Salon Marketing

Often a misunderstood term, marketing in its broadest definition encompasses every facet of running a business. Marketing includes choosing your location, deciding on type of services, interior decorating, buying equipment and products, hiring employees, setting prices and planning advertising. In short, a marketing plan is everything that goes into providing a tanning service to your customers.

When you decided to go into business, you undoubtedly believed that your salon could provide a needed or desired service to the community. In exchange for this service, you expected that the community would pay a reasonable price. All of the principles of marketing rise from this simple scenario.

First, you had to decide what services you would offer for the community's consumption, what setting would best accommodate the performance of those services and the price the public was willing to pay. Then, so the members of the community would make use of and pay for your services, you had to ensure that your customers' expectations were fulfilled so they would return in the future. And, if you were successful in each step of the process, you made some money.

Simple marketing procedures are inherent in the basics of operating any business, including an indoor tanning salon. However, to make a business boom, you need to pay particular attention to the entire marketing scheme. You must be aware of what you are and aren't doing to enhance the climate in which your tanning services are performed.

The Marketing Plan

According to almost any marketing text, the primary points to keep in mind in devising a marketing plan can be distilled to four essential areas or the Four Ps--product, price, place and promotion.

The Product

Before placing an item on the market, a company must conduct a large amount of research to come up with a product and its accessories. Product planning involves the entire process of investigation that goes into the making of a new product.

Some of these steps include:

·surveying consumer needs

· design

· buyer expectations (meeting them)

· determined final needs

· brand name

· packaging

· services that accompany product

The product isn't just a physical entity to a consumer, it is a physical entity that suits some purpose and completes some need. Many excellent products have failed because they are clever items but no one needed them.

Product development is an ongoing affair, and every manufacturer has new products, products at the height of their maturity and products in decline. Each of these products experiences a lifecycle that begins and ends relatively quickly.

In tanning, the first widely used tanning systems were quartz lamps, initially used for the treatment of disease and later picked up for recreation and beautification. This product, like any other, went through a period of popularity and then entered a decline. Modern tanning began with the introduction of UVA lighting systems and, since the introduction of modern tanning equipment, the products have gone through several phases. New models and refinements of old ideas are being changed constantly for new tanning equipment. They are becoming more efficient and reliable.In a toy store, the product is a toy. In a plant store, it's a plant. In a salon, the product you are selling is the tanning session or any of the other ancillary services you provide. It isn't a tangible, concrete item, but it is a marketable product nonetheless.

When a large corporation decides to begin production of a new product, it does a great deal of research to determine what features will entice the desired audience to buy it. It then sets out to design a product with those features that will be attractive to the audience.

Are you catering to the under-30 age group? To women aged 30-50? To retired persons? To professionals on their lunch break or on the way home from work? It is entirely possible to offer services for all of these audiences in one facility, but the needs and wants of each group will be different.

Those in the first group will be receptive to tanning and to a variety of fitness and beauty services, but it may take some personal selling to hook them on some of your other ancillary services.

Professionals at lunch are pressed for time. If they can take the time to come in, they will be in a hurry and may book appointments well in advance for quick tanning sessions. They may pass up other services, unless the session time is short. On their way home, time is often less of a factor. After a busy day, a stop at your salon may be considered time to unwind. While a fast tanning booth or a 10-minute bed may be the ticket for lunching yuppies in a time crunch, a slower bed with a good sound system could be the key to reaching rush-hour relaxation.

In assembling and re-evaluating the product line of your salon, then, you need to visualize the prospective audience for each service and then look at ways to tailor that service to that audience. Certain services will lend themselves to a particular audience and vice versa.

Price

Price is still one of the guiding factors that companies live by because it represents the power of logic and marketplace. A product must be sold at a price high enough for a company to make a profit but low enough to entice the consumer to buy it. More specifically, a producer will consider a number of factors when structuring the final price:

· cost of production

· consumer price attitudes

· competition pricing

· laws governing fair pricing

· industry pressures

As a general rule to fiscal happiness is never regularly sell something for less than it costs. That is not to say that you can't give free promotional sessions to boost your potential customer base, just don't make a habit of it.

There are other ways of getting new customers into your salon. In figuring what each session costs you, simply add up your costs for a month and divide by the number of sessions taken. If you take everything into account--including utilities, space, rent, payments on the machinery, maintenance and payroll--you should come up with a fairly accurate per-session cost. Include the desired profit and the result is the target price.

However, your target price may or may not be attainable, depending on many market conditions. If your competition is charging less for an identical or similar service, it may not be possible to make the profit you want without distinguishing your service in some way. In tanning's early boom phase, price wars became common and drove many salons out of business. The principle at work was that the more business a below-cost price generates, the more it hurts the company.

Think about it. Suppose salons A and B are both losing $1 per session because of their price war. If A is "winning" and is running 150 sessions per day to B's 75 per day, salon A is losing $150 a day to B's $75. They're both cutting their own throats; salon A is just doing a better job of it.

On the other hand, if salon B combated the price war by selling sessions at cost and lost another 25 sessions to salon A because of the price difference, it would be running 50 sessions per day and breaking even. However, salon A would be tanning more customers than ever, but paying $175 every day for that privilege.

Maximum price will vary by region. Generally speaking, the going or market price will stabilize at a value determined by the community as a whole. If every salon in your area is asking $7 for a tanning session, you may have difficulty charging more unless the service you offer is perceived to be better or special in some way.

For example, if you can offer a first-rate service in correspondingly elegant surroundings, and you can communicate this to the right clientele, you may be able to persuade them that the difference is worth a higher price.

