively redeem their discount.
[gap height=”15″]
To stimulate sales without lowering prices, review each UV system, spray-tanning system and spa service on your menu on a cost-per-session-to-operate basis. Then, compare this to the perceived value of a single session on each system. Next, select several lotion and skin care products to “bundle” with a “free” session on select systems.
[gap height=”15″]
For example, with your higher-priced product, include one or two free sessions on your highest-level equipment. If you offer red-light systems or spa services, select a related product and do the same. Display the bottles of product on the front counter with signage that advertises the specials. You should see immediate sales!
[gap height=”15″]
Whenever possible, avoid lowering your prices. Instead, provide more product or services to incentivize sales. This strategy can be a most effective sales tool in the fight against online sales and diversion of tanning products.
[gap height=”15″]
To help determine the operating cost of each tanning system and spa service offered in your salon, email jerry@istmagazine.online, and I’ll send you my cost calculator compliments of IST Magazine.
[gap height=”15″][gap height=”15″]
