As featured on Stuff New Zealand, New Zealand’s largest news website.
The first thing most people did when Covid-19 lockdown and quarantine restrictions eased or ended was to visit their hairstylist. Regrowth and unruly hair were trimmed and tamed.
But was getting a haircut and colour the only thing salon customers missed? The important relationship and the vital role a stylist and the salon play in a customer’s wellbeing were really highlighted.
The US has nearly 1 million registered hair salons, while New Zealand, a country of 5 million, has around 12,000 hairstylists. The profession is considered a trade, but stylists and often the salon owners are also creatives, which presents the industry with a unique set of challenges as they respond to Covid-19.
These challenges are varied depending on location and region, business vulnerabilities before Covid-19, staffing levels, business experience and owner-operator roles.
What was going on before Covid-19 will be the same for salons after if they were struggling financially, were understaffed and under-resourced.
Skill Shortages
Before Covid-19 came along, there was a skill shortage – now, it’s even harder to find qualified stylists.
Salons have seen team members leaving due to the disruption of Covid-19 and lockdown. Some to change industries, some to other salons closer to home or some to change their type of employment status, like rent a chair or commission etc.
Owner burnout is also an emerging issue. Salon owners are creatives running a business – working long hours and ultimately the buck stops with them. Many are really struggling with the will to continue and are under immense pressure.
Economic Impacts of Covid-19
Financial challenges will be very present and continue for some time yet.
Some salons have used all their savings or taken out loans to pay outstanding bills. Rent was a significant issue during lockdown. Salons already have small margins – managing a loan, and a 20/30 per cent decrease in turnover, for example, will make it difficult for some salons to be profitable.
Of course, the big question remains – how will Covid-19 impact the economy in the medium- to longer-term?
If people have less money to spend, they may cut back on services and treatments, which will impact business confidence.
Creativity and Innovation to survive Covid-19
At a time like this, every industry needs to be inventive – to remain educated, energised, and creative.
For salons, the challenge will be to take advantage of opportunities when they present themselves and adapt to the changing habits and environment bought about by Covid-19 in the community.
Local regions may flourish if more people work locally, so salons could optimise this interest and market themselves to a new audience.
Salons will need skill and dedication to navigate the new economy and meet the changing needs of customers.
Three Tips for a Thriving Salon Post-Covid-19
#1: Know Your Numbers
If your turnover is down, cut back your costs comparatively. Wages and product bills will be your downfall if you don’t measure and react to what you are seeing.
If you are busy now, make sure you are putting money away. In so many cases I see salons coping week to week. Another slow period, recession or lockdown could be possible and the previous support structures may not be so readily available.
What is the % of your turnover spent on wages?
Are you measuring your product usage against services and charging correctly? So many salons don’t charge for their chemical services with a profit mindset.
Are you separating your retail spend from your salon products so you get a clear picture of the % of your income spent on products?
Have you done an in-depth analysis of your break-even figure for each service?
How are your team utilisation, sales per hour and average spend figures? These will really help you cut back where you can and make changes that could be the difference between survival and bust!
We have a Profitability Calculator for you to get this figure locked into your business. Get your copy of our 3 Steps to Designing Services That Sell and access your Profitability Calculator here…
#2: Connect With Your Customers
Now it is time to use inventive and creative ways to attract and connect with new customers and add value to your existing customers.
Encouraging people back to habits such as rebooking their next appointment, and encouraging loyalty and referrals is important.
Customers may have gotten used to colouring their own hair and giving the family a bit of a snip instead of coming to the salon.
However, they really appreciated how much they valued the salon experience when they couldn’t have it and the wider value of a visit to the salon can really be optimised in your communication and messaging.
Salons sell an experience and people are in need of a nurturing, relaxing, ‘time for me’ experience more now than ever.
Look over your Customer Experience Framework and address the whole experience. Don’t ignore the pre-making an appointment or pre-salon visit time, or post-visit phases. It is easy to focus on what happens in the salon but these other phases are crucial to leading the most valuable new customers to a sale and increasing their lifetime value.
There is so much you can do around the actual salon visit and it’s the salons that embrace this that really will survive in these uncertain and unprecedented times.
Find out more about the phases of the customer experience in THIS BLOG.
#3: Care For Your Team
Invest in team-building – look at your training systems and work habits of senior staff. Keep communication lines open and be open to considering suggestions from your team on ways of working.
Work on your values and culture so you can connect and create a work environment that is supportive of everyone’s needs.
Create opportunities for your team to thrive and grow. There is a lot to benefit from retaining stylists – for the industry, your salon, and your customers. Keep working on it, and the value will spread to your customers and ensure that your business is consistent and sustainable.
Click HERE for some tips on hiring and onboarding team members.
If you want to Increase Your Salon Revenue and Profitability
Get your copy of my 3 Steps to Designing Services That Sell
There is a Money Mindset Guide to help you create the abundance mindset you need for success, a Profitability Calculator so you can understand the numbers that affect your profits, revenue and salon success, and an Effective Customer Communication Guide so you can learn the 5Cs for consultation success.