Pricing Strategies

There are a number of other ways to price services and products. Loss leaders (normally supermarkets) take a loss on some items in the hope that the consumer will come in and buy other items on which the retailer can make a profit. Salon owners try this on a temporary basis by giving inexpensive tanning sessions and then making up the short fall on more expensive packages.

Flexible pricing means that the unit cost of an item is negotiable. That is, the manufacturer can afford to sell the same product at different prices to different levels of the retailing chain. For example, a manufacturer of tanning equipment can afford to sell its equipment to a wholesaler at a reduced price but would only sell at a higher price to an actual salon owner. There are two actual prices, but only one for each market.

Multiple unit prices are like quality discounts--the more you buy, the less you pay per item. Two effective strategies are skimming and penetration pricing. Skimming means getting the most profit from a product or one with limited competition. The policy quickly changes when demand lessens or competition enters the scene. Penetration pricing is charging an artificially low price (similar to loss leaders) and hoping to make up for it with dramatic sales. The low profit margin discourages competition and provides substantial benefits to consumers.

Both skimming pricing and penetration pricing have been applied to tanning with mixed results. When many salons opened, there was little competition and several salons took advantage of skimming prices to maximize their profit. Competition hit these salons hard and forced many into competitive price wars. Other salons that later entered the market tried penetration pricing but found it difficult to service heavy client loads and maintain an adequate profit margin.

Commercial tanning systems equipped with various options basically will run anywhere between $2,000 and $10,000, and higher for high-pressure units. When examining equipment costs, take into consideration the return profit potential that the system is able to produce. Average session costs vary from $3 to $12 for low-pressure tanning.

Generally, equipment with a longer recommended exposure time such as a tanning bed would have a higher cost factor when establishing a pricing schedule. Therefore, the shorter the recommended exposure time, the easier it is to establish more competitive pricing and the greater the profit return. Based on a 15-minute session time at $5 a session, it would take 1,200 sessions to recoup a $6,000 investment. Realistically, this could be accomplished easily in less than two months, providing your service is promoted properly.

Place

Once the manufacturer decides what to produce and how much to charge for it, he has to get it to the place where a potential customer will buy it. Among the considerations for product placement are the following issues.

· Where will customers shop for the product?

· What is the best perceived location?

· Does location affect the quality appeal of the product?

· Will consumers know to look for it here?

· Are there other locations that are overlooked that could be suitable locations for the product?

Whatever location or locations a manufacturer chooses, the main point about a place is the consumer's expectations. In the past, consumers have bought products like the ones they've bought before, by looking for the product in the locale where new and old products are grouped according to category.

The process of placing the tanning service is a difficult one because the salon owner must select a location that will draw in the most tanning customers. Attractive display shelves and point-of-purchase displays within the salon warn the consumer that this is an opportunity to purchase. One way the manufacturer places his goods is with a wholesaler who in turn distributes them to locations where they will get the best attention.

Convenience is very important in our society, and unless a product or service is important to people, they won't go out of their way to purchase it. Therefore, having decided on your primary audience and what will appeal to them, you must find a way to offer it in a location that is convenient to them. That may mean that it is near their home, their work or other places they frequent.

It is also important that the location mesh with the other facets of the marketing plan. If rent is prohibitively high and will push the cost of offering the service beyond your target audience's reach, the convenience of the location is irrelevant. Or, if the salon is in a seedy part of the downtown district, and your target audience is young female professionals, it doesn't matter if it is close to their work or if the rent is low.

The particular requirements of the services that you offer also must be considered in choosing a location. At the very least, minimum space requirements must be met. If you anticipate a bright future, you should make sure there is room for expansion.

If your service is unique or is perceived to be more desirable than that of your competition, you may be able to get away with operating in a less convenient location that accommodates those features that make your services distinct. As long as your potential customers know about you and will go out of their way for what you have to offer, the location may not be a major handicap.

In choosing your location, keep in mind the overall image you want your salon to portray. If you're aiming for an upscale, elegant salon, you're going to have to locate in similar surroundings. Its decorating style also will have to be correspondingly tasteful. Even with an existing salon, you must be aware of how the location is working to sell your product. In any service industry, it is imperative that the space be clean and attractive and promote the type of atmosphere you want your salon to convey.

Promotion

The act of promotion is creating an interest in your product by a variety of methods. Many excellent products languish because they lack the proper promotion. They never capture the public's attention, and therefore, never reach a broad market. Specific means of promotion include:

· advertising

· packaging

· branding

· personal selling

· sales manuals

· dealer cooperation (displays/rebates, etc.)

· coupons/premiums

Most salons have small budgets for advertising, if they have any budget at all. It makes sense then to try to ensure that those few dollars are spent as wisely as possible.

Before you pick up the phone to call the local newspaper and arrange for an ad, stop and think. Do the customers you want to attract read the paper? In what section will an ad reach them in the right frame of mind? What should the ad say to get their attention and then make them want to come into your salon? Is a local radio station a favorite of the desired audience? Might fliers distributed at a local mall work as well? Can you get hold of a mailing list specific enough to make direct mail pay off?

After you choose and run an ad, make sure the dollars were well spent. Get in the habit of asking new customers where they heard about you and keep track of their responses. You'll begin to see patterns indicating the effectiveness of different promotional efforts. Keep those patterns in mind in future advertising decisions and you will see results without wasting advertising money.

A fifth "P" inherent in making decisions about each of the other four is People. Meaningful marketing decisions always must take the desired customer into account.

The four Ps, then, are the basis of any effective marketing scheme. The effective and efficient interrelation of them may not guarantee success, but it goes a long way in that direction.