OK, let me say firstly that we generally don’t recommend “discounting” as a way of promoting your salon or spa. It can pull in some extra clients in the short-term, but they are often “price-shoppers” who are looking for bargains and may be difficult to convert to long-term clients when they have to pay full price. Of course it can work as a way of building your business (there are exceptions to every rule). But, more often than not, it doesn’t.
A far, far better way to promote your business is by constructing a fantastic offer. (We show you how to construct a compelling offer on the free DVD.)
Why is this better?
For three reasons:
- Income. Lets say you offer 20% off. You do, say, 10 treatments at £50 each. That’s 10 x £50= £500. The 20% discount on those treatments adds up to £100. So you’re putting £100 less into your till. Now, with a good offer, you actually increase the treatment price, say, to £55 and you do the same number (10). Now you’ve got 10 x £55 = £550 in the till at a total extra cost of, say, £30 (for the extras you included in the offer). So, with a discount you’re losing £100, and with the offer you’re gaining an extra £20!
- Expectation. If you start discounting prices, people may put off their treatments, waiting for you to run the next discount. Whereas, with a well-constructed offer you are making more money, so you can run them as often as you like!
- Exposure to new treatments. With a great offer you can guide people towards trying treatments that they normally wouldn’t have. The result? They just might book the new treatment again!
Having said all that, if you want to do a discount offer, here’s a quick tip -
Tell them the value, not the percentage.
So, don’t say “15% off with this coupon”, instead say “£5.00 off with this coupon”
Why? Because it’s more specific, and therefore more memorable. People scan adverts and leaflets very quickly, they see thousands of them every day. If you say “15% off” it means they have to do a mental calculation to work out what that figure would mean to them - and many won’t bother! If you say “£5.00 off” it’s much easier to imagine. They can see what’s in it for them much more easily.
We’ve tested this, and found that it holds true even if the actual value (e.g. £5.00 off) is less than the percentage value (e.g. 15% off converts to more than £5.00 saving).
A word of caution -
If you do run a discount, make sure your vouchers are only redeemable against treatments valued over, say £25 - you don’t want folk cashing in their £5 vouchers on a £7 treatment! Also make sure the vouchers have an expiry date on them.
And if you’re running the offer in several places (leaflets, vouchers, a newspaper advert, etc.), make sure you put some sort of number, or other mark, on the different vouchers so that you know which client came from which source. That way, you can keep track of what results each advert/leaflet generated, against what it cost to run it.
Update: 17th July, 2008
In an interview on Hairdressers Journal Interactive, titled Beating the Credit Crunch in Your Hair Salon, Hellen Ward, managing director of the Richard Ward Hair & Metrospa in London’s Sloane Square, is asked -
“Rival salons keep discounting their services and promoting colour sales. Should I follow suit?” She replies -
“Not unless you want to cheapen and devalue your brand and your staff’s expertise.
I never agree with discounting services. This style of promotion and marketing normally attracts a transient clientele - you will probably find you’ll have to work much harder to gain their long-term custom and loyalty, as they’ll be shopping around for the cheapest deals.
Half-price sales can have the reverse effect of actually driving full-price business away. It can also be demoralising for team morale, especially if your pay structure is performance related. So go for an ‘added value’ promotion, such as receiving a complimentary conditioning treatment when a client books a colour service and reward your clients rather than penalise them.”
If you’re looking for more ideas to help your salon beat the credit crunch, read our White Paper - Getting Through the Credit Crunch, How to “Recession Proof” You Salon.
Related posts:
