Salon & Spa Marketing – Pricing & Lessons from Picasso

Groundhog Day - waking up to the same/same every day

Groundhog Day – waking up to the same/same every day

Yesterday was Groundhog Day for me, right down to looking in the mirror and, if I squinted, Bill Murray was looking back at me.

The catalyst for this hallucination was (yet another) conversation with a salon owner terrified of putting her prices up. As she talked, I could feel the anxiety oozing down the phone.

“I can’t put my prices up,” she wailed. “I only put them up six months ago, my customers would leave in droves if I did it again…”

Well, what did they do the last time you put your prices up…did they leave in droves then?

“Well, no…but I just think I’d be too expensive…”

Oh dear.

Entire theses have been written about pricing, there are squadrons of professors who do nothing else but talk about it, analyze it, agonize over it.

But I’ll keep this simple, and put it in terms that any salon owner can understand. This is not about academic study, it’s about what works. So roll up your sleeves, and start thinking. Because buying product at wholesale, adding a margin, and using that as your only guide to pricing ain’t no salon marketing plan.

Stay with me here.

First, there is more misunderstanding, dis-information and plain hogwash written and taught about pricing than almost any other subject under the broad umbrella of ‘business’.

Perhaps the biggest misunderstanding is the difference between value, price and cost – that is, the vast gulf between the value a customer or prospect perceives, the actual price charged, and the real cost to the business owner to deliver that product or service.

And part of the problem for many salon owners is, frankly, the low esteem in which they hold themselves, their ability, professionalism and standing.

It’s why most salon owners reading this would fail the ‘Picasso Test’.

Pablo Picasso

Pablo Picasso

Picasso was sitting at a café in Paris, idly sketching. A woman walked by, recognized him and stopped to ask if he would be so kind as to sketch her, and charge whatever he thought was appropriate.

Picasso obliged, and three minutes later, there it was – an original Picasso.

“That will be 5,000 francs,” Picasso said.

“But it only took you three minutes!” she exclaimed in shock.

“No,” he said calmly, “it took me all my life.”

Of course, had Picasso simply charged for his time on that particular task, he would have had a difficult job justifying the price.

You see, the big mistake most business owners make when figuring out how to price a product or service, is doing it based on what it actually costs them. E.g., they’ll say to themselves, ‘this widget cost me $X to make/buy in/provide, so I’ll ad an 80% markup’.

It is a blinkered, nay, blindfolded way to price anything, because it completely ignores

a)     The value that product or service might have in the eyes of the customer (perceived value)

b)     How it’s price might be lifted considerably by adding more perceived value with low or no-cost items/treatments/services (eg free samples you got from a supplier)

c)      Any other value you can add to it through the messages/stories/testimonials/personal qualifications in all your advertising and promotional messages/flyers/letters…

Price and value are entirely different things, and value is in the eye of the beholder. It has nothing to do with price.

To me, spending $3,000 to live on a boat for a week with friends, miles out to sea – no shops, bars, restaurants, movies – it’s great value. But there are thousands who wouldn’t do that if they were paid to do it.

To my wife, a week in Bali for $1,000 including air fares is great value. Me? I’d rather gouge my own eyes out with a sharp spoon than spend a thousand bucks to meander endlessly around market stalls shopping for cheap sarongs.

All of which brings me to another point about price and value.

The more narrowly you identify your target market, the more precisely you craft your message to match exactly the wants of that target market, the less and less important the issue of price becomes.

Golfers will pay anything to get that perfect swing.

Anglers will move heaven and earth – or pay someone to do it for them – to catch that prize fish.

For example, say you sell cellulite treatments. Which do you think is going to create more value, a headline which says

“Anti-Cellulite Treatments from $495”

Or a headline that says

“For Young Mothers who are Embarrassed About Their Unsightly Cellulite At LAST, The Zero-Pain, Breakthrough New Treatment That Melts Cellulite and Gives You Back Those Smooth Youthful Thighs! WARNING: Men might look at you – and wish.”

In fact, the second headline is deliberately designed to create desire, offer a painless solution to an identifiable problem, and specifically include (young mothers) only those prospects wanted, while deliberately excluding unwanted prospects.

Furthermore, it doesn’t even talk about price, which would only be addressed in terms of value in the body of the piece, backed up of course by all of the components of a good emotional direct response ad – a strong guarantee, scarcity, before and after photos, testimonials etc.

(All of the elements you’ll find in the templates in the Essential Salon Owner’s Marketing Toolkit™)

The last point I want to make about price is this: the purpose of re-inventing what you sell, of creating packages, is to blur the lines of distinction between your business and that of your rival salons, to create for yourself a distinct difference, so that prospects and customers simply cannot compare you with the opposition on price alone.

The better you get at this, the more you tip the playing field in your favour. Business is NOT about playing on a level field. It’s about giving yourself an unfair advantage. Unfair to your competitors, that is.

