Keeping Clients vs Attracting Clients

"Business is like a bath, you need to put in the plug before you turn the taps on"


All too often I come across salons who are trying to look for new clients as the answer to keeping their businesses going.

It's true that you need a constant stream of new clients into a salon, depending on your current productivity or available bookings and current level of client retention we recommend at least 25% of your clients should be new.

However, it's your regular clients that form the basis of your business and make you the money so make sure your standards of service are high and that each client wants to return again and again.

But how do you "make sure your standards of service are high"?

It starts with deciding what you want your standards to be and defining them in detail. Then its about getting the basics right and ensuring you consistently deliver the same standards.

Its also about how well your team can build rapport with clients, how well they listen to the clients needs, ask great questions during the consultation and how knowledgeable they are about the service, products and details about the client and their buying habits.

Then it's the little touches that make the experience special, but these will only work if they are overlaid on the foundations of quality service.

This is what the saying "attention to detail" means in reality and that's what we help salons achieve.

Lay the foundations for great service and visit us at http://www.nexusrevolution.co.uk

{EAV:d39a0612f8e1a5d0}


Ryan Fox

Know any Senior staff with bad attitudes?

Presenting a bad attitude may be good if you are Lady Gaga, in fact it can enhance your reputation andfollowing if you are talented and famous. However only thinking that the world revolves around you in a salon is not good for team spirit and for the Salon as a whole.


Who runs your staff room? There is sometimes an unofficial leader who is often a senior stylist who may be well established. They may say yes to your face but take every opportunity to undermine you when your back is turned. When you try and introduce new things they often try their hardest to undo the good work you have done.


These characters live on their past reputation and salon experience but often do not want to progress. They will negotiate the best deal for them and then sit on it, not contributing or offering anything back in return. They will only do their set hours and use attack as their best defence if you question anything.


They will talk a good game and appear as everyone's friend in public as life is a show, but do they actually get much done. Quite often they appear busy but when you look at their figures they are not that effective.


When you take everything into account such as paying them a high basic, low productivity, me me me attitude, undoing your good work and their unwillingness to progress you have to question if you should keep them in the job.


If you have tried so many times it's driving you mad, sometimes you have to stand tough and let them go for the good of everyone.


Introducing a Performance Management System is a good way to develop an open environment where team member loyalty, performance and great customer care are all rewarded in a fair way. It gives a true picture of what's going on and stops Stylists being able to hide behind their old reputation.


It lets people know where they stand, what the boundaries are and what they have to do to get on. You will find that good stylists will thrive and bad ones will move on.


For more information about how we help salons introduce a Performance Management System visit http://www.nexusrevolution.co.uk

Is your salon setup to make a Million?

One of the salon business tools Nexus Revolution use to take the guess work out of your salon's potential to profit is our Salon Calculator.

The Salon Calculator works out:

1. How many active clients you need on your database to produce your desired income.
2. How many of these need to visit each hour for your team's column productivity
3. How many Full/Part Time team members you need to service these clients based on your opening hours
4. What your return on income is after basic wages for your length of trading hours

Take a look at the results of this sample case study; to see what the salon would need to do to make a £1,000,000 turnover.

Salon 1 – Has 10 cutting stations. Opens 5 days, for 8 hours a day. 60 minute appointment times are allocated to deliver a £45 cut and finish. The team average being booked out 80% of their available time. (This means there is 96 minutes unallocated in each column to schedule rest breaks throughout the day without reducing productivity further.)  On average the active clients in the salon database return every 8 and 2/3 weeks, which is 6 visits a year (52 weeks ÷ 8.67 weeks between visits = 6 visits a year). Full Time team members are employed 8 hours a day, 5 days a week for 46.4 weeks a year to allow for 5.6 weeks paid annual leave. The average pay rate for the members doing the £45 cut and finish is £8.00 per hour.

1. To turnover £1,000,000 based on £45 cuts across an active clientele returning an average 6 times a year, the salon would need at least 3704 clients such as these.
2. However at £45 for every 60 minute appointment slot the salon would need to see 14 clients in salon per hour. Unfortunately this salon only has 10 cutting stations. (Even if the team worked at 100% productivity the whole year, the salon would still need to see 11 clients each hour!) 10 stations limit the salon to £748,000pa based on this most performed service at the current price, duration and total trading hours.

So what is the best thing to do assuming the salon itself can’t be made to fit the 4 additional stations required?

OPTION A – Increase service price?
OPTION B – Decrease service time?
OPTION C – Increase trading hours?

