Remember when a Motorola brick cost half a year's salary and you got a workout just lifting it up to your ear?

Yep, hard to believe, considering you can now pick up a TV that’s twice the size, ten times the clarity and half the weight for what amounts to chump change…a few hundred dollars.

What happened with the TV market is the same as happens with almost all products and services…sooner, rather than later, they become little more than a mere

commodity

Prices – and margins – fall through the floor. Readers older than 40 will remember when those early Motorola brick phones cost six months salary. Today you can buy a faster, better, smaller and smarter mobile phone for a hundred bucks.

Every business faces this same inexorable slide into commoditization.

And the more the business relies on the blunt instrument of price to compete, the faster the process of aging. Before you know it, you’re rotting away faster than Brad Pitt in Benjamin Button. It’s a cancer.

And it affects the hair & beauty industry as much as any other.

Yes, it’s true that at least in the foreseeable future, a haircut or a facial is not going to be something you can buy online at Amazon. People will always need hair & beauty treatments in person. Even Bill Gates hasn’t worked out how to administer a brazilian over the internet.

But that doesn’t mean you’re immune. By and large, as far as the general public is concerned, one hair salon is pretty much the same as the next. A facial is a facial is a facial.

So how can you tell when you’ve become a commodity? The warning signs are obvious, if more than a little frustrating, frightening and perplexing.

When phone inquiries start with “what’s the price of a X?”…

When your clients complain about the price.

When you phone a regular client you haven’t seen for three months, only to be told “Oh, I couldn’t get an appointment with you last time so I went to that place around the corner, and I kind of just kept going there….”

That’s when you know you and your salon have become a commodity. Invisible, interchangeable.

Now, before you rush off for a health check, there ARE ways to turn a sow’s ear into a silk purse. Here are three:

1) you can innovate. A new product/service, even a slightly up-graded one, can give you an edge over the competition.

2) you can bundle, or package. Garden variety service like a hair cut, juiced up with add-ons and/or ancillary services that increased perceived value.

3) you can slice and dice your client list and/or target market so that you can more carefully and precisely match your product/service offer or package with the buying preferences of that particular niche market.
(Any and all of which, of course, require a carefully crafted salon marketing message to support them)

Even that may not be enough to halt the slide. So what else can you do? Here’s where it gets trickier…and requires more brass balls.

a) you can put your prices UP. A lot. Proudly, with your head held high. And no, there is absolutely no value in telling your customers your prices are going up soon. Just put them up. One of two will raise an eyebrow. The rest will simply fall into line.

b) Choose which customers you want to do business with, and those you do not. And fire them. Nothing creates and fosters demand for your services like the perception of scarcity, of unavailability. You may lose a few customers. But those who remain will be more profitable.

c) pay bonuses based on profit margin, not merely turnover. Nothing focuses an employee like “Sure, go ahead and spend money on new chairs, after all, some of it’s your money…”

Sound all to complicated for you? Go on then, hang out the discount sign, sit by the silent phone, and sulk as the life is inevitably sucked out of your business. ‘Cos it WILL happen if you do nothing.

Anyway, for obvious reasons I won’t name her, but here’s the line that made me gasp…

“I am thinking about putting my prices down to match all the other salons in my area – do you think that is a good idea?”

Putting Your Prices Down Will Hit You Where It Hurts The Most - Your Pocket!

I answered her within 0.000003 of a second with… “NO WAY!!! If anything, you should put your prices up, NEVER put them down!”

Needless to say I think my message was heard loud and clear, and she will not be putting her prices down…she was obviously just having a blonde moment….which we all have from time to time!

As salon owners we have to remember that most people don’t really shop on price, but on the value and service that we give them – Most salon owners outside the program don’t really get this and that’s why we see so many salons discounting.  If you keep your customers focused on price then they are going to shop on price.  That is one of the reasons why we teach you to never discount, and add value instead.  And of course discounting or putting your prices down is going to hit YOUR bottom line – NOT GOOD!

I find it amazing that people will takes months if not years to make a decision to put their prices up, but will put them down in the blink of an eyelid.  The fact is most people in the hair and beauty industry in New Zealand by far under value what they do and sometimes I can’t believe it when I hear how much people are under-charging for services…

Profit is NOT a dirty word you know!

If this particular salon owner had put her prices down then what would make her different from all the other salons in her area? And by putting her prices down it’s just like saying ‘I don’t really believe what we offer is anything different or better from the salon down the road, so let’s just copy them.’ 

Further still, all those clients that she has trained to her current pricing structure and way of offering value add packages would instantly be paying less – but I’m sure they wouldn’t be complaining!

It’s simply human nature to believe that the person/business that charges more for their service, must be better at what they do.

But I am not writing this article to pick on this particular person, but just to make sure that if you have been considering dropping your prices, then don’t…but I challenge you to put them up!

If you would like to learn the techniques that will have your customers spending more with you, more often and not giving two hoots about what the price is, then you need to be a Member of the Inner Circle program, complete with your own edition of the Essential Salon Owner’s Marketing Toolkit®. Go here to see if you qualify for a 30 Day Money Back Guaranteed Test Drive of the entire system – completely risk free.)

