Survey Says: “Recession”
NCA’s online survey gives us some insight into the perceptions of industry professionals on a variety of topical issues. We’ve asked about everything from diversion, tip rates, taxes and more general topics such as presidential politics, consumer trends - and most recently the economy.
With gas and food prices creeping up fast, we thought we’d check in with salon owners and professionals to get their take on the latest economic headlines. Here’s the most recent tally of survey results:
Based on the latest headlines, the country is either in a mild recession or perhaps more. From the point of view of your business, what’s your take on the economy?
- We are in what feels like a mild recession - 58%
- We are in what feels like a full blown recession - 29%
- We are not feeling the impact of what may or may not be a recession - 13%.
What is your take on spending on services?
- We are experiencing lower spending on services - 74%
- We are NOT experiencing lower spending on services - 26%
What is your take on tips?
- We are experiencing a reduction in tips - 69%
- We are NOT experiencing a reduction in tips - 31%
What is your take on retail sales?
- We are experiencing lower retail sales - 81%
- We are NOT experiencing lower retail sales - 19%
Only 13% saying they believe we are NOT in either a mild or full blown recession - and the majority by far are experiencing a reduction in service sales, tips, and retail sales (81% saying that salon retail is DOWN!).
What are your thoughts on the current economy and its impact on salons? As importantly, how are you coping with the situation and what advice do you have for others working hard to make the most of a challenging situation?
To take NCA’s online poll about the economy, visit www.ncacares.org and look in the bottom right hand part of the screen. To comment on this posting, click on the “comments” link below. If there is no comments link below, click here and then click on the comments link that will be below this paragraph.
May 31st, 2008 at 7:28 am
I HAVE BEEN IN THIS FIELD FOR 21 YEARS & THIS IS THE WORST SITUATION I HAVE DEALT WITH HURTING OUR PROFESSION. I HAVE TOLD CURRENT CLIENTS THEY WOULD GET A DISCOUNT IF THEY SEND ME NEW A NEW CLIENT, AND THAT NEW CLIENT GETS A DISCOUNT. FOR MY SUPER LONG TERMED CLIENTS, I HAVE DISCOUNTED THEIR PRICES AS MUCH AS $10 OFF. I HAVE ALSO GIVEN AWAY SIMPLE SERVICES IF CLIENTS ARE GETTING A CHEMICAL SERVICE, FOR EXAMPLE–FREE EYE/LIP WAX OR FREE PARAFFIN WAX TREATMENT. I HAVE SEEN A SMALL INCREASE IN BUSINESS AND TIPS.I THINK SOMETIMES WE HAVE TO GIVE SOMETHING AWAY TO RECIEVE SOMETHING IN RETURN. WE ALL ARE HURTING IN SOME WAY, IT’S ONLY BEST WE ALL HELP EACH OTHER, STYLIST & CLIRNTS. BE WELL,MICHAEL FEDELE,TAMPA BAY AREA
May 31st, 2008 at 8:46 am
The readers have spoken. Call it want you want, sales are down. And it looks like retail sales are really down. You have two choices.
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.
May 31st, 2008 at 10:15 pm
So Many interesing comments on this subject! Diversion is an ongoing problem…can we stop it? Probably not. Can we out-smart it? maybe!
After all we are creative people, right??It’s really all a matter of PRESPECTIVE!
We all read the headlines about the bad economy and dirty politics but what if we simply didn’t pay attention? What if we chose to ignore what the media would says and simply CHOOSE TO BEPOSITIVE ANYWAY?
Choice… What a concept. Sales may be down but if you focus on the negative, it, will just get worse.
Look at WHAT is WORKING in your business and FOCUS on THAT.What makes you stand out from you competition?
*Never* discount-ALWAYS ADD VALUE!
Would you rather give a 15% discount on a $100 service OR give them a “gift” of a “complementary product” (costing you about $6) with a full price service? What will they remember..? Treat your clients well and let them forget that there is a “recession”…at least while they are in your salon!
Remember, WHAT YOU FOCUS ON EXPANDS.
Try getting rid of the gossip mags, turning off the news ang go out and do what we do best!!!
SERVICE..What a concept!
June 3rd, 2008 at 9:36 am
Wendy,you and I think alike! NEVER EVER DISCOUNT! ALWAYS add value - even if it is something as simple as adding a neck and scalp massage to your time at the shampoo bowl. Have someone who is not busy? Why not ask them to be a team player and offer a complimentary hand massage to the service while the other (paid for) service is going on. Its these kind of things that makes the experience in your salon stand out above the competition. Love the complimentary gift idea - and depending on what product you carry, it can cost be very low cost while still being seen as a bonus. Best of all is the reminder that amazing service is what makes you different. Dont lower your prices, don’t discount anything - just be really great at everything you do.
June 4th, 2008 at 6:06 pm
Hi Keith. Nice to know that there are others out there with a positive attitude!
Unfortuantely in many areas booth rental has become the “norm”. While it can seem like a great idea to “be your own boss” it untimately ends up taking away from the salon as a whole! The “service” piece almost always suffers.
You can only offer “real” service when you have a team to support you. No one can do it all.
Working as a team allows booked stylists to handle more clients effectivly with the help of the newer staff. When the client’s regular stylist can’t accomodate them, who will they ask for? -the stylist that they met last time.
If the clients aren’t happy ( read,”feel special”), they leave.
If the staff isn’t happy (read busy) , they leave- and take their clients with them.
If you find a way to get everyone -clients and staff- on the same page you salon will stand out from your competition and be “Recession-proof”
because everyone’s needs are being met!
Even in a “down” economy we are valuable to our clients if they know that when they visit us, they will always feel great and special when they leave!
June 6th, 2008 at 8:24 pm
Recession is an economic status that should never effect how you serve clients from the heart.Comm-unity is what happens when we serve.You can never put a price on the affect of genuine caring for others at such a time as this.This economy is barely getting started to do a major collapse.When clients disappear it is probably because they are in the midst of their own personal collapse.Don’t take them leaving you personal.Just pray for them.
June 17th, 2008 at 4:43 pm
Would you say this is a risky time to open a new salon?
Do you think things are going to get worse before they get better?
I am trying to decide if I should just ride all this out or go ahead with my plans to open a new salon. When the economy and business isn’t at it’s best it does drop prices for leases.
Any advice will be greatly appreciated. Thank you!
July 6th, 2008 at 5:23 pm
Dawn, it’s always a risky time to open a new salon. It’s not an easy business to succeed in and most seem to barely survive. You need a great plan and team to make it work. Also a big bank account to survive any tough times you may run into - with or without the recession.
July 6th, 2008 at 5:23 pm
Dawn, it’s always a risky time to open a new salon. It’s not an easy business to succeed in and most seem to barely survive. You need a great plan and team to make it work. Also a big bank account to survive any tough times you may run into - with or without the recession.
August 23rd, 2008 at 5:55 am
The economy is not an excuse…
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.