Brand vs Staff

24 February 2014/in Articles, Hairdressers Journal /by Karl Markwald

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.

I am a stylist not a salesperson

24 February 2014/in Articles, Hairdressers Journal /by Karl Markwald

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

24 February 2014/in Articles, Hairdressers Journal /by Karl Markwald

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.

Computerisation Question and Answer

24 February 2014/in Articles, Les Nouvelles Esthetiques /by Karl Markwald

1. Should I use Generic Retail, Accounting or Salon/Spa Specific Software?

When talking to owners who are researching software for their spas or salons we are often quite surprised to find that they will be also be considering software that is not specific to their industry, ie accounting software, general retail software and even software designed for hospitality like restaurants. In my experience there is almost a 100% failure rate of these types of systems to satisfy the needs of salon and spa owners and they end up writing off the money initially spent on these systems and purchasing a system that is designed for them.

When it comes to the wellness industry which includes beauty salons, nail salons, day spas, hotel spas (amongst other types of spas) and even will cross over in to the hair industry and medical aesthetics there are core businesses requirements and processes that are common to all. These include things like detailed Client Record keeping, Appointment Scheduling, the Sale of Retail and Services, Gift Vouchers, Loyalty Schemes, Commission Calculations, Stock Control for both Retail and Professional Stock and Communication with clients via Email and SMS (amongst other things).

If you take the flow of information in a salon or spa environment it will go something like this. A client calls in to make an appointment. If not already on the system a new client record will be created. Thereafter the appointment will be created for the relevant service and staff member. Once the client comes in and has completed their service they will proceed to “checkout” and possibly add a Retail item to the sale. Once the sale is completed the information will appear on a day-end cash up so that you can account for all transactions that took place and ensure that all corresponding money is in the til. Stock levels will have been adjusted throughout the day as stock was sold. At the end of the period you will use all of the daily transactions to calculate staff service and retail commission as well as generate reports to see how well you have performed. You will also send out communication to your clients to remind them of appointments, inform them of news as well as promotions.

When the client returns for their next visit the cycle begins all over again but now you have a history of the client and are able to provide them with a more personalised level of service as a result of tracking all their previous visit’s information.

There are many other processes that could be mentioned but this process makes up the core of what is common amongst salons and spa’s. With all of this in mind it is very obvious why accounting systems, retail systems and restaurant systems are not applicable when running a salon or spa.

Apart from the different types of salons and spas already mentioned it’s also worth highlighting that a beauty salon could be run from home salon or an exclusive shopping centre. It could even be on a ship, in an airport or be mobile. It could be a standalone branch or belong to a group (or franchise). The common elements amongst all of these include the fact that there are still clients booking treatments with therapists as well as purchasing retail items and gift vouchers.

2. Should I use Desktop or Cloud Computing?

The question of whether to use Desktop Software (ie software that is installed on your computer and does not need an internet connection) versus Cloud Computing (ie software than is accessed via the internet running on someone else’s server and infrastructure, ie the software is not installed on your own computer) is one that is being asked more and more and is demanding more attention than ever.

Cloud computing is something that we are all making use of more and more on a daily basis and is starting to become more and more of the standard way of working.

Examples of cloud computing that we use every day will be things like online airline bookings or online movie bookings.

To put it another way DSTV offers the movies on demand option whereby you can pay for and view a new release movie (as long as you subscribe to their service) – this is similar to Cloud Computing. On the other hand if you have a DVD player you can purchase your own movie and watch it over and over for as long as you want. The down side is that your upfront purchase will most likely be higher but you will have unlimited access to the movie. To enjoy the movie that you have bought you will need to take the DVD with you and also have your own DVD player, whereas with the DSTV you can just take your smart card and use this as your “log in” to the DSTV infrastructure that will play the movie for you. One thing, from an infrastructure point of view, that Cloud Computing does require is an internet connection, which will give you access to your providers infrastructure. In much the same way as DSTV requires you to have a decoder that allows you to access its infrastructure.

In first world countries cloud computing is fast becoming the first choice for business software in many environments but in places where internet connectivity is volatile cloud computing has its drawbacks.

The nature of your business will determine the feasibility of your use of cloud computing. The main benefit of cloud computing is the fact that you can access your data from anywhere. Not only you but your clients and your staff. This means that a new world of opportunity is opened up that allows you to capitalize on things like online bookings and the like. Other benefits include low maintenance and downtime as only the server ever needs to be upgraded rather than every computer in your business and home. Also data backups are now (hopefully) managed by the company hosting your data and thus you don’t necessarily need to do your own back-ups, although this has other drawbacks like losing access to your data if you don’t pay your fees.

The first downside of cloud computing I want to mention is speed as this is dependent on your internet connection. So, if you are on a very slow internet connection then you may find yourself taking a lot longer to basic functions like sales and bookings.

The second is downtime. Usually the company that hosts your system will be online 99%+ of the time but your business is not and whenever your internet goes off then you will go offline and not be able to view bookings, enter sales or do other functions. In an office environment this can be managed as you can simply return to a task later when your internet is back on, but for a point of sale environment your clients will not be as accommodating if you are not able to assist them there and then.