If the salon changed nothing and reached its current revenue ceiling of £748,800 it would need to employ at least 10 Full Time and 1 & 1/8th Part Time qualified members costing £166,400 in basic wages before bonuses. Income after wages will not exceed £582,400.


Option B – Decrease service time in this example returned the most income but must be weighed against the extra pressure on staff to run to time without reducing the quality or service experience of the client.

Reducing service times is not always an option. Had the service most performed be a 45 minute massage service that occupies a treatment room with a 60 minute appointment slot, we cannot expect to service more than 1 client per hour in this work space. In which case Option A – Increase prices should be considered before opening longer and significantly increase your wage bill.

Whilst on the topic on service times, it is worth noting that increasing the popularity of profitably priced 30 minute services will have the effect of halving the number of team members required. For example in the above example, £45 cuts completed in 30 minutes, would require only 4 Full Time and 3/8ths Part Time qualified members (that is a casual employed 3 hours for every 8 hours trading) grossing £1,048,320 at a basic wage cost of £66,560 to return £981,760 after wages.

A Nexus Revolution Salon Setup Benchmark Review would also input your other cost centers of Rent, Stock, Operations, Marketing etc to forecast your profit potential. Follow the link below to arrange a no obligation consultation.

© 2011 Wayne Kranz & Nexus Revolution Trust http://www.nexusrevolution.co.uk

The training balance - Outstanding business vs. outstanding services

In an industry known for cutting edge fashion, glamour and beauty there's no question of the importance of focusing on technical training and development to ensure the standards and skills of our beauty therapists, nail techs, stylists and colourists.

Investment in recognised NVQ qualifications and advanced apprenticeships are a must for hair and beauty career makers and landing a position in a salon or spa where attention to constant education and updating of skills, should be high on a budding professionals' agenda.

For salon owners, training is a considerable cost in both time and money, especially when combined with preparing members of the team to enter industry awards and competitions. Let's not forget also, the outlay in fitting out the salon in the first place to provide a creative space, both fun to work in and pleasurable to experience as a client.

Without doubt, the high profile of the industry can only be maintained by excellence in training. It's the reason our industry exists. People are attracted to salons and spas because the core trade skills practiced there provide clients with service results they can't otherwise receive, just as hair and beauty professionals are attracted to the industry because of the rewards achievable that interest them.

The reward for owning a salon business is that you can profit from it, - although I do come across a lot of owners running not for profit operations albeit unintentionally, as they personally subsidise haircuts and beauty treatments to their local community with their own sweat and tears!

Business owners need to be equally mindful, that supporting your team with education and great workplaces that engage in plenty of opportunities for industry recognition, is only addressing essentially what is the by-product of the business. Providing outstanding services, i.e. Great hair, fantastic nails, stunning tans, excellent treatments etc., is simply the result of having applied the training and skills. It's their trade; it's what professionals do in exchange for pay.

If we were in a different trade the by-product of our applied training and skills results in what that trade does. Mechanics - well running motors, Farriers - properly shod steads, Bakers - lovely buns.

How good they are at their trade is only half the story whether the by-product of their labours will result in an outstanding business and yet when it comes to placing an equal focus on training and skills to run the business itself, I see many salon owners neglect investment in this vital area. It's focus in this area that determines the business' profitable success.

Nexus Revolution salon management and consulting at http://www.nexusrevolution.co.uk exists as a resource to salon owners to fulfil this training and education requirement, by supporting salon teams with the foundational skills and tools necessary to run all parts of a salon operation in easy to implement, accountable steps.


By Wayne Kranz

First Impressions Count

When was the last time you looked at the front of your salon?

You may walk through the door everyday but when was the last time you really looked at your salon from outside, which is after all what all clients see whether new or regular.

Check the following to see if it’s still up to scratch:

• signage


• paintwork


• pricelist


• front door, door furniture, door mat


• plants


• window display


• glass


• imagery

Make it a regular task to check it's in tip top condition to ensure you are keeping up appearances!

To ensure all those attention to detail things that clients really notice get done check out http://www.nexusrevolution.co.uk 

by Ryan Fox

Considerations before you print your next run of gift vouchers

Following 30 March 2011 post on costs gift certificate setup could have on your salon, I was asked what should be included on the actual voucher to work with the system.

I’d personally look to incorporate a card reader to offer a salon branded card that will update both loyalty club and gift voucher credits each time it is used. Regardless of whether you adopt such technology used in many big brand stores or choose vouchers on paper media, you should still communicate your terms and conditions for their use both at the time of sale and before you finalise the bill for the person who redeems them.

