Consumer Protection 3/4

In this month’s article, as we continue the series on the Consumer Protection Act we take a closer look at the implications on Gift Vouchers and Sales Records.

Vouchers

The main change in the new act with regard to vouchers is that the expiry period has changed. Instead of you placing a three or six month expiry date on your voucher you now have to provide a minimum of three years for your expiry date.

The reason I say minimum is because the act also says that you as the supplier may agree to extend the expiry date at any time. In this case you cannot fall back to the 3 year expiry date if you have agreed a longer period.

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Consumer Protection 2/4

Who are you?

Last month we started a series on the new Consumer Protection Act, which came into effect earlier this year. It was an introductory article in which we covered the fact that the new Act was brought into being because we had no proper protection for consumers in our country especially those who were particularly vulnerable. We also made mention of the National Consumer Commission who would be the enforces of the new Act so that it would actually make a difference in our lives. We also looked at the Consumer Protection Regulations, which supplement the Act in interpreting and applying it.

This month we will take a look at Business Names and what is required in the new Act.

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Consumer Protection 1/4

The Consumer Protection Act (CPA) came into effect on 1 April 2011 and received much publicity in the months leading up to its inception, sparking fear into the hearts of suppliers and joy as well as eager anticipation into those of consumers.

In this month’s article we will have an introductory look at the new act, why it was put into place and what it is meant to achieve.

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DIY

Have you ever tried to self-diagnose a medical ailment using Google? Well I am sad to say that I have made this very unfortunate mistake. I thought that I would save myself the inconvenience and cost of visiting the doctor by taking matters into my own hands. At the very least I would know as much as he would about the possible causes of my symptoms and I may even be able to offer some valuable insight as to what my diagnosis should be.

Before I began my research I generally felt ok (apart from my symptoms) but the more I researched the more concerned I became. Eventually I found myself in a state of panic as I learned I had only short time to live and I should go to the emergency room immediately as most of my symptoms lead to heart attacks, strokes and many other ailments that would require chronic medication for the rest of my life! I even began to experience new symptoms as a result of the panic that had now set in. I even found myself investigating new web sites about panic attacks!

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Are you dispensible?

If you went on holiday for 6 months what would be the state of your business when you came back? Would your salon be standing empty, stripped of all your furniture and equipment? Will your clients have deserted you or will your staff be holding your salon ransom demanding that you hand over the business to them else they will turn you over to the tax man? Does the very thought of leaving your salon alone for more than a few days send shivers down your spine?

Why would you even consider such a preposterous idea? Well, in the past I have spoken to more than one salon owner who has found it difficult to get away on decent leave for up to 3 years at a time, which has its obvious problems. I’ve also spoken to others who wish to slow down their involvement in their salon and hand the reigns over to someone else who would run it for them or perhaps even buy it. There are also situations where salon owners want to open more than one salon and can’t physically be in more than one salon at a time.

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What are my takings?

A question that I find coming up quite often from salon owners and one which there seems to be much confusion over is what their business takings are at the end of the day or month and the information that must be given over to their accountant. A common viewpoint is that the money you bank is the income that you have earned.  However, this is not necessarily true. In fact sometimes just the opposite is true.

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Staff Rights

Recently a Hairdressers Journal reader wrote in requesting information on the rights of stylists in the Western Cape with regard to their salary structures as she and some other salon owners had become concerned with the high number of salons being opened by unqualified persons and stylist rights being infringed upon. Specific reference was made to staff contracts and deductions from staff salaries.

In this article I will take a look at some of the basic minimum requirements with regards to staff contracts, commission calculations as well as salary deductions. Note that the bargaining council points raised in this article related to the Western Cape and may vary from council to council.

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Brand vs Staff

Who are your clients loyal to?

Have you ever been a patron of a business simply because of one particular person?

Yesterday I realised that I am supremely loyal to a particular musical equipment store in Cape Town. Since the first time I visited there 5 years ago I can’t even remember setting foot in another music store.

I also realised that this entire time I have been dealing with only one person at this store and whenever I call or visit the store I always only ask for this particular person.

Over the past 5 years I have referred numerous people to this store, bought equipment on my own behalf and bought equipment on behalf of others, and whenever I refer people to this store I always refer them to this one particular person.

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I am a stylist not a salesperson

Many people are terrified of sales and this is largely due to the fact that nobody likes rejection. The thought of pushing a product onto someone who may not need or want is something that is not for us but rather those who are born sales people with very thick skin.

Many of us have the stereotypical impression of the untrustworthy used car salesman burned into our minds or the infomercials on TV that are always telling us to “wait, there’s more …” and we never want the world to view us that way as it is beneath us.

Other characters that do much in the way of diminishing the view of sales and salespeople are the cold-callers who phone you after hours to inform you that you have been pre-qualified for one of their new cell phones or insurance policies. You have no idea how they got your number as you have never dealt with them in your life before. As soon as I hear the words “Good day is that Mr Christopher Parker,” I know it is a cold call. I quickly confirm the fact and politely inform them that I am not interested and thank them for their call.

On one occasion I actually had the same sales representative call my house three times in a row, without even realising it, trying to sell gym contracts to myself and then to two of my housemates. How many calls must you have made in a day to not realise you are phoning the same number three times in a row?!?

The resulting negative perception of sales goes hand in hand with the thinking that sales is an art, a viewpoint I held about sales before I ever tried it. I recall the first time that I heard sales described as a science rather than an art and it made complete sense as sales was something you could learn rather than something you were born with.

With peoples (and stylists) perception of sales shaped with such negativity – how will any retail ever get sold in the salon?