The third point is functionality. This may be surprising but compared to desktop software cloud computing as we know and experience it on a daily basis is fairly new and systems functionality is having to be built from scratch. When compared with desktop software that has many years worth of programming the cloud computing versions often lack the array of features that the desktop versions offer. We just tend to be so focused on the fact that we can access our data from anywhere and the other benefits of cloud computing that we tend not to think about this point. However, cloud computing will catch up in time and surpass what desktop software can do because everyone’s energy is going into making this happen.

3. Should I Rent or purchase upfront?

Generally speaking there are two ballparks that software pricing structures fall into, namely Upfront Purchases or Rentals. Upfront purchases then may or may not charge for support fees or license fees on a monthly or annual basis. Rental fees just go on indefinitely. In my opinion business software should be accompanied by a support & upgrades structure because the nature of business software is that it is a system (multiple elements and components that combine for a purpose) and implementing software is a process that takes time. This coupled with the fact that business needs change over time means that what you want/need today may be completely different in 6, 12 or 18 months. Therefore treating your software provider as part of your team rather than an outside supplier is a far healthier scenario. Whether this is provided as part of the rental or part of an additional fee the service should be considered important and therefore made use of.

When worked out over time you determine if you are spending the same amount of money and what you will be left with if you stop spending money. For example, at what point does your spend on your rental equal the amount you spend on your upfront purchase? Also, if you stop paying your rental do you get locked out of your data or can you still use your software but just not get any support? Personally I don’t like the model of compulsory annual license fees as these say that you have to buy your software and then pay for it again each year. I think that support services should be optional and if not subscribed to the user should still have access to their system.

Note that Cloud Computing generally is sold as a monthly service and is also known as Software As A Service (SAAS). The reason being is that by definition you are not supplied with a piece of software that you can install and use on your own without “subscribing” to the service on a monthly or annual basis. You may have started to notice that many software providers that provided installed desktop software using an upfront purchase option have also started to move towards the pricing model of monthly rental type payments. This means that the software is immediately accessible but over a long period of time you will most likely end up spending more.

4. Should I download free software?

With the availability of just about anything on the internet the temptation to simply download a “free” piece of software is high. However, there is a cost involved. The cost Im referring to is the cost of the time that you will most likely waste in half-heartedly implementing the free software before throwing in the towel and investing in a system that will actually bring value to you.

Keep in mind that the implementation of management software is a process and takes time. It is not a TV that you turn on and off at your leisure. Rather it is something that you can influence based on what you put into it and this does take work. Therefore, apart from other benefits (like a quality product and good back up service) paying for your software motivates you to invest the time and energy required in order to implement your software because your money will be wasted otherwise. With free software, however, if you download it and fail to implement it then you have not lost any upfront money and so the motivation to “make it work for you” is low.

5. Should I get my own software custom developed?

On many occasions over the years I have heard owners tell me that they had a friend or a relative custom build them a piece of software for their business only to find after 6 months, a year, 5 years that the programmer has either left the country, become too busy to carry on the project or has simply lost interest because the returns for them are not worth it to maintain on an ongoing basis.

Therefore there is a place for custom development but it should be on top of an existing system that is tried and tested in the market place and the custom development is more tweaking the system according to your needs rather than building it for you from scratch.

6. Should I use an international or local system?

I remember a particular spa group about 11 years ago hiring an I.T consultant to help them choose a system. This particular consultant was concerned about choosing our company because we were a South African company rather than a U.S or UK or some other “international” company. The irony of it is that the “international” company that we were competing against for the business is no more and we actually picked up many of their clients over time.

When deciding on a software management system you need to look at the product and the company that is backing the product. What you will find is that the product is only as good as its local representation in an area. You can therefore have a situation whereby a company that on paper may appear to have an inferior product to another company may actually outperform its counterpart because their service in the local market place is better. It becomes a matter of successfully implementing 80%-100% of an inferior product verses 10%-20% of a superior product.

Other factors to look into apart from what the product and company can offer you today is what they can offer you in 6,12 or 24 months. You should therefore find out about the vision for the company as technology is changing the playing field almost daily now and things are shifting very quickly.

In South Africa I have seen many “international” systems come and go without making meaningful inroads into our market and instead seeing local system develop and flourish.

Part of the reason is that a local company will be more passionate about its own product than someone who is simply an agent for another company. Therefore the service at all levels will usually be better.

My final point on this section is that software support is key. You need instant access to a help desk at any time because your business cannot wait 2-3 days for a simple query to be answered, you also cant call at 4am or some other ridiculous hour because of time zone differences.

7. How can I access my data from home?

We often get asked by owners how they can work from home. The most ideal scenario for this is cloud computing because this means that you can work anywhere, anytime without interrupting users at the salon. Using your web browser means that you can work on a Mac or Windows and even on a tablet or smartphone.