And reducing the issue of price to the point where it’s a non-issue.

Salon Business Marketing 101: The Mistake of Linear or ‘Consecutive’ Marketing

rockclimbingYesterday we took a call from a distressed Member, a salon who’s been with us for several months.

“I ran two ads in a local magazine, and got zero response.”

Among the dozens of calls and emails we get every week, from salon owners expressing delight and wonder at the results they’re achieving as a result of doing ‘my’ kind of marketing, there’s always one or two who complain they’re not getting the same results. And when I analyse it, it almost always comes down the same thing.

Expecting sensational results from only one piece of activity.

The Inner Circle members who do incredibly well – and there is ample evidence of them throughout this website – are without exception those who live by the creed of Massive Action. Those who fail to emulate those results are, without exception, those who regard marketing their business as something of an ‘experiment’ – as if it’s something that a scientist would do in a lab, they test the water one toe at a time. They do one ‘thing’ – one ad, or one small mailbox flyer, or a single one-page letter to their clients, or a sample run of text messages to a tiny proportion of their database, and somehow expect a stampede of customers.

Such expectation is always a mystery to me. You want BIG results? Do BIG things – and not consecutively, all at once.

This salon business owner is hardly alone. Most salon businesses make the mistake of linear (or consecutive) marketing; doing one ad, flyer or letter, waiting a month to see what happens, and then doing another thing, waiting another month, and seeing what happens with that.

Worse, the mindset of the ‘linear’ marketers is such that not only do they do things one at a time, they also do ’em too small – typical of the timid.

Inner Circle member Cherie Hardman (middle) and staff at Femme Fatale in Jannali, NSW with their Ultraceuticals A-List salon award for 2009

Evidence this, just emailed today, from Inner Circle member Cherie Hardman of Femme Fatale Beauty & Skincare, in Jannali, NSW:

“We have now had the pleasure of being a member over 2 Christmas periods and although our increased profits were more spectacular in Christmas 2008, they were more spread out over the months leading up to Christmas this year (due to the special offers you told us to do in Nov). The big one for me is I have cut back to 3 days a week in the salon, and will take up to 6 months PAID maternity leave this year which would never have been possible before joining WSM. We have definitely noticed that when we  ‘market big’ we receive big. We also mix things up a bit such as we not only have our normal packages with the add on’s but we also created an additional festive overhaul similar to one of the templates in your Toolkit.”

Marketing your salon business cannot be timid. Recently another member complained that she’d ‘tried our kind of marketing and IT doesn’t work’…. she claimed that a particular campaign that had been incontrovertibly proven to generate thousands of extra dollars for a huge number of our Members had completely failed for her. When pressed, she admitted she’d sent it out to ‘about 25 of her clients’.

Twenty five??? That’s ALL? Yep, 25. No wonder it didn’t work, she didn’t give it a chance. The science of marketing is about numbers. And any statistician will tell you that 25 is far too tiny a sample to provide results of any reliability at all.

But the biggest mistake is doing ONE thing, waiting for a result, and then doing the next thing, and so on. The trouble with this strategy should be obvious – by the time you figure out whether the first shot has worked or not, you’ve lost another week, a month, three months, during which time you’ve avoided doing ten other things that could have been tested alongside each other.

Thirty years ago, when Lee Iacocca took over an ailing Chrysler and set about giving the moribund company a kick in the butt, he had at one stage no fewer than 37 different strategies, plans, campaigns and re-organizations underway. It upset a lot of people (inevitably, those resistant to change) but it saved the company.

To those who complain “I can’t handle too many things at once, it’s too chaotic/my staff won’t like it/it’s messy/it’s too much going on”, I say this:

Success is not neat. It IS chaotic. If at the end of your day you’ve done everything you needed to do, your desk is tidy, not a pen or stray bit of paper to offend the eye, and nothing ‘left over’ for tomorrow…. that‘s when you need to worry. That’s when the business is in trouble.

The Space Shuttle goes straight up because it has to. But your salon business needs to zig-zig upwards...

The Space Shuttle goes straight up because it has to. But your salon business needs to zig-zig upwards…

Neither is success linear, a straight line from zero to hero. ALL businesses zig-zag to success, like a mountaineer criss-crossing the face of the mountain, attaining a foot-hold here, a hand-hold over there, then another foothold a little to the right and up a bit.

It’s why the Space Shuttle needs the energy required to power a small South American country for an entire year just to escape gravity – if NASA could climb a mountain to get into space, it would, but there aren’t any convenient hand-holds on the way. It has to do it all at once, straight up.

But your salon business ain’t a rocket ship. You need a LOT of hands and feet, all working together – at the same time – to climb the mountain. If you’re only using one foot, or one hand, at a time, you’re never going to climb over the creek at the bottom, let alone zig-zag up the hill.

