South Africa VAT Rate Changes

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What is happening?

On 1 April 2018 South Africa’s VAT rate will change from 14% to 15%. This will affect all VAT registered businesses based in South Africa.

What is the impact on ESP settings?

There are two things that need to happen:

  1. Change your global VAT rate in your system set up
  2. Update your price lists to reflect the new VAT calculations

There are some other implications about running certain reports in cases where you run across the old and new VAT ratings but we will release some more info on this shortly.

There is also the consideration of refunds for items purchased at the old rate but returned at the new rate. We will also comment on this further once we have considered the options available.

When do I need to change my ESP VAT settings?

The changes need to be made at the end of trading on 31 March 2018, before trading begins on 1 April 2018.

How do I change my ESP VAT settings?

To update your Global VAT percentage:

In ESP Business Manager navigate to Setup > Control Panel > Sales Settings > Sales Tax > Change the Amount to 15%.

To recalculate the cost and selling prices:

For Retail, Service, Package and Courses edit each item and update your Selling and Cost prices using the blue arrows to recalculate the including or excluding prices according to the new VAT settings.

 

 

Use ESP’s Price List manager to mass update prices

If you have the ESP Price List Manager then you have the option of mass updating including or excluding values based on the new VAT formula. If you have not purchased this module but would like to then please contact us on sales@esponline.co.za to make arrangements.

Anything else I need to know?

If any further information or implications become clear to us we will publish them on our web site.

In the meantime we strongly recommend that you start planning for the VAT increase now. Nominate a person who will be responsible for this in your business and make sure that they know what they need to do when they are going to do it well in advance.

We will not be in a position to do this on behalf of all our clients and so need everyone to prepare as best they can in advance.

Seven ways to fill your schedule

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By Chris Parker

If your appointment schedule is full for the next three years and you have no plans to expand to more branches or more stations in your salon and you are happy with your current turnover then the following information will not be that useful to you.

However, if you still have space in your appointment book that you would like to fill then perhaps some of these tips may come in handy.

Book their next appointment before they leave

This practice is nothing new but very often is not used. When a client walks out make sure it is with some sort of retention plan in place. Try and not ask a closed end question like “Would you like to book your next appointment?” to which a client can simply answer no and close down the discussion. Rather ask “When would you like to book your next appointment for?” If the client says they will get hold of you when ready then ask if its ok for you to send them a follow up reminder, just keep the door open.

Remind them of their appointments

A client who does not show up for their appointment means empty slots that will be harder to fill on the day. Two SMS notifications should go out, one when their appointment is first made that confirms the fact that you have in fact scheduled them and secondly a reminder the day before. Ideally this should be automated so that its not up to staff members to remember to do it.

Work harder to find an opening

If you are fully booked don’t let the conversation end there. If it’s a new client then work hard to make a plan because the cost of acquiring new clients is very high and may be worth your while to offer an incentive to come at a different time. If it is a regular client then work just as hard to make a plan as regulars are your bread and butter throughout the year. Encourage staff members to check a clients profile while they are on the phone to give them a sense that they know the client and make them feel important to the salon. If you are anticipating a busy time ahead and perhaps a lot of tourists then a good practise would be to send out an SMS to your regulars to encourage them to book early to avoid disappointment during busy times.

Find out what their goals are

The consultation with your clients is the focus area here. Finding out what their desired outcomes and goals are regarding their hair implies a journey rather than a once off stop. A journey implies future visits and the question “What are we doing today?” starts to feel a little bit out of place because it has no greater context and it’s almost like you are surprised they came back to see you for another haircut.

Flag first time visitors

Take special note of first time visitors. These are your most expensive to acquire and so you want to make especially sure that they come back again. All of the other points in this article are especially true for first time visitors and you want to get some sort of sense of how many first time visitors you are retaining.

Give them a chance to complain

I recall getting my car serviced recently. When I collected the car I asked the service advisor if all the headlight bulbs had been checked as I recalled that one was faulty. He advised that it is a standard check and that they were all fine. I asked him to double check as I was sure there was a problem. A technician from the workshop re-assured him that the bulbs had been checked and were all fine. However, we all went over to my car to check and it was confirmed that there was actually a problem with one of my bulbs. The concern for me was, if such a simple problem had been overlooked what else had they missed. Nevertheless the service advisor was very apologetic and advised me they would order the bulb and call me to bring the car back when the bulb arrived. I left without kicking up much of a fuss.

A few days later I received a machine generated follow up SMS to find out if I was happy with the service received. At that point, when I was not face to face with the service advisor I felt the need to say something, and I did. I then received a follow up call to further understand my dissatisfaction and take further measures.

Now, the point here is that they found out about two things, one the fact that poor service had been offered, which they could address internally and two,  that I was actually an unhappy client even though I didn’t say anything at first.

It takes very little to get a follow up SMS going out to your clients each day and in most cases your clients will not respond to them if they were happy. However, if they were unhappy it gives them a safe way to complain and gives you an opportunity to save a client. 25 cents for an SMS versus the cost of losing a client..? It seems like a no-brainer to me.