The quote above from Abraham Lincoln came to me this week as I turned 54, an age by which – ten years ago – I would like to have been ‘retired’, whatever that means. Now, to my surprise, I’m finding it is the most productive and enjoyable time of my life.

I started this business when I was 49, an age at which most people are winding down, not gearing up. Ray Kroc would not have been surprised. He started McDonalds when he was 52, suffering diabetes, missing a gall bladder and most of his thyroid gland, but was “convinced the best was ahead of me”. Kroc spent the next 30 years building the company into a global phenomenon. Victor Kiam was in his late fifties when he famously ‘bought the company’ – Remington Products – in 1979. If you’re of a certain age (like me) you’ll remember his TV ads where he declared boldly ‘it shaves as close as a blade, or your money back!”

The point is this: energy and enthusiasm comes from actually doing things. Age has nothing to do with it.

Last week I reached a personal milestone. To you, fishing may well be nothing more than a jerk on one end, waiting for a jerk on the other.

But it has been my recreation for more than 30 years, though I had never reached the sportfisherman’s holy grail. Yet on a flat-calm sea aboard my friend John Davidson’s game fishing boat Incognito, nearly 40 nautical miles out to sea, I hooked my first marlin. Well may you yawn, but to me this was akin to a golfer achieving a hole-in-one after 30 years playing that infuriating game. It took 40 exhausting minutes to bring the great fish to the boat, at which point it shook its massive head, snapped the leader and swam away.

Which was fine by me, we were about to cut it loose anyway.

Two weeks from now I reach another milestone, when Michelle makes an honest man of me. It will be my third marraige. A couple of friends have asked why, at my age, I’m bothering to get married at all. I joke that it’s because I haven’t gotten married for more than 25 years, but that’s being deliberately glib.

As I see it, it’s simple. Age has nothing to do with anything. It has everything to do with commitment. When you commit to something – just about anything – you create for yourself a platform for success. Nothing worthwhile can be achieved without commitment. With it, you can achieve almost anything. Life itself becomes more fulfilling.

That’s why I continue to push the barriers, chase goals, seek adventure. Couple of weeks after we get married, I’m borrowing my brother’s 55ft boat and heading off to the Abrolhos Islands for a week of fishing with Michelle and three other couples. Not for me the sedentary cruise ship.

I would rather take risks, literally drive my own boat, than be a passenger…waiting for other people to make decisions and simply, passively reacting to them.

It is, I suppose, why I am at heart a marketer and entrepreneur. Entrepreneurship is a lonely place to be. Risky, sometimes dangerous, rarely secure. But to my mind it is better to take risks than to take the safe way, risk nothing.

Nobody who has never risked anything has ever achieved much either. And it’s a funny thing, the older I get, the more risks I like to take. What, after all, do I have to lose?

Let’s get on with this week’s offerings….

How to ‘eavesdrop’ on what’s working for other salon & spa owners…

One of the hardest things for any salon or spa owner is working in a vacuum. In America, there are more than 300,000 salons & spas, large and small. In Australia and New Zealand, more than 35,000, in the UK, at least 60,000.

And for almost every salon & spa, is an owner who goes to work every day and tries to re-invent the wheel. The beauty ‘industry’ is a multi-billion dollar beast, but its arms and legs are all moving in different directions. There might be 50 salons, clinics, spas within a few miles of each other, but the owners all turn up at work having no idea what’s working for the others.

Sad thing is, there’s no real need to re-invent the wheel, because somewhere in the world another salon or spa owner has already faced, challenged and found answers to exactly the questions you’re asking yourself right this second. Wouldn’t it be wonderful if you could ‘pick the brains’ of somebody who’s already been there, done that?

That’s exactly what’s happening every month among our Inner Circle members. Just this week we had dozens of Member salons join our monthly international Group Coaching Call to ask…and get answers…to questions like:

“What’s the quickest way to capture new clients?” from Judy Swain at Glam Spa in Connecticut.

“What’s the best way to retain new clients for re-bookings?” from Amanda Anderson of Contours Clinic in Melbourne, Victoria. And from Chantal Witkowski of E’clips Hair and Beauty in Woodend, Victoria, “”I have two of my full time stylists both leaving to have babies within 1 month of each other in July/August. What is the best way for me to do this without losing clients? All future female employees will be fitted with chastity belts to prevent this from happening again!!!”

If you’re not an Inner Circle member, here’s a small taste of how these Group Coaching Calls work:

Press play….

(NOTE TO INNER CIRCLE MEMBERS: The full one-hour Group Coaching call recording is available in the Member’s Only area under the top menu, ‘Group Coaching Calls’)

Of course, the Group Coaching calls are just a small part of the whole Inner Circle program….find out if you qualify by completing the no-obligation survey here.

The Price Cringe: How a single tiny change can instantly increase your sales in the salon…

I’ve often bemoaned the fact that most business owners – salon & spas particularly – would be more successful if only they’d get out of their own way, and let the customers buy from them.

