Start by giving clients know-'em'dead service instead of lowering your prices.
A few years back, a new type of nail salon offering no-frills, fast-food type service and rock-bottom prices sprang up all over the country. Today it’s impossible to stroll along Lexington, Broadway, or any other New York City street without being handed at least one colorful flyer advertising bargain nail services. Price wars also erupted in cities throughout California when discount operations muscled in on existing salons’ territories. Even rural areas have dad to adjust to cut-rate nail salons popping open as fast as garage doors on a Monday morning. Instead of steering clear of these low-priced competitors – who are a fact of life –many salon owners make the mistake of expending negative energy trying to combat them. They send spies to see what type of services their competitors offer. They slash prices, leading to price wars that often end in their own shops closing.
Despite the annoyance of having a discount operation in your neighborhood, experts advise salon owners not to compete or feel threatened by them. “We have to set ourselves apart from low-priced salons,” said one technician. “They’re giving the entire industry a bad name and are making it tough on those of us who really care about the health and well-being of our clients.” A salon that relies on low prices to attract clients usually must sacrifice quality and service. Unskilled technicians are hired to work long hours for little pay. Clients are service in compact areas with little or no ventilation. Product quality is often poor, and clients are serviced regardless of whether their nails are healthy or riddled with fungal infections.
Some salon owners and technicians are so irate over the unhealthy conditions in some of these discount operations that they’ve taken action, Groups have formed in New York and California, where salons have been hit the hardest by unscrupulous discounters. Together they’re trying to enact legislation that would ultimately inhibit the opening (and in some cases hasten the closing) of “sweat shop” operations.
In some cases, salon owners resort to discounting because of their own inexperience or poor management skills. When business slows they panic and slash prices to generate new business. Often, they don’t realize they’ve committed business suicide until it’s too late. They fail to recognize that discounting is an endless war with many casualties and no winners. They don’t understand that price scuffles encourage clients to look at dollar signs instead of quality service. They don’t see that they’re undermining the professionalism of the nail industry, and that the bottom line is that discounting is unprofitable.
IT DOESN’T ADD UP
One mistaken belief of price war combatant is that low prices generate so much business that they recover the initial money lost. For example, if a shop that normally charges $45 for a full set suddenly becomes embroiled in a price war that incites the owner to drop rates to $30; that means a $150 less a day for the business. That salon now has to service five more people a day just to earn the same money it did when it serviced 10. In addition, the salon has to figure in higher pay for the technician who is now servicing 15 clients instead of 10, as well as additional electricity, product, and other overhead expenses that are used for each client. Expenses climb, profits drop, and the salon suffers.
Instead of lowering prices, salon owners and technicians need to concentrate on keeping their clients satisfied, if your technicians are professional and produce quality work, a competitor with low prices should really have little effect on your business. You may lose a smattering of clients to the lure of discounting, but most clients won’t budge from your waiting room.
Customers might travel clear across town just to save 50% on a dress, but nail salons attract clients who will travel even further to be with a technician they like and trust. As one salon owner says. “This type of commitment does not come from low prices. It comes from delivering quality service with a professional attitude.”
What Does the Upscale Client Really Want?
The image of that highly desirable species – the upscale client – is a demanding client who will pay whatever you charge but who has very high ideals. In reality, there is little chance that the woman who regularly pays more than $50 for a service will suddenly change salons based on price. That $15.95 price will appeal to the price-only shopper, for whom the cost of the service is the number one consideration.
The high-end consumer expects a certain level of service and is willing to pay a certain amount to maintain that level. An informal survey of women who are regular nail salon clients provided comments that should not surprise the observant tech or salon owner.
What that means is that when I walk into the salon l feel appreciated. I sense that everyone in the shop knows that I come there to be pampered. I am always on a tight schedule and I always seem to be running late. I want patience and some TLC. My hands have to look good in court. My clients expect that. And I think other attorneys expect it. Frankly, I have to look as it I make more money than I actually do. If it costs me $60 every week, I’ll pay it.”--Attorney
“I don’t have a career or a salary, but I have to look good when I’m asking community leaders to help me raise money for local organizations. One of the secrets of asking for money is not looking like you need it. I also expect up-to-date service. I expect the person who does my nails to be skilled. I want the little niceties – a drink, an escort to my car, something interesting to read while I wait. I want the salon to make me feel comfortable. And I want to feel they really want me to be happy.”--Full-time mother and volunteer
“I wouldn’t switch to one of those budget salons. I’d skip an evening out first. I chose a salon with a very sophisticated image. My feeling is that if I get my nails done in an upscale salon. I’ll look and feel upscale. I don’t want to look or feel “budget” when I’m out in the business world. You need that extra edge. If I feel just that much more confident than the next person, I’ll go farther and faster.--Real estate broker
A high-end salon cannot rest on its laurels. The salon owner must be able to answer must be able to answer the question (to herself at least): How can I justify my price structure?
A salon has to back up its image with information as well as providing an array of services not offered, by the competition. If the competition includes other upscale salons, the salon must match and then exceed the level of service and technical competence.