And one more thing … if a client complains then give them something as an incentive to come back. Start with a “sorry” but finish with something enticing like a freebie or a discount of some sort. Nothing tells them you actually mean it like when you put your money where your mouth is.

Contact them if they don’t come back

Follow up with clients who do not come back to your salon. Your methods should be slightly different for different types of clients. For example, in one process you want to know of any of your top spending clients who have not come back and then follow with them with one particular message. Then, in another process you want to know which of your first-time visitors have not been back and then follow with a different message. Then for the general population of your clients who have not been back you may follow up with a more generic bulk message.

Conclusion

A full appointment book is not the only way to generate revenue but it plays a large roll and very often we have more control over this than we think. Some of the requirements can be automated with technology but others rely on the efforts of your staff members. Therefore it is critical that your staff are trained on what is required of them in order to play a deliberate roll in your salons successful retention of clients.

Guidelines for effective email campaigns

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Email was first introduced in the 70’s and by the 90’s it revolutionized the way we communicated with one another, it opened doors that postal mail could never have accomplished in reaching the masses instantly.  Then the SMS appeared, this enabled us to send shorter messages to each other via mobile phones, this made email seem a bit archaic coupled with the explosion of social media to our everyday life.   Approximately 40 odd years later, however, email has been given new life and has prevailed as the best way to communicate effectively with intended recipients.

Email’s resurgence continues to revolutionize the way we communicate with each other in a smarter and more effective ways; it is mobile friendly (stats show that around 65% of all mails are first opened on a mobile device), it delivers rich content with the likes of graphics, icons, buttons and very importantly it can track the engagement of readers tell us how many people have received, opened and clicked on the emails and even what they have clicked within the emails. All of these factors combined is why in 2016 email is noted as the most effective marketing tool available.

Have you adapted?

Now, considering that email is a far cry from what it used to be it begs the question, have you adapted to capitalise on the new way of managing email campaigns or are you still emailing in the same way as you have always done?

Here are some pointers to take into account when sending out emails to your clients:

1.      Create mobile friendly emails (responsive)

Before you start ensure that your emails are built using a mobile friendly platform. The majority of readers are now reading email on their mobile phones and therefore your emails need to be easy to read on a phone. Responsive emails simply means that the size of the email will automatically be altered to the device the email is being viewed on – small and readable if opened on a mobile device, normal size if opened on a computer, also. Creating one big image as your mailer with all the text within the image is a bad idea as you will have to zoom in and scroll around the page to view the entire message. The more “html” the better.

2.      Have a very clear purpose

Establishing the purpose and objectives of the email campaign you are about to embark on will keep you focussed on what is important as you create content for your mailer and sure that it flows logically in a top down manner.

As part of this process try and stick to just one clear message per email campaign. Just because you now have a very powerful way to share content with your readers doesn’t mean you should do it all in one email. In this process think about what you want to say to your clients and what you want them to do in response. This way of working also makes it easier to measure the success of your campaign.

3.     Use catchy subject lines

Your subject line will determine whether or not the reader continues reading.  It must be catchy yet also have great integrity, ie if the reader does open the email then the content of the email must directly relate to the subject line (it must deliver on its promise). This will further re-enforce the message you are trying to get across as well as increase the chances of the reader opening emails from you in the future.

For catchy subject lines try using the headline approach as our Newspapers and Magazines have taught us (relevant, short & catchy), it’s been capturing readers since the beginning of time – so make it short and catchy – “Summer is Here – Time for a Change”.
Or, try using a question – as recent studies show that subject lines phrased as a question perform better than using statements in the subject line – “Need a Beauty Boost?”
Or, if your email campaign is targeting by a specific location – incorporating the location reference into the subject line could also add a touch of relevance – “Special Offers at our Sandton Spa.”

4.     Keep your message as concise as possible

Stats also show that readers generally only spend 15 seconds scanning an email – therefore we have to catch their attention from the get go.  Capturing our audience will determine the success rate of the campaign. A good combination for this is a good image that tells your story, then a brief write up that further elaborates on the image – all of which must be consistent with your subject line. The less you can say to get your message across the better.

Put the most important information first as people have stopped reading longwinded text therefore let the content expand or flow from the subject line.  Also note that you can add more value by providing access to exclusive content. Remember that email marketing success is to get credibility from the first email so readers look forward to the next email campaign, rather than delete upon receipt because we didn’t get it right the first time.

If you do have a lot to say on a particular matter then add this to the blog page on your website and put a link for the reader to “read more” on your web site. This allows the reader to easily scan your mail for topics that interest them and then focus in on that particular part of the email. It also helps drive traffic through to your website, which gives you further opportunities to engage with them.

5.      Include a clear call to action

A call to action is an instruction to the reader to provoke an immediate response by clicking a button and engaging in whatever the required action is.  Preferably only use one call to action per email and make it easy to see.  Examples of Call to Action buttons are – Book Now; Contact Us; Find Out More; Click here to Enter.

Provide incentives for readers to respond to the call to action.  Readers love getting offers, discounts etc.  Competitions is another sure way to entice the reader to participate using the call to action button and thereby assist in increasing your email open rate.

