July was a month of non-stop travel for presentations and seminars that put me in contact with literally thousands of salon and spa owners. Without exception, I could see concern escalating among these owners over the economy. Just last Thursday, I got a call from a major distributor to set up a two-day training course to help their sales consultants effectively respond to owners that are “freaking out” over the economy. His exact words were, “My sales consultants are getting beat up - they need solutions to help owners.”

Yes, we’re getting hammered daily with bad economic news. Just this morning, the first headline I read said, “Jobless rate highest in four years.” Bad economic news and rising costs is enough to squelch any morsels of positive thinking. Being bombarded with bad business news can wear you down and get you second guessing just how well your business is doing. Before you know it, you’re concerns and fears can infect your leadership to the point where sluggish sales, every cancelled appointment or drop in pre-books is blamed on the economy.

Using the state of economy is NOT an excuse for flat sales. In every class and speech I’ve given in the past few months, I ask owners to allow the no-compromise leader inside them to emerge. Hunkering down and cutting back is like burying your head in the sand. It’s like dialing down the energy and intensity of how you play the business game.

Of course you need to be cautious, but buying into the “it’s the economy” that’s creating white space on the books is avoiding the real issue at hand. It’s your leadership thinking that needs to change and adapt to the new reality of higher costs and consumer uncertainty. Simply put, how you lead your business last year isn’t going to work today. Yesterday’s systems and spotty accountability won’t keep you competitive and profitable tomorrow.

Here’s some inspiration for you. Micki Stirsman, owner of Salon 01 in Carmel, Ind., runs a disciplined and systematized salon. In June, Salon 01’s pre-book ratio averaged 72% in her multi-million dollar location - up from their running average of 68%. Salon 01 is busy because they hold themselves accountable to their systems. The economy is not an issue at Salon 01.

Mark Luikart, owner of Mark’s Place in New Philadelphia, Ohio, is located in a low-income area that has been economically depressed for years. Last year, Mark’s Place broke $2 million in sales and is on pace for another record-breaking year in 2008. Retail sales are averaging 25%. Luikart says,
“We just work harder to create value for our customers. We don’t close our eyes to opportunities to grow - or to be our very best.”

If you’re feeling the effects of the economy, you can do something about it - but only if you shift into no-compromise mode and lead your company with confidence and some out-of-the-box thinking. This is no time to hunker down. It’s time to adapt and grow.

No compromise.

SERVICE..What a concept!

1. Keep doing what you have been doing and watch your sales drop even more. $4-per-gallon gas and big SUVs are impacting how much money are left in clients wallets.

2. Get busy and creative and start smart marketing to promote your services and to promote your retail. It begins inside with your team and then take your message outside to all your clients.

Most of your clients are what we call “under-performing.” Finding new clients is tough in any market. Building “organic growth” through smart marketing is the fastest way to turn the recession mood into a positive.

Two quick tips:

1. Create new mini- (or express) services that are shorter, faster and les expensive. Protect your margin, just do less more frequently.

2. Bundle retail into your service packages so the guest always gets some retail product that complements the service. Even if you reduce your margin on retail a little, you will create a point of difference from your competitors.

Finally, implement a loyalty initiative to REWARD your guests for their continued patronage. It pays off with higher tickets, more visits, and increased retention.