By Simon Clark of Simon Clark Hairdressing, Port Elizabeth
Does Black Friday Marketing make sense for salons?
The answer when it comes to hairdressing services is NEVER! As always when considering a promotion you need to remember the three pillars of growing your business:
1: See more clients
2: Sell your clients more
3: Charge your clients more.
Now let’s look at this from a Black Friday perspective:
As Black Friday revolves around giving stupidly high discounts, I have seen salons advertising between 25-80%, clearly you will not be charging them more money! That leaves us with see more clients or sell them more. But catch with this is that the bigger your discount, the smaller your profit, so how many more clients do you need to see or how much extra do you need to sell them to make it worthwhile?
Let’s consider 3 imaginary Salons: Hot Shots, Sam's Cutters and Crimptation. We will pretend that they are all equal as it keeps the maths easy for a daily break down: (The average dockets are arbitrary and some salons will have higher margins than others. Later you will see the maths stays the same)
For Black Friday, Hotshots decides to offer 50% off, because Sam's Cutters up the road is offering 40% and Crimpation down the road is offering 25%. We will also pretend that everyone gets twice as many clients as the discount they are offering:
So which salon does the best:
The answer none of them! In fact all salons show a decline in profit. You could argue that I have not adjusted the fixed costs down to allow for the increased traffic. I chose to leave them the same as while you will save in some areas you will loose in others. It is important to note that each hairdresser will take a pay cut equal to the discount given, please tell me how seeing twice the number of clients to earn the same salary makes sense? And just in case you think your high margin salon will not be affected here is a table with some more realistic uptake numbers.
So it does not matter which way you cut it. Discounting hairdressing services for Black Friday is bad for business! This is a discussion, that as hairdressers, we should keep having. That we need to keep having this discussion on an ongoing basis astounds me. The maths clearly shows that you would have made more money if you did nothing!
It is only by educating and sharing among ourselves that we can grow our businesses together. A very successful businessman once told me we should work smarter, not harder! That starts with sharing!
Simon Clark Hairdressing, 35 Westbourne Rd, Port Elizabeth