Profit is a slippery customer, isn’t it?
As Salon Owners we can’t survive without it, can we, but most of us learn the hard way that making a profit consistently isn’t the easiest thing to do, even when the economy is strong … so I want you to spend a few seconds imagining just what’s happening in salons, now there’s a recession to beat!
If you’re imagining a lot of worried people working very hard to attract new clients and hang on to existing clients, you’d be right.
The thing is their focus is quite understandably on keeping the money coming in, so they can pay the bills that never seem to go away and ultimately … survive another year in business.
But is focussing on survival the right thing to do?
If we asked teenager Vicky Pollard from the massively successful TV series Little Britain this question she’d say … “YEAH but NO but YEAH but NO.”
And the amazing thing is she’d be right!
YEAH because attracting new clients and hanging on to the clients you’ve already got will always be important, but NO because the focus on survival makes far too many salon owners look in the wrong place for the answers to the challenge of beating the recession.
What do I mean
I mean that chasing turnover costs money! Think about it. Every time you advertise, it costs you money. Every time you offer a discount, it costs you money. Every time you give away a FREE service or gift … it costs you money.
It does cost you money; but generating extra turnover using powerful marketing is an essential part of running your business, especially in a recession – and your Phorest system with it’s powerful built in marketing tools is an essential tool to help you – but you have to remember, it only makes sense to spend that money … when you’ve got a decent profit margin to pay for it.
Sadly that’s exactly what most salon owners don’t have
A DECENT BUILT IN PROFIT MARGIN.
Too many salon owners have been scared to put their prices up … but their costs are going up all the time. This inevitably means that profit margins are being squeezed and on top of that pressure comes the pressure to give away more discount/freebies … No wonder it’s starting to hurt.
What’s the answer?
If you want to use offers to attract new business and motivate existing clients to visit and spend more … PUT YOUR PRICES UP SO YOU CAN DO THEM AT A PROFIT!
If you’re thinking I couldn’t possibly do that then I’d ask … why not!
After all you’re surrounded by businesses that are doing it all the time. You’re surrounded by “half price … plus an extra 10% this weekend only, with nothing to pay for the first year …” offers aren’t you and the discounts are genuine, but the original asking prices are not.
THEY ARE DELIBERATELY INFLATED TO GIVE THEM THE MARGINS TO PAY FOR THEIR OFFERS.
Now we know you probably need to do it … I’ll be back next week to talk about ‘How’ to put your prices up without causing a riot.