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Maggie Rants [and Raves]

Culling Your Client List

by Maggie Franklin | October 6, 2014 | Bookmark +

I have long found interesting, and often lamented, that the standard business advice given to other industries seems to be taboo for ours.

Concepts such as indirect competition are swept under carpets in our business. We have no competition. Those less-than-optimum salons? They are not our competition. We hear it over and over again.

WAKE UP! They are our competition. If any other salon is getting clients that you want or need — they are your competition. But likewise, so is that pub down the street where your target demographic goes for a pint after work. And so is that boutique downtown that sells those really cute purses. And so is the movie theater, the electric company, and the dance studio where your clients’ daughters dance. Anything that takes money out of your target demographic’s pockets and puts it anywhere other than in your pocket is your competition.

But when was the last time you sat through a “business” class at a tradeshow that told you that?

Another interesting concept — one I had not heard before — came from the BF in relation to “common wisdom” in his industry — the automotive industry. He said it is an oft-used axiom that each year an auto repair business needs to cull the bottom 10% of their customers and the top 10% of their customers.

This spawned much discussion in our tiny kitchen (like generations of yesteryear, the kitchen is the heart of our home). Why the top 10%?

Well, the reasoning in his business is that when you look hard at the top money-making customers, you often realize they cost more than they bring in. Mostly in terms of labor. These tend to be the customers who pop in every week or so to have a technician “look at” that turn signal that doesn’t flash, or “just take a look at” the tire pressure, or “could you just pop this back on for me?” and so on. These customers might bring in a lot of money each year compared to other customers, but when you look at how many times they’ve occupied a technician’s time for free because they think they are entitled to it under the auspices of “customer service” you start to realize that the dollars they represent in the ledger don’t properly represent the time they’ve taken.

How does that apply to us? I started thinking about it. I made a quick mental list in my head of who my top 10% are from my client list. Then I started doing math.

I can absolutely see the wisdom of this business advice. I know I have had clients like that in the past — the ones who think they are doing me a favor by coming in for a polish change between fills, not realizing that a polish change takes nearly as long as a fill, but doesn’t cost as much. Those clients aren’t helping me out, they’re taking up space in the schedule that could be filled by another client who needs a fill.

I have been doing this a long time now. I have been there and done that a thousand times, a thousand ways. Maybe my personal top 10% doesn’t fit that paradigm because I figured out that formula a decade ago.

I am pleased to say that my personal top 10% represents excellent clients who don’t cost more than they pay when the time versus money graph is all charted out.

But what about everyone else’s? What about yours? Should you be finding ways of taking control of your time and making sure you get a fair price for every minute you spend at the salon?

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