The biggest mindset barrier here is around the issue of price. People in the beauty industry seem by nature to be ‘caring’ kinds of people. And that generates what I call the Price Cringe where the owner says unconsciously if not overtly

“I can’t raise my prices because my customers can’t afford it/won’t pay/I already raised prices once this decade…” or any combination of these.

It is death to play God and assume what your customers can and cannot afford, will and will not pay. I have banged on about this for years, and it seems to be one of the most diffucult concepts to get across.

So here is a proven strategy that will increase your gross sales instantly, without changing any prices at all, if that fear is too big for you to surmount.

Offer the Most Expensive Services First!

Most business owners start with the default position of assuming that customers always shop on price first. And so, bowing to the cringe factor, they offer the cheapest thing first, slowly working up to the most expensive on the list, all the while looking sideways to watch for the flinch.

Take a browse through the car ads in the newspaper and you’ll see exactly the same thinking, in print. Mistakenly in my view, the car dealers to a man put their cheapest cars at the top of the ad (the most important section of any ad) and all the expensive ones right down the bottom of the page… last to be read, if at all.

But study after investigation after focus group has shown that price is only the major issue when that is the only proposition put forward as the basis for the sale or offer.

However, even if price is the leading edge of your offer, you can instantly increase your sales by offering the most expensive items first, the cheapest last. And it costs you NOTHING to try this.

Years ago, when Jill and I began selling what was then just the Essential Salon Owner’s Marketing Toolkit, we sold two versions – a Bronze version (just the kit itself, no frills or add-ons) and a Silver version, which came with coaching and a few other bonuses. The Silver toolkit was twice the price of the Bronze version.

We would pitch the Bronze kit first, and typically the Bronze version outsold the Silver version by a factor of two to one. Then, at a marketing seminar in Dallas, I asked Bill Glazer about this.

“Pitch the deluxe version first, the basic version second,” he instantly told me. That single piece of advice was worth the long trip to Texas alone. In the next few months, we completely turned our sales around. Fully eighty percent of our sales were now the deluxe, upmarket version!

Here’s what to do: for the next week, whenever a new client comes into your salon or calls you to ask about services and prices, simply start at the expensive end of your price list first, instead of the cheap end. I’d be delighted to report your results.

Speaking of price…

Notice of Impending Inner Circle Membership Fee Rise.

As of Tuesday, May 19, Inner Circle fees for new members (excluding New Zealand at this stage) will rise substantially. (This will NOT affect existing Members or those salons joining prior to May 19.)

The Inner Circle first-year Membership fee of $7,932 (Australia and USA, over 12 months) has been held static for more than two years now. In the meantime, we’ve added a vast array of profit-generating products and services to the program. As of May 19, that full-year fee will rise to $9,948, an increase of just over $2,000.

What this means to you if you have not yet applied to join the program:

You have until May 19 to join the program at current price levels, and more importantly, join hundreds of entrepreneurial salon & spa owners around the world who can help you not only survive this recession, but actually prosper in it.

WARNING: we receive more than 100 applications every month, and take on only 30 new Members each month. Reason: we put enormous labor-intensive resources into each new Member. Sure, we could take on more, and I’d laugh all the way to the bank, but support would suffer, and I’d rather have 30 happy, well-looked-after new Members than a hundred justifiably-grumpy ones.

If you have not yet applied for Inner Circle membership, go and complete the no-obligation survey here.

People seem to get all excited about email marketing, as though it’s some kind of magic wand. It ain’t. Email (and the wider web, for that matter) is nothing more and nothing less than just another media to deliver your marketing message. Thus, same ‘direct response marketing 101′ rules apply to email as with any other media – newspapers, mailbox flyers, direct mail etc –

• Compelling Headline
• Great OFFER
• Guarantee
• Testimonials (social proof)
• Call to Action

But each media has its own peculiar quirks, and email is no different. It is illegal to mass-email a list of people you don’t know in the hope that a few of them might be fooled into taking action. (That’s the penis enlargement strategy). But email can be very efficient at marketing to your existing (known) customers. They already have a relationship with you.

(Having said that, while email might be efficient (cheap), it is known to be far less effective than say, direct mail, in terms of response.)

But when you do it right, it can achieve massive results. Inner Circle member Michael Curtis of Blush Urban Spa uses email extensively to market to his list of 7,000 opt-in email addresses. According to Michael,

“We sent two emails to our list, one at the beginning of last week and a follow up email a week later. In less than 24 hrs we sold – Special offer #1 ..33 x $117 = $3,861 and Special offer #2,  27 x $157=$4239…thats $8100. Not bad in 24hrs without rebooks and extra retail sales to be added. Then we sent out a reminder ‘extended offer’ email a week later. Total result, 118 sales, for a grand total of: $15,606!”

WHERE TO GET THE EMAIL TEMPLATE: Inner Circle members log into the members only ‘sealed section’ – you’ll find it in the ‘email marketing’ category. Plus, instructions on how to send out email in template form just like Michael does.