Put simply, the more you charge, the more you have to provide. Sometimes little things can mean the difference of keeping a client and losing her to the salon a mile away. For example, the salon that offers a 24-hour phone line for changing appointments or emergency repairs has a definite edge over the shop that doesn’t. The costs are small but the rewards in goodwill can be large.
Encourage or sponsor continuing education for your technicians. When you attend a convention or have in-house training from a manufacturer’s rep, don’t be shy about letting your patrons know about it. Let them know that you are learning a new technique or trying out a new product for their benefit.
There are things that you do not tell a client about your business costs. For example, you will be paying a higher rent than a discount salon because you’re in a nicer part of town or because you have good walk-by access or signage, a view, or close parking. You pay for insurance, which keeps you and your clients safe. Your hiring process is more rigorous, evident in the high-quality technicians you employ even when new. Perhaps you have a compensation structure that allows technicians to take home more from your salon than they might earn elsewhere. This allows you to attract high-quality employees, but also contributes to high overhead. If your employees are not independent contractors, you are also paying payroll taxes and other mandatory insurances and taxes.
You may be paying more for your supplies because you buy from a manufacturer or distributor who offers you education and special services. Those costs are eventually passed on to clients in some form.
An upscale client wants what we all want, but an upscale client is willing to pay for it.
Knowledgeable salon owners realize that the nature of the nail business revolves around service not price. The proof is in the number of salons all over the country that keep expanding despite increased competition. As one salon owner says, “I once raised my prices when a competitor lowered hers and found it was effective in attracting new clients. People actually perceived our service as being better because they paid more for it.”
DISCOVER WHO YOUR CLIENTS ARE
Low prices attract clients who care about saving money. Your clients visit the salon for completely different reasons. Understanding who your clients are and why they choose your salon is important.
Develop a profile of clients who are happy with your services. For example, if you lose a bunch of clients who prefer the loud rock music and bright interior of your competitor, concentrate on attracting more clients who appreciate your classical music and soothing atmosphere.
If you’re unsure about the wants and needs of your clients, ask them to describe their ideal salon. What would it look like? Create a questionnaire for them to fill out and offer a free bottle of polish or other incentive to everyone who completes it.
Once you develop a client profile, create services that cater directly to their needs. If clients say they’d like to be able to conduct business from the salon, think about installing additional telephone extensions. If clients like to watch soap operas while getting their nails done, consider purchasing a television set. Salons that develop innovative ways to keep their clients happy are the ones that thrive year after year. Tap into what motivates your clients to buy and you can uncover a gold mine.
Discounters aren’t interested in creating a special atmosphere or ambience – but you should be. There are salons that concentrate on every detail of their décor so a client can’t help but react positively. For example, some salons invest much energy in creating a calm, soothing atmosphere. They’re so successful you can feel stress melt away as soon as you walk through the door. Don’t underestimate what a welcoming atmosphere you create with the smallest of gestures, like a smile and a hello from the receptionist.
SERVICE – GOING THAT EXTRA MILE
On the retailing battlefront where huge discounters like Wal-Mart, K-Mart, and Phar-Mor are wreaking havoc on small to middle-size retailers, there are stores like Nordstrom that refuse to lower their prices yet continue to see their profits grow. Their secret? Excellent customer service.
Discounters can offer only low prices, not specialized service. Salon owners who want to compete without price cutting provide such extras as beverages or snacks the moment a client enters the shop. They never keep them waiting more than a few minutes, and they go out of their way to keep clients comfortable throughout the service. Other salon owners go an extra step by offering jewelry cleaning, convenient evening and weekend hours, a thorough hand or foot massage, a reminder phone call the night before the client’s appointment, or one-stop shopping for her beauty needs.
Another way to steamroll the competition is the personal touch showing clients you care. Send birthday, anniversary and holiday greeting cards; have someone clean their car windshield if it’s snowing; buy a few umbrellas to lend clients who get caught in a sudden downpour; keep clients informed about the latest industry trends and developments; use high-quality products at all times.
If a client isn’t happy with a polish color, change it right away. If a client suddenly remembers she forgot to make an important phone call and her nails are still wet, offer to make the call for her. Know your clients’ names, remember what they drink, and know what colors they like. If someone has a sick spouse or has just returned from an important trip, remember to ask about it. Individual attention makes people feel special, and to most clients extra service equals money well spent.
Still another professional courtesy discounters don’t offer clients is education and long-term nail care. When your dentist takes the time to show you how to brush and floss you feel like she really cares. The same is true for your clients. Show them what they can do to maintain their nails. Offer a newsletter or brochure explaining each service you offer. Conduct consultations with new clients. Install a VCR and play tapes giving tips on home nail care. Make yourself a part of your clients’ health regime, and they’ll keep coming back.
If you ever have doubts about your ability to compete with discount salons, go have a look at one. Guaranteed there is a glaring lack of attention to proper sanitation procedures. What you offer your clients is a clean salon out of which she isn’t going to get a fungal infection, or worse.
Concentrate on improving and personalizing salon services and you’ll be around to see a number of discounters hang “out of business” signs in their windows. And the next time a technician comes running into the salon, yelling, “A new salon is only charging $10 and the lines extend all the way around the block!” sit this employee down, get her a cup of tea, and discuss ways she can provide better service to her clients.