6.      Identify yourself clearly

This may seem very obvious, however, it is surprising how overlooked this very simple requirement is.  This is a simple matter of making sure the from address and reply address are correct as well as your business name being used. This will help the reader to trust the mail before they open it. Ensure that you have your own domain name rather than using free email accounts like Google for your business. The domain name is what you get when you set up your web site address, ie www.yourdomain.com. You will then be able to use “yourdomain” for your emails.

7.      Segment your recipient list

When sending emails you want to try and reach the people who are most likely to open the mails as well as respond to your call to action. Sending emails to your entire database is not always the best way to do that. In many instances it is better to target segments of your database based on things like gender, purchase history, loyalty status etc. This will also help connect the content to the reader more effectively and be more meaningful for them.

8.      Analyse reader engagement

Not only is Email Campaign the No.1 digital marketing channel, it is also the top source of data for analytics as the data generated from the tracking stats enables us to get results quickly to determine the success rate of our campaign as well as the relevant stats to assist us in other marketing outlets.

Data from stats include – how many of your mails are opened on a mobile device, total number of emails sent, total number of emails delivered, the breakdown on opened mail on Mobile, Desktop & Web, what the click rate from and more.

Its not enough to just have the stats though. Each time you do an email campaign you should be smarter than the last time. In order to do so you actually need to learn from the analytics and change your behaviour accordingly.

Conclusion

Email has changed and so must you if you wish to remain competitive. Therefore create mobile friendly emails, have a clear objective for each campaign, create subject lines that grab the reader’s attention, have clear concise messages consistent with your subject line and objective, store bulky content on your website with links to read more, segment your database in order to target specific recipients and finally have a clear call to action. Most importantly be ready to respond. It would be a shame to run a successful email campaign only to drop the ball when readers respond.

 

Email Vs SMS 

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Email Vs SMS

What a co-incidence – I’m sitting at my coffee shop of choice just about to start writing this article on the difference between SMS and Email and I receive an SMS notifying me that ABSA Insurance phone lines are down due to the storm in Gauteng yesterday. Read more

Building your team

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Chris Parker – SAHJ

A year ago I bought my 3 year old son a spacerail online, which is a toy roller coaster with little silver balls that are lifted up by an electric mechanism and dropped in at the top of the roller coaster and then begin weaving their way down the maze of rails to the bottom where they once again begin their journey back to the top. It was going to be amazing to share the experience of building and enjoying this marvelous toy together. I was very excited, my 3 year old son on the other hand had no idea what a spacerail was.

Once it arrived the first thing that caught my eye was the age bracket on the box, which for 16 years and older. Ok, so perhaps the build would take a little longer than initially planned …

Read more

Price It Right 3

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Chris Parker – SAHJ

In this third article on pricing we wrap things up. In the previous two articles we asked the question of how it is sustainable for some salons to have such cheap pricing, especially for services that have high costs associated with them. This question raised the bigger question on how to go about pricing your products and services as a strategy.

In order to answer these questions we identified that pricing, rather than gut feel, can be quite a scientific process and that many theoretical pricing methods and factors could be taken into consideration when deciding on pricing. In the context of a hair salon we identified “cost-plus pricing” and “competitor based pricing” as probably the two most influential methods used by most because of the fact that we need to cover costs before we can start making a profit and also our pricing needs to be competitive in the market place so that clients would perceive fair value for the products and services they were buying from the salon.

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Price It Right 2

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Chris Parker – SAHJ

I recall the time shortly before asking my wife to marry me, I started shopping around for a wedding ring. I knew nothing about diamonds, I thought 1 carat was small – after all its only 1, how much smaller can you get? Believing that 1 carat was the lowest number you could get I thought I would probably need something bigger – maybe 2 or 3 carats (for those of you who have bought diamond rings bigger than 1 carat please stop reading here).

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Price it right

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Chris Parker – SAHJ

A Hair Journal reader recently wrote into the magazine about salons in his area and the extremely low prices they are offering and how is this sustainable to a salon and where are corners being cut? He also mentioned he knows of a few salons who’ve recently closed their doors.

It’s a very good question, if the salon down the road or in the same shopping centre charges more or less than you do for the same product or service what should you do? How can you compete?

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Mobile Transacting

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About a year ago I wrote an article called “To App or not to App?” As the title suggests it was a look at whether salons should have their own mobile app. In asking this question we discovered that apps can and should be used by salons but this did not necessarily mean that you needed to run out and pay someone to build you your own app. Rather we recognised that there are many different types of apps that solve different types of problems for your business, from utilities to third party to industry specific, white label and custom developed. Thus the conclusion was nothing revolutionary in that when making your decision about using mobile apps you had to answer a very simple question about what problem you wish to solve and how would an app solve the problem for you.

A year down the line I would like to revisit this question and expand upon the topic as we see a rise in the area of third party apps that specifically focus on mobile transactions, ie payment via mobile phone.

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Are you engaged?

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In this month’s article I would like to ask the question “Are you engaged with your clients?” I think that many salon owners will feel a lot of pressure to be sending out regular emails to clients telling them of news, specials and other information that they hope will lead the clients to return and spend more money with them.

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