July 2008

Shannon Wells

Beauty Business Buzz | by Shannon Wells


Combating Diversion: Understand Why
Your Clients Should Purchase Retail From You

You may have read reports or even heard your distributor talk about the million-dollar problem of diversion. You may have even stopped to consider how it affects your business.

Sadly, that’s where the process usually ends. Many salons and spas think of the diversion problem as something bigger than they can deal with and have no idea if they can actually make a difference.

You can actually get on the front lines to battle diversion. How? By gaining and keeping retail clients.

If the major stores and chains see a dramatic decrease in the sales of professional salon products, they may consider pulling them from their shelves. It is, however, because they actually do sell a good amount of professional retail products that the Wal-Marts and Targets out there carry professional retail products. The little label on the shampoo bottle that states, “Product not guaranteed unless sold in a professional salon or spa,” does little to deter the average consumer from buying a product in a non-professional store. So what can you do to help?

It is important to understand why diversion is successful. Before we talk about what you can do to help combat diversion, it is important to step into the shoes of the average consumer and understand why they currently see diversion as a benefit.
First, it is convenient for the customer. While not every woman can say she visits a hair salon or spa on a regular basis, most frequent their local grocery store. The fact that a consumer can purchase so-called quality retail products at the same time they pick up something for dinner has made the problem rampant.

Second, there is the clients’ price perception. While purchasing a professional retail product at a wholesale superstore does not always mean the product is actually cheaper, the perception is that the consumer is buying the product for the best possible price. This is despite the fact most wholesale stores demand the same percentage mark up as most salons or spas.

Third, people like the no pressure, no hassle shopping at their local store. They would rather avoid any store where people are hovering and asking if they can help every five seconds. Consumers know that purchasing professional products from a major chain means no hassle and no actual human interaction.

You may be thinking, “But I don’t talk to anyone when they shop for retail in my business.” This could actually be part of the problem, as you will read below. If there were no difference between your retail and the grocery store, why would anyone make the extra stop it takes to come to you?

Are you ready for combat? Here are some weapons. Now that you have a feel for why your clients are purchasing retail in places other than your salon or spa, let’s talk about some reasons that they should purchase from you.

Know what you’re talking about. People want to look good. Why then do they choose to rely on their own knowledge or trial and error when selecting the products they use to groom themselves? It is your job as a beauty professional to know the products you carry in your business and to be able to explain why someone should use them.

When your clients accept you as their expert, they depend on you to tell them what will give them the best results. This means you have to be knowledgeable about the product and you have to develop an ear for discerning what the client wants and needs. Once this relationship is established, you have a client for life, one that knows they can depend on you for solid advice. Then they would never consider buying random products off the shelf of a grocery store.

Make the recommendation every time, with every client. After you’ve made a recommendation to your client, what’s to stop them from eventually purchasing your recommended product somewhere else? The key is really taking the time to listen to the client’s needs and making personal recommendations on every visit. Seasons change, clients attempt new haircuts and colors; for each change, there is a great new product to recommend.

If you are recommending the same shampoo to all of your clients, it may be time to look at your product knowledge. While the actual lines carried in a salon or spa may dictate some of what you recommend, make sure you are knowledgeable about all the products and how they affect different scenarios. We have a great opportunity to be the testers of products so our clients don’t have to experiment.

Demonstration and application: It’s one thing to recommend a product, it’s an entirely different thing to experience the product and be shown the difference the product will make. Demonstrate why a client should use the product, how they should use it. This truly creates a professional relationship and reinforces the value of your recommendations. People love to feel value. For the same price of the shampoo they buy in a grocery store, they are able to receive an education and some expertise when they purchase from you.

Follow-up and the human factor: The last reason a consumer should buy professional products from a professional is the human factor, which they will not experience outside of a salon or spa. When you sell retail products, especially if it is the client’s first purchase, it is important to follow up and guarantee the experience you created for them. Whether you follow up with a phone call—which might really blow them away—or ask them how the product worked out on their next visit, completing the sale of retail with a follow-up is essential in distinguishing the professional retail relationship.

The concept of diversion is as simple as the law of supply and demand. Because there is a demand for retail product sales by major chains, the problem will continue to grow. We must take the time to educate the professional beauty industry on the importance of retail. We must learn to successfully incorporate retail recommendations as an aspect of servicing clients. Only then will there be a shift in consumer perception and, eventually, the overall diversion issue.

If salon and spa professionals truly view and relate to themselves as the professionals they are, I believe we could decrease diversion and divert some of the well-earned retail profit back to the pockets of professionals in the beauty industry.

Shannon Wells is the Marketing Manager of Your Beauty Network, a beauty industry ongoing business support service. The company offers a membership based business support resource. For more information, call 866-364-4926 or email shannon@ybn.com.