Building Business In A Recession

Everyone is looking for more foot traffic for their salons, but how do you achieve this? Let’s take a rational look, and how you can use the information to your benefit.

Imagine a funnel; the top is vast and gradually gets smaller. Outside your funnel is all the people that don’t use your services and never will, along with those that are loyal to another business. Don’t waste resources on them as they are not your target.

At the top of your funnel, you have people that would visit your salon for any reason; those that have never done business with you (or maybe anyone) but have an interest. A wide funnel would include additional services or products other than tanning related. The more you have to offer, the bigger net you cast for overall visits to your business.

The next level is customers that use the services you provide already, be it from you or from a competitor, but are not loyal to any business. They look for deals or convenience.

At the bottom of the funnel are your loyal customers who use you exclusively. This is the level that will likely decline first during a recession. They still come in, but they are spending less now. You might be tempted to target these customers for increasing sales, after all, you know them. They are loyal. However, in a tight economy, it is highly probable that they are already spending what they can in disposable income with you.

So where do you focus your efforts? Let’s look back at the other levels of your funnel. At the top, you can obviously widen your opportunities by adding additional services, and that could work. But the group you should really focus on is the middle group. They already tan, be it with you or someone else, so they have an increased potential for doing business with you. Here is where you make up for declining sales with your loyalist group.

It's time to fill the need. What is it that these customers are looking for? It’s time to think outside the box and figure out what these customers are craving so that you can get them to spend their money with you.

Example: Starbucks started with the idea of being the elite place to get coffee. You went for the “coffee house” experience. This branding did wonders for them as consumers everywhere rushed to buy overpriced coffee for the FEELING of being a coffee connoisseur. Starbucks learned however that to continue growing it needed to appeal to a wider audience. Not everyone had time to come in and get coffee every day, so they started offering drive-thru service. Now customers who would have gone elsewhere were enticed to switch. Their “loyal” original customers can still come in and enjoy spending time sipping their drinks, but now Starbuck has increased their customer base.

How can you apply this to your business? We bet that your webpage or social media focuses on your equipment, but do you feature the products you sell? How convenient is it to do business with you? Can customers book online? Take a tour of your salon virtually? What could you do to capture some of this additional business?

When business slows, it is tempting to start restricting your inventory to only what sells. However, what is selling is based largely on your loyal customers. One size doesn’t fit all.  Another way to target this middle funnel group is by expanding your “accessory” selection, which differentiates you from other salons. Offering niche items tempt customers to make impulse buys. Studies have shown that offering items that complement main purchases increase sales.

Now that you know where to focus your energy, what will you do?