What to consider including in your voucher design:

1.    Room for an expiry date?

Retailers are allowed to impose expiry dates on vouchers if they follow certain rules their legal advisors can help with as covered in;

• The Sale of Goods Act 1979


• Supply of Goods and Services Act 1982


• The Unfair Contract Terms Act 1977


• The Unfair Terms in Consumer Contracts regulations 1999

You need to decide if imposing an expiry date to use a gift certificate strikes the right relationship balance between the salon and its clients? (It may not be popular for clients however, unredeemed vouchers remain a liability to business, so consider a 12 – 36 month time limit.)

Ensure your salon team know the rules at point of sale

Formerly the Consumers Association, says the contract with the consumer would be undermined if the retailer failed to spell out the expiry rules at point of sale.

The retailer must tell the customer what conditions apply to the vouchers and be prepared to answer questions about them. It is not good enough to simply include terms and conditions in the small print with the voucher.

Clients seeking to defend their consumer rights would need to show expiry was not a term included in the contract at the point of sale. If you ask yourself 'was there a time limit pointed out at the point of sale?' and the answer is 'no' then you have a reasonable argument to say the rules have been breached.

2.    Room for a tracking number?

Good salon Point Of Sale software systems generate a tracking number or allow you to record one for each gift certificate you sell if you order them with pre-printed sequential codes, so you know both who you sold it to and who used the voucher towards products and services when redeemed. This allows you to know the business liability at any point, in outstanding credit from the sale of these vouchers. If you don’t computerise your salon records it’s an important practise to keep a book for this purpose.

3.    Pre-printed face values or blank?

Many salons reproduce their own version of salon currency and pre-print a range of denominational values, like bank notes of 5, 10, 20, 50 or similar. These may look more professional than the alternative of handwriting the actual gift amount on a single blank cheque style voucher, but pre-printed vouchers raise many more issues to overcome;

• You need to design, purchase and stock many more than with the blank cheque style, even if you only choose to offer a single value, say £25, all gift purchases greater than this require additional slips which take time to process at reception when given and received.


• You need to track a voucher number for each denomination purchased. This opens up more opportunities for human error to occur, when writing, inserting or even scanning in your voucher codes.


• You need a policy for unused balances. With blank cheques you can reissue any credit left on vouchers by copying the tracking number and amount of change to a new slip, but with pre-printed face values you are obligated to either inform both when selling to the purchaser and before billing the redeemer that vouchers are not exchangeable for cash. i.e. The voucher can only be used towards purchases of equal or higher face value as no cash is given for unused balances. If you can give change (without leaving an unused outstanding amount against a tracked voucher) you are actually refunding a previous purchase against a later days takings.

Set up & salon training available

We offer training for setup of gift certification on your system and how team members are to sell and process redemptions at point of sale.

Online Discount Vouchers - Does the deal stack up?

Groupon, the oneline discount voucher company, was recently described as "the fastest growing company of all time" by Forbes Magazine. Is it any wonder then that Salon Owners ask me should I do an online discount voucher campaign such as those offered by Groupon or Mycitydeal for their Hair or Beauty salon or Spa?

There is no doubt these deals have their place, but there are a number of issues you should consider as a Salon Owner.

Does the deal stack up?

What I mean by this is a 70% discount might be good for the client but it might actually cost you money to perform the service, especially once you have paid the commission to the voucher company.

What type of clients will it attract?

Clients that typically go for these deals tend to shop around and are not loyal. Are they the sort of clients you want?

Can you handle it?

Often the terms of the voucher company want you to offer a large number of deals. Do you have enough capacity to offer it? How will you pay your team? Will you sacrifice full paying clients for those on a deal or worse prevent your regular clients rebook for their regular appointments?

So how do I know what the pitfalls are?

I have crunched the numbers for a few campaigns to see if they were viable for a Salon business. Like any promotion, you can make it work if you are clever and quite restrictive about the offers and you are careful and do it on a small scale in order to only fill your quite slots.

I also sent in one of our Mystery Shoppers on a Groupon Deal at a branch of a medium sized southern based salon chain to see what the experience was like through the client’s eyes.

These were the results:

• The Mystery Shopper called the local branch to make an appointment but was referred to a central booking system.


• The salon chain must have been swamped as it took a week to get back to them to make the appointment.


• The only suitable appointment was on a bank holiday, but was made.


• On the day there was only one stylist in the salon who complained throughout that they were having to work a bank holiday, do a full day of voucher clients and would be working for almost nothing as they were only paid commission on the discounted price.


• The stylist also said they were going to be leaving the salon as they were fed up with how they were being treated.

Question: Would the client go back? Would you?