Salon Template Superstars – Inner Circle Member of the Week, Susan Vincent – USA

Susan VincentSalon Template Salon Superstars – Inner Circle Member of the Week, Susan Vincent – USA

If more so-called ‘business leaders’ took some lessons from fleet-footed business owners at the small end of town, like Inner Circle member Susan Vincent of Body & Soul Day Spa in Staunton, Virginia, the US might not be wallowing in its own economic misery.

Unlike the CEOs of big, fat companies bailed out by the taxpayer, Susan didn’t ‘know it all’ – she sought – and found – the money-making templates and tools in Worldwide Salon Marketing’s My Social Salon system, including the Essential Salon Owner’s Marketing Toolkit® and USED them:

“As of June 2009, with the recession in full force, we are still experiencing a 20% growth rate – we couldn’t be happier!”

Susan joined WSM and got her Toolkit nearly two years ago, and immediately embraced its no-nonsense style of direct marketing, advertising, salon/spa marketing plans and sales strategies. But importantly, she did it with a pulse, and used it as a spur to seek more knowledge about the whole world of direct response.

“Although the recession hasn’t hit us like it has in some parts of the US, the community here has embraced that (recession) mindset.

“This has created a very difficult environment for such a small spa. A couple of years ago, a Dan Kennedy mentor of mine recommended that I start a print newsletter. He knew I was a writer and encouraged me to write about my life in the newsletter. I really thought he was nuts. After all, email was the rage.

“Why would anyone want to read a print newsletter? But more to the point, why would anyone want to read about my boring life? Turns out, he was spot on.

“A year after the newsletter’s debut, we grew 35%. Our clients raved about it. They loved the funny, inspirational stories I wrote, much to my surprise. But it wasn’t just that.

“I combined the newsletter stories with great offers. Worldwide Salon Marketing helped me to understand how to craft an offer and combine a killer guarantee to increase sales.”

In fact, so successful has Susan’s monthly newsletter proven to be for her spa, she’s about to launch a ‘done-for-you’ newsletter service for other beauty businesses. She’ll do almost all the writing for you, with a couple of gaps to use for your own offers, and all you’ll have to do is get it printed and mailed.

The fine details are being ironed out over the next few weeks. We’ll let you know when it’s ready to go.

Salon Marketing Plan Strategy: Has the Gorilla Got You in its Grip?

Salon Marketing Plan Strategy: Has the Gorilla Got You in its Grip?

Is it little wonder that so many in the hair and beauty business find themselves in more trouble than a blind, one-legged dog?

Every week, our fax machine pours forth with a stream of ‘HELP’ letters, from hair stylists and estheticians who’ve suddenly found themselves owning a salon, with not a clue about a marketing plan for their salon or how to generate business.

Like this one:

“Dear Greg, My name is (name withheld), I’ve just purchased a cute little hair salon in (location witheld) on the Gold Coast – it settles in two weeks. “The lady I purchased it from has let the salon run down, she has only been taking about $2,500 a week. I’m so worried that there will be no clients in chairs when I open my doors on June 2nd. I have very little money to play with so I was just going to do a discounted mail drop and hope for the best.
“I have just watched your DVD and I don’t know what the hell to do – I feel sick now, knowing that my mail drop won’t work. I think I have bitten off more than I can chew. I’m keeping the apprentice on but I don’t know how I will pay her if I don’t get bums on seats.
“Please, please, please can you help me so I don’t fail before I start.”

Without wishing to sound like a broken record (I do) I’ll keep nagging until I’m blue in the face. Fancy fit-outs, expensive equipment, swish furniture, state-of-the-art software systems, up-market products, pretty pictures on the walls, flat screen TVs…. NONE of that stuff matters a damn unless you know how to get customers.

Has your salon turned into a gorilla?

Has your salon turned into a gorilla?

In an average, garden variety day, we interview at least half a dozen applicants for Inner Circle membership. And I kid you not, nearly half of those fall into the category above – having bought or in the process of buying themselves a job because ‘I always wanted to own my own business’, and only too late discovering that the business owns them, clasping them ever-tighter to its breast like a hairy, grumpy gorilla intent on squeezing the life out of its prey.

Far too many stylists and aestheticians fall victim to the romantic notion of ‘being my own boss’, without for a moment employing what I call ‘accurate thinking’ – e.g., “I need X clients per week/month, each spending an average of $Y, to pay the bills. Then I need another Z of those clients in order to give me a profit. How do I get the extra clients I need?”

There is ONLY one way of getting extra clients. And that’s simply a marketing plan. (And before you diss me for failing to mention ‘referrals’ – what are referrals if they’re not word-of-mouth marketing???)

Treat your business like a 10,000 pound gorilla. Your very FIRST priority is to feed it a never-ending smorgasbord of juicy, ripe customers. Every single day. Then shut the door while it eats, and go get some more.

And you can’t be out hunting for customers while you’re inside the beast, working on the tools, digesting the food your gorilla is swallowing.

 Check out My Social Salon here!