October 2008

-

Better Business | by Neil Ducoff

 

Create a Holiday Crush and Reap the Benefits of the Season

Now is the time to begin marketing your salon or spa for the end-of-year rush.

Preparing for the holidays requires planning if you want to reap all the benefits a successful holiday season can offer.

That’s why now is the time to focus on the essentials of holiday planning: from service and retail, goal setting, to retaining all those valuable first-time clients. And don’t forget to plan your best gift certificate strategies, from promotion to redemption.

To make the most of the holidays, first consider historical performance. What kind of numbers has your salon or spa posted in the past?

Decide which areas need improvement: preliminary marketing, phone coverage, technical consistency, anything at all. Which services, products and technicians are traditionally in great demand, and are therefore overburdened during the holidays? And perhaps the most important question is what to do about it all.

Your holiday strategy will consist of several components. For example, you need a product plan, including merchandising, sales scripts, packaging and promotional objectives. Likewise, you need a comprehensive service plan. Consider whether the holidays represent an appropriate time to launch new services, or to stick with what works.

And if service sales really go through the roof in the next few months, are there enough technicians on your team to satisfy client demand? Historical data will be your best guide for determining where to set your holiday sights.

Holiday Merchandising and Gift Certificate Strategies: The word “merchandising” usually conjures images of a sparkling display case at an immaculate desk, or of forward-facing items placed three inches apart on the shelves. Those are important practical elements of a merchandising plan, but there are external less known elements that are just as important.

The first thing you must merchandise is the business itself. A shiny, happy salon is attractive to clients. But a shiny, happy salon is not just about keeping the floors swept and displays dusted. It begins behind the scenes, with the things clients don’t see. It begins in the back room and weekly huddles, where team members establish codes of conduct, dress, interaction with clients, customer service initiatives… when you stop to make your list you may be surprised at how many things are on it.

Hectic holiday schedules make it even more interesting. So it’s especially important to establish rules of conduct for dealing with frazzled, time conscious clients. Some will be delighted with everything the salon offers; others decidedly won’t be. Either way, the holiday season is a time for infinite patience from salon owners and team. Client perception will determine whether the business truly capitalizes on holiday client traffic.

How to Retain Those First Time Holiday Clients: All first time clients challenge many salons and spas, but first-time holiday clients even more so.

Ah, the holidays. For many in the retail and service industries, there is no substitute for—and no way to live without—the financial boon provided by consumers possessed by the spirit of giving. Some salon and spa businesses are absolutely dependent on the gift certificate driven cash influx they usually experience in November and December.

Then the clients come and here begins the real test: what happens to these clients? Do hundreds or even thousands of first-time faces disappear? A few questions and keystrokes on the phones and at the point of sale can capture enough information to give you an edge on turning them into repeat visitors. The important first step, which many businesses forego, is asking the questions.

A gift certificate, with no follow-up plan for retaining the client, is not worth the paper it’s printed on. Coordinated marketing campaigns cost money, sometimes in significant amounts. The reward for this investment is new client traffic. Once the clients start to arrive, a salon or spa is charged with converting them into loyal, raving fans. If this does not happen, the business would have fared much better marketing to its existing client base, which costs significantly less than new client acquisition.

A Holiday Hypothesis: How many gift certificates will your salon or spa sell this season? What will be their average value, and for which services? Generally, salons and spas will see about 75 percent of holiday gift certificates redeemed. The average number of clients retained varies greatly, and depends on many factors, including which services they experience. Clients that redeem certificates for luxury services are less likely to return, because they consider the visit a treat; it’s nice as a gift, but not something they would normally indulge themselves in.

Let’s Look At Some Numbers: Let’s say your salon sells 100 gift certificates. Of these, 75 percent are redeemed. Of those 75 clients, 35 percent come back for another visit. The business nets 26 new clients.

Sadly, those numbers are probably generous for many salons and spas. Redemption percentages fluctuate, and most salons retain closer to only 30 percent of first-time clients.

So the question is, if a salon only retains roughly 25 percent of its gift certificate customers, is it really worth the hassle and expense? Some business owners do not hesitate to say that it is. It’s important to reach as many clients as possible. Others feel the funds invested in concept, design, production, mailing, paperwork and tracking are better spent elsewhere. Both points are valid. Either way, the trick is turning clients that you pay for via marketing expenses into paying clients via referrals and a greater share of their personal business.

If you play your cards right, each generation of first-time clients will produce another, as they refer and purchase gifts for friends and acquaintances.

Neil Ducoff, founder of Strategies and author of the upcoming book “No-Compromise Leadership,” developed the team-based pay concept more than 30 years ago and developed a company that trains and coaches to ensure businesses implement the program successfully. For more information, visit www.strategies.com.