There are alternatives that are less desirable but still functional, like using remote desktop or an alternative third party remote access tool. The problem is that if you only have one computer at the salon then you will take control of that machine and prevent salon staff from working.

8. Can I run my business from an Tablet?

With the advent of cloud computing and mobile / tablet accessibility the question is coming up more and more often as to whether you can use a tablet to actually run your entire business. My answer to this is more No than Yes. Even if you have a full cloud computing solution the point of sale / reception environment requires robust hardware that integrates with peripherals like cash drawers, printers, barcode scanners, fingerprint readers and magnetic card readers. I have no doubt that in time the mobile devices will start connecting more and more to these peripheral devices, but then the purpose of the tablet’s mobility is defeated as it would need to be “docked” in the reception area to work properly.

A tablet should rather be used to supplement your existing system, ie for clients to update their personal and medical information or for staff in the salon / spa to look up client and booking info from a tablet in their treatment room or in the staff room.

Communication is a two way street

24 February 2014/in Articles, Les Nouvelles Esthetiques /by Karl Markwald

I’m sitting at a restaurant in the new Cape Quarter, where I usually go to write my articles. While I am there my attention is grabbed by a customer who is visibly upset with the service that he has received and he is waving his hands around and raising his voice to a lady who informs him that she is the owner of the restaurant.

He is trying to communicate to her how unhappy he is and why he is so unhappy and she is trying to communicate to him the care she takes to train her staff to do their jobs properly. This situation was obviously not a great situation for the owner because there is an unhappy customer who is making a bit of a scene in front of other patrons. On the other hand at least she is presented with an opportunity to remedy the situation.

Disaster Recovery

24 February 2014/in Articles, Les Nouvelles Esthetiques /by Karl Markwald

We have all experienced the feeling of annoyance after typing a long SMS or Email and just before sending you inadvertently push a wrong button only to find that your entire message is lost forever and you have to start all over again. If you have ever had a cell phone stolen then you will be familiar with the exercise whenever you receive an SMS of kindly notifying the sender that your cell phone was stolen and all your contacts lost and can they please identify themselves so that you can add them back to your contact list.

Most of us will also have experienced the cold sweat induced upon learning that your computer has crashed and no data could be recovered or that it has been stolen and there were no backups. If it was your personal computer then the extent of your loss will include things like important documents, emails and your beloved photographs. If it was your business computer then you may have been reduced to tears upon learning that your sales, clients, bookings and other important data have been lost.

Strategic Planning

24 February 2014/in Articles, Les Nouvelles Esthetiques /by Karl Markwald

The following dialogue is taken from Lewis Caroll’s Alice in Wonderland between Alice and the Chesire Cat when Alice asks the cat:

“Would you tell me, please, which way I ought to go from here?”

“That depends a good deal on where you want to get to,” said the Cat.

“I don’t much care where–” said Alice.

“Then it doesn’t matter which way you go,” said the Cat.

“–so long as I get SOMEWHERE,” Alice added as an explanation.

“Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.”

To some all of this up: “If you don’t know where you are going it doesn’t matter how you get there”.

I thought it would be a good idea to ask the questions “Why are you doing what you do, where is your business going and what are you doing to get it there?”

The process of doing this is known as Strategic Planning, which takes a look at your Vision, Mission, Strategy and Structure.

Tax Annualisation

24 February 2014/in Articles, Les Nouvelles Esthetiques /by Karl Markwald

Hopefully you are reading this article before 28 February 2013. If not then at least you will be prepared for 2014, because I wanted to discuss a few points regarding tax that may be applicable to you and your staff members.

The cost of sales

24 February 2014/in Articles, Les Nouvelles Esthetiques /by Karl Markwald

The term Cost of Sales is one of those accounting terms that is common language for some but for most makes you want to curl up in a little ball and suck your thumb while rocking yourself gently for comfort. It really can be a nightmare to try and manage.

It has been my experience that many owners from within the spa industry couldn’t be bothered with cost of sales and the implications thereof. They see it more as a random requirement for their accountants. On the other hand spa owners who perhaps come from outside of the spa industry (like manufacturing or big retailing) are obsessed with cost of sales almost to the detriment of other areas of their spa business.

I think that owners from “big” business are used to dealing in very fine margins and if these margins are not controlled correctly the consequences can be extremely damaging to their bottom line.

The smart way to work hard

24 February 2014/in Articles, Les Nouvelles Esthetiques /by Karl Markwald

I have been thinking more and more of late about the fact that the rapidly increasing rate of technology these days does not always result in us having more time on our hands. In fact it is very often just the opposite.

I remember a trip a took on the Orange River in Namibia about three years ago. When you arrived at your base camp you packed all your valuables (cell phones, wallets, etc) into safe storage and off you went for 5 days. It was the most surreal feeling as we drove back into cell phone range after our trip. What had happened while we were away? Had any countries gone to war? Were regimes overthrown, what was going on in the world? Any of these things could have happened and we would not have had a clue.

Thirty years ago this feeling of being out of touch would have been quite normal but today it’s amazing to consider how “plugged-in” we are to the world around us due to technology.