The point of doing a heavily discounted promotion is to fill the columns of quite team members on quite days at quite times, because it would be better off to give a service away to at least have a them work on someone for the time you pay the team member to be in salon. Sadly this point was missed in this promotion.

So what can you do to ensure that your promotions work for you?

Nexus Revolution offer a Professional Pricing Service that enables you to identify how much profit you make on every service performed. We use this to enable the setting up your entire seasonal plan of profitible promotions over the whole year so your cleverly designed campaigns even lock in profits.

~ Ryan Fox - Nexus Revolution UK BDM

To find out more about this service follow this link http://tinyurl.com/3xmdzuz

Your gift certificates set-up could actually cost your business.

Let me counts the ways...

When I look behind the scenes at how salon computers are set to allow customers to buy and redeem gift certificates, I come across all kinds of issues that can hurt the bottom line when offering this otherwise powerful service offering.

1)       The first consideration is; do you option 1, - pay sales tax on the date of sale of the gift certificate or option 2, – pay sales tax on the date of redemption against an actual service or product?

Surprisingly a remarkably high percentage of gift certificates purchased are not redeemed and even then, not always for the entire amount purchased. Therefore why pay tax before you know exactly what your tax obligation for providing a service or product sale will be, if at all, should the practice of paying tax on the date of redemption be allowed in your jurisdiction?

2)       The second consideration is; if you do use option 1. The sale is recorded as business income on the date of purchase and so on the later date when the certificate is used it is then recorded as a discount to the value redeemed. So has an effect on your performance reports. It shows higher takings than work done at the time of sale, then lower taking than work done at the time of redemption!

This means your average bill looks worse than it should be at a later reporting period and depending on the way you pay commission, could mean different or new members of your team are paid to be busy on clients who will now be recorded as a 100% discount at the time of redemption.

Using option 2. The sale is actually recorded as sundry income, which means you still bank it as takings but it is kept as deposit against future redemption. This means your takings are still higher at the time the gift certificate was sold, but who not only wait to pay the sales tax until it is redeemed against an actual service or produce item, at the time of redemption there is no need to record a discount as the redeemed amount is simply subtracted from the balance, like an account that was in credit.

This means your average bill and team performance is not affected any lower than the actual service and retail sales completed on the day.

3)       Which leads to the third consideration; do you track both the sale and redemption accurately? Once a gift certificate is sold, then whilst ever the terms of redemption remain valid, the value of the certificate stands as a future liability to the business. In both options we bank the money up front, but we still have an obligation to honour the sale at a future date. Unless we accurately subtract the value of redeemed purchases when the gift certificates are used, the liability remains recorded against the business balance sheet, which can really be an issue for future investors, lenders and buyers as each outstanding certificate has the possibility of being called upon after their financial involvement, so you need to be sure which of these promissory transactions are still active against valid gift certificates which might be produced at reception any moment.

4)       The final cost consideration is; how do you issue your gift certificates? Printed certificates will always have printing costs, but pre-valued certificates, where produced at nominal face valued of say 5, 10, 20, 50 and so on, even more so. Not only because they often require multiple slips to make up the required value of the gift, but also, depending on the salon policy, because of the difficulty to reissue the bearer with any unused balance, against the original tracking number. A more cost effective method would be to write the exact value and corresponding tracking number on non-disclosed valued gift certificates. More professional still is to invest in the ability to provide your clients with there on loyalty gift cards which can work with your barcode scanner each time you wish to credit or debit the value left on your own salon branded durable card. 

©  Wayne Kranz 2011

Selling and buying a business for optimum benefit

You may only dispose of a business once, so make sure you get advice from people who know how and when to prepare and how to optimise the price whilst minimising the hassle.

For many salon owners, the idea for starting their business was to make a difference. Not just a difference in the eyes of clients and peers, but also a difference to their own financial well-being. Whether your salon is based on generating an income or for building growth, there will come a time when disposing of the business is the right thing to do.

This topic shows you how to improve the value of your business and make it an attractive proposition to potential buyers. You will be shown when you should build an exit or succession strategy into your business plans and identify what buyers are looking for.

You will be provided with experienced insights from the role of finance director, corporate finance adviser, tax specialist and corporate lawyer. Our intention is to help you optimise your business potential fro when the time is right to move on to new challenges.Selling and buying a business for optimum benefit


The seminar is FREE to attend and you are very welcome to bring a guest or a colleague.

To attend next event please contact us ASAP. Places are limited so please book early to avoid disappointment.

http://www.nexusrevolution.co.uk/Salon-Services---Products/Financial-Knowledge.aspx