You are already a salesperson

Whether you like it or not you are sales person (we all are) and most of the time the product that you are selling is yourself. For example, as a stylist, when you do a job interview you present yourself in as positive a light as possible. You put forward your skills (features and benefits) and convince the interviewer why they should buy your product (you).

When you enter into a personal relationship you make yourself look and sound as attractive as possible so that the other person will take an interest in you.

When you see a client you do a very similar thing as you want them to return to you. You sell yourself as a person and your skill as a hairdresser. You may even boast a little about how much you love the salon where you work and how much better it is than other salons.

However, only time will tell whether your product (you) is able to deliver on the promises you have made as the salesperson.

What are you selling?

Obviously the end goal of this article is to focus on retail sales but you should not just be selling the product on the shelf you should be selling everything about the salon so that the client buys into the whole business and not just the product, which they can most likely buy elsewhere.

Every little thing you do in the salon makes a difference to the client. From the way you answer the phone to the refreshments that are served. Every little bit counts when it comes to winning the client over.

If you are complaining about the owner or the other stylists then you are making it harder for yourself and everyone else at the salon to achieve their goals.

Once you have realised that you are always selling everything about your salon then retail sales just fall in to your sales mix and the results will take care of themselves.

Where to start?

The very reason that your hair salon exists is because there is a need in the market place that the salon is satisfying – people need their hair cut and styled, they need advice and they also need the right products to use on their hair. Once they arrive at the salon you as the stylist are there to fulfil this need and part of that fulfilment is to ensure that they have the right products.

Before you can begin satisfying the clients needs on an individual basis you need to know what they are, which means that you need to engage the client on a professional level. Sure, it is important to build personal relationship with the client but within the salon your duty is to do business. You need to always be selling to them, with sincerity and with a long term (business) relationship in mind. Therefore if after you have had a client in the chair for 60 minutes or more and the end result of the conversation is that they know all about your private life and what you did on the weekend, in my mind you have neglected your professional duty. You should be able to not only walk away from the appointment with a clear knowledge of what the client is currently using, the problems they experience, the desires they have (for their hair) but this should also be noted in their client record card so that the next time they visit you don’t have to ask them all the same questions but rather you simply pick up where you left off, once step closer to closing the sale.

On a practical note avoid asking the client dead-end questions to which they can answer “Yes” or “No” as these are conversation killers. For example asking them “do you need any shampoo?’ gives them a choice of two answers “Yes” or “No” and ends the conversation. Psychologically it also gives them an opportunity to reject you and would possibly cause you to not ask the question at all.

Rather ask them “what are you currently using, how long have you used it, what do you like about it” and so on. Once you taken the time to evaluate and understand their needs only then are you entitled to promote and alternative solution.

Know your product

I can remember working in a restaurant while studying and the manageress springing a question on one of the waiters about what was in the chicken salad. When he replied that he did not know her response was that he find out very quickly, or else! When she sprang the question on him later that day and his response was “chicken” she promptly sent him packing. As funny as this is the point is that when selling a product you need to know what’s in it and more importantly why the ingredients are beneficial else you will be simply reciting a lot of boring facts that are meaningless to the client, always think “feature – benefit”.

Jerry Seinfeld in one of his stand-ups jokes about how TV commercials often advertise a special ingredient but nobody has any clue what the product is or does. The example that he used was one that was advertised as now having an extra drop of Retsyn®. His comment was “great, it’s about time we were all getting some more retsyn® around here!” He is obviously making the point that no-one has any clue what retsyn® is and why it is beneficial.

So don’t just rattle off meaningless technical information about your products but explain very clearly how these will benefit your client.

Another important point is that you are “prescribing” a treatment for your clients hair needs. If you don’t understand your product then you will often get your prescription wrong and the client may complain that the product does not work. Therefore you need to see yourself in higher esteem as the hair care professional that is prescribing solutions for your client’s hair requirements.

Believe in your product

If you use your own salon products then you will be in a stronger position to believe in them with conviction. My wife often asks the waiter, when we go out for dinner, what they recommend or what they think of a particular dish and in most cases they admit that they have never tried it. How can they ever sell it if they have never tried it? All they can do is say that other people like it or whether it is popular or not but they cannot speak from personal experience.

You also need to be able to explain, with a clarity and conviction, why they should buy from your salon and not the supermarket? If you believe that there is not much difference then why not stock the salon with the same products that are on the shelf in the supermarket. If they are going to be paying more for their professional product they need to be convinced that there is a good reason. How can they ever be convinced if you are not convinced?

Conclusion

To use an analogy from the world cup, get into a good position to score. If you have been watching any of the soccer you’ll notice that at the start of the game the team kicking off does not just go straight fro goal, rather they build up and until they are in a good position from which to score. There immediate objective is to retain the ball, string good passes together until they are in a strong position to score and if they have a good enough build up all they have to do is tap the ball over the line, the goal almost scores itself.

So it is with sales. You can’t simply jump straight to the closing question. Rather you need to build to a point where you are ready to close the deal. Your immediate objective is to do a good needs analysis and then once you are in a good position the deal should close itself.

By the way Retsyn ® is apparently “a combination of Partially Hydrogenated Cottonseed Oil, Copper Gluconate and Flavouring”

Cash flow vs Profitability

Whilst on a “course” a few weeks ago I commented to my golf partner (and accountant) after I had just hit another ball out of bounds that I would have to do a provisional return.  At first, this gem of genius yet subtle wit went unnoticed and without the response it deserved. However, when I explained that I had just made an accounting joke – the chuckles continued right to the end of my next follow through. Now for those who are accountants and play golf this is probably the funniest thing since … well ever. But for the rest of you … tumble weed and crickets may come to mind.

In light of this and also following on from the article last year on the Mini MBA I thought I would use this month’s article to take a closer look at the exciting world of accounting.

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