Our Key Takeaways from the Data-Driven Salon Summit in Nashville
After hanging out with over 400 of America’s top salon and day spa owners in Nashville the last several days, we’ve assembled our 5 biggest takeaways from the Data-Driven Salon Summit.
We will be addressing these in more detail during our “Lunch & Learn” on-line workshop Wednesday, June 8th,2022 at Noon CDT.
#1: Some Key Beauty, Fashion, & Economic Trends are Actually Working Against the Industry
Over the last 6 months, most salons report customer counts and revenue up. But several key beauty, fashion, and economic trends are working against us and we don’t even realize it.
“Trendy services like balayage and “lived-in” looks are actually reducing average visits per year from 7 down to only 5″ – john palmieri
John Palmieri from Salon 124 Group shared some great statistics, along with his co-presenter Jen LeBlanc from Salon Rootz Inc and Endz Salon Studios. Some key ideas they shared:
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- Trendy services like Balayage and “Lived-In” Looks Reduce Average Annual Visits from 7 to 5 — because they last longer
- Customer counts are up and revenue are up, but those numbers are hiding a retention problem because:
- Most salons have increased prices at least once, some as much as 3 times in the last year
- That hides lower retention and dropping average visits per year stats
- Inflation is moving us in a direction where customers may be forced to decide if hair styling is a luxury or a necessity
- 83% of customers want to book on-line and we’re not making that easy enough as an industry
- Pre-pandemic retention rates were 30-32%, now only 20%
Need help calculating these statistics for your own salon? We can help.
#2: Social Media Backlash is Real
A repeating theme throughout the Summit was criticism of the singular focus on social media, particularly Instagram, and how that is creating long-term damage for salon brands.
In fact, Jen LeBlanc compared what’s happening with social media now to the damaging effects of Groupon offers a decade ago.
“we think social media is causing a lot of stylist hopping as customers chase the look of the moment, the stylist of the moment” – jen leblanc
This reinforces warnings we’ve been sharing with clients for a long time now. We believe social media is a core element within the digital footprint of your business, but it can’t be the sole focus of your marketing.
Because salon and spa services tend to be highly referral-driven, it is critical that you focus on a healthy digital footprint that makes you easily findable. That reinforces your reputation with social media and on-line reviews, and funneling curious prospects into conversion behaviors like calling, booking on-line, or buying a gift card.
“68% of salon customers choose based on referral” – phorest salon software survey
A parallel survey showed that 57.3% of customers were influenced to do business at a salon by friends and other references they trust. How does this inform marketing strategy? We will be sharing a lot more about this topic during our live webinar Wednesday, June 8th, 2022 at Noon CDT.
#3: Business Health is Pivoting on Staffing
Many of the speakers agreed that during lockdown and the ensuing “lockouts” of salons, customers gained a greater appreciation for the value provided by a professional stylist.
The result is booming demand for salon and spa services. But most salon and spa owners are quickly figuring out that access to staffing to fulfill the demand is a huge limiting factor.
Frank Gambuzza of Salon Visage and Gambuzza’s Barbershops gave one of the best keynotes of the entire Summit, Pivot or Plummet, in which he talked about his own experiences as a 60-something working with 20-somethings.
“I hug them the most when they deserve it the least” – frank gambuzza
The tail is wagging the dog when it comes to staffing a salon and spa right now:
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- Staff who typically worked 35-45 hours a week pre-COVID now only want to work 25-30 hours a week
- Students coming out of schools are more concerned with Instagram following than earning potential
- We need them more than they need us right now
Creating a more flexible, supportive work environment is key right now. And several different examples of this were shared by experts at the Summit.
We took particular note of the simplicity of a system offered by Erin Bruce from DreamDry. During one-on-one reviews with staff members, where she lays out 3 points:
Stop. List of behaviors we’re going to stop doing.
Start. List of behaviors we’re going to start doing.
Continue. List of behaviors we want to positively reinforce and keep doing.
Attracting, motivating, and compensating staff were all hot topics at the Summit. We’re available to discuss this in greater detail at no cost to you.
One last idea related to staff; cross-selling and upselling other services was a hot topic at the Summit. And one of the best practices shared was this: you can’t ask staff to upsell or cross-sell services they haven’t tried themselves. Staff need to experience services in order to effectively recommend and sell them.
#4: Data is the Most Under-Utilized Asset in the Industry
Today’s salon and spa management systems are generating a LOT of useful data that isn’t being looked at, so key opportunities to make good management decisions are often missed.
You can’t manage what you’re not measuring. The sad thing is, most salons ARE measuring; they’re just not ever looking at the measurements…
“less than 20% of salons are looking at the data the reservation/pos system is generating — so key opportunities to improve employee and customer retention, and overall profitability are missed.” – steven ludwig
In the digital marketing breakout session, over 100 attendees were asked if they knew the traffic their websites received last month. Only 2 people raised their hands.
Salon and spa owners clearly have a desire to improve in this area. The breakout session was at capacity, with people standing all the way out into the hall. Voracious attendees took photos of the slides and seemed happy to see actionable information.
Perhaps the disparity between desire and action is due to apprehension. We exist to help people overcome apprehension and take effective action.
We’ve warned for years that the unhealthy obsession with only Instagram has left salons and day spas with “findability” gaps on-line. Key, more accountable marketing assets like Google My Business, and website get ignored and the business’ ability to really convert interested prospects into customers declines.
#5: Beauty as a Service (BAAS) is a Growing Concept
The final takeaway from the data-driven salon summit is the success of membership business models like Costco and Amazon Prime have caused virtually every industry to take a serious look and try to re-imagine itself as a subscription service.
The most common example of this is Software as a Service, or SAAS. The Summit explored the possibilities of Beauty as a Service, or BAAS. Can it work?
One of the most intriguing ideas offered up (amongst many) at the Summit was a limited-access membership program that’s the brainchild of India Bertin of Hi Texture Salons. India detailed a program that is limited to 25 members per salon at any given time. Each member pays a monthly fee (for a minimum of 6 months) and receives for that flat-rate membership a series of services each month.
Between membership models like India’s and subscriptions for everything from hair care products to massage, salon and spa owners are definitely trending in the direction of testing ideas like this to grow revenue and profit.
As part of survey results presented by Rich Cullen and Verna Wall from Phorest Salon Software, quoted earlier we also got this tidbit:
“58% of customers who don’t buy product during a visit wanted to” – phorest salon software survey
In fact, Cullen and Wall reported that a growing number of customers are showing interest in being able to subscribe to products for automatic replenishment, even to the point where they have a product development team working to make that option available to their salon customers.
So Many Takeaways, So Little Time
We could share takeaways all day. In fact, we’re developing a one-hour “Lunch & Learn” on-line workshop Wednesday, June 8th at Noon CDT where you can learn more about our takeaways from the Data-Driven Salon Summit and how those connect back to our unique approach to growth hacking salons and day spas.
Read a case study about growth hacking a salon and day spa here.
Got a question. Just ask.
