Business Tips

Determining the Salon Failure Rate

By Alicia Soulier | 

Recently I took some time to look online, and came across this blog written by Kristina called “What Are The Main Reasons Why Many Beauty Salons Fail?”.

In summary, Kristina highlighted a few core reasons why these beauty salons are failing. Some of those points are around low customer retention rates, high no-show ratios, aimless marketing, bad SEO (Search Engine Optimization), not being proactive with your marketing, and failing to use automated tools. To summarize each of her points, I’d like to take some time to share my observations.

When it comes to low customer retention rates , Kristina talks about how significantly these are more costly to salons to gain new customers than to keep old ones. She is saying that it costs a lot more to keep building new customers than it is to keep them in your business. We want to think about it as booked revenue. How do we build a forecasting projection in our salons? How do we get better at creating more consistent pre-booking so that we can secure their future revenue/create a stronger path to growth and success? Altogether customer retention is just as high as getting new customers in your door, and I think Kristina writes it beautifully.

Next, she goes into talking about a high no-show ratio . I don’t know about you, but I see this happen time and time again in many salons. Ultimately by not creating a strong customer cancellation policy, salons get hit with the unfortunate customers that don’t respect their time. In Kristina’s blog, she talks about clients missing appointments as an everyday occurrence, and too many no-shows can be devastating to your salon business. She also has GIFS and images in her material, specifically I love how she has an image that shares how important it is that you start on the right foot. Having clear guidelines of communication regarding your cancellation policies, and making sure you’re not just bringing people in the door, but you’re sustaining them as well is a crucial asset to success.

Now, let’s have a chat about aimless marketing. I particularly love this one. After many years in the salon industry, I noticed one thing: we were all coasting in the same ocean. It’s important to understand who your target customer is. Who are you trying to bring into your business? What is the persona? Does it match your brand? For example: Are you a barbershop that is attracting root touchup clients?? Take the time to understand who your ideal customer is so you can point your target market in the right direction. When this gets implemented, it is so much easier to make a plan. Whether it’s a marketing plan, an operational plan, a business plan, having a clear market of who you’re trying to attract is the most important part. When we think of opportunities, especially a brick and mortar company, how do we leverage ways other than people walking into our facilities in word-of-mouth? To grow our companies, we often think of the word marketing. We have so much opportunity for free marketing strategies such as Facebook and Instagram, which allows us to build a following customer base to get instant access to market what is currently happening in or what you want your customers to have at that time.

Reading through this blog, you’ll notice that there’s a lot of conversation around not being proactive or effective with your marketing. So as a salon, we don’t always necessarily think of the technology or how to market online. Perhaps it’s because we don’t have a strong understanding of how these things operate. Getting started is always the hardest part, try googling it and figuring out your ideal customer is. Then, how do you market to the customer, because when you can do those two things together, you’re going to be able to maximize them out of customers coming into your business. Sometimes we just throw a few dollars on a post, yet we have no way of measuring that. A quick tip is to make sure we’re not just putting dollars on a post that we are truly measuring the return on investment. Some other ways to measure a return on investment is well documented in this blog here. Insert a blog link that talks about return on investment with social media and how to measure that as a small brick and mortar business.

Lastly, Kristina talks about the failure to use automated tools, and in our world we see this happen all the time. There are tons of automated tools. That can free up some time to focus on your bigger picture. Are we spending too much time on tasks that can be automated? Are we emailing people back and reminding them of appointments? When this can be a simple text message or email automation? Salons have struggled with technology, but creating an automated solution is going to help enhance a salon’s overall outcome. It’s important to look at the day-to-day tasks in a salon, and think “can this be automated”? Another example of automated technology is color management tools like SalonScale, it helps take away these ordering and inventory management systems for salons and make them streamlined using the technology. It’s time for a massive digital transformation. It’s time to lean into technical solutions so you can be set up for success. So whether you’re just starting or you have had a salon for many years, it’s important to consider these things. We must make it better for the next generation, it’s time to change the 84% failure rate around

Alicia Soulier

Alicia Soulier is the founder and CEO of SalonScale Technology Inc. With over 16 years of experience in the beauty industry she has earned the titles of Contessa and Mirror Award winner and has proven herself as a well sought out hairstylist and educator.