Prices go up....on everything.

[mule14]

Most salon owners are of the opinion "if you can't beat em join em". Thats the talk of a salon owner who thinks that free tanning is a marketing concept.

Get original, put some value in your products, develop some competitive advantages, know your target market. In our situation our target market is not 10% of the population, Its more like 2%, the 2% that are willing to spend 5 times more than the 8% that want to buy lotion on the net and get cheap ass sessions.

Salesmanship, points of difference, build an experience in everything you do, build value... than add more value when you add more $$$ to your prices.

Start by putting the prices of your lotion packets up by at least $2-$5 each, than get rid of all your lotions priced between $15 and $45 a bottle.

[SunMan49]

Everyday I drive pass a major franchise. I swear for the last year the same banner has been hanging in the breeze: "Tan for $19.95 a month"
Consumers see that everyday, and though may not tan there, they sure expect it where they do!
Salon owners, (some) are victims of their own choke hold

[sunsally]

To me this is pretty simple - prices are a function of supply and demand.

We demand oil, prices go up, we still demand - prices stay high.

In tanning - demand is DOWN! More and more people are saying "we aren't interested, or not as much as we used to be".

That doesn't mean you can raise prices on the ones that remain. It means either try to stimulate demand (get more customers interested, through Vitamin D campaigns or other) OR, have the "supply" of tanning providers reduced (fewer salons to service the decreased number of tanners).

EFT's were originally done in an attempt to stimulate demand. On a salon-by-salon basis - this still works. If my prices are lower than yours, all things equal - I will see more volume than you.

But overall, the negative press about tanning has had a greater impact on demand than the lowering of prices.

If you don't PERSONALLY make an effort to stimulate demand through education of your current salon customers and potential customers - it won't matter what prices you offer.

[EliteMike]

With your theory Ann, tanning should be free and maybe we should even be paying people to tan. I've learned that everything I learned in business school and my time in retail doesn't really apply to this industry. WHY you ask. Because there aren't enough people practicing normal business tactics that will make money. Salon owners destroyed this industry, not any other factor.

[Kathe]

Originally Posted by SunMan49

Everyday I drive pass a major franchise. I swear for the last year the same banner has been hanging in the breeze: "Tan for $19.95 a month"
Consumers see that everyday, and though may not tan there, they sure expect it where they do!
Salon owners, (some) are victims of their own choke hold

I have had that same sign hanging in my window for almost 15 years. That is my base EFT price and it gets people in the door. The key to the entire marketing campaign is that once you have them in the door you must educate them on equipment, vitamin D, good lotions, other services offered, etc. A store tour is a must.

You and your staff are the key to success in this business. Turning that $19.99 monthly into $50 - $100 is critical. Daily upgrades and lotion sales will do it nicely even without anything else.

Let's say I have a customer on my $19.99 EFT. They tan twice weekly and upgrade $5 each time plus buy a packet of $6 lotion each time. They have actually spent $107.99 that month. The $19.99 is just the marketing to get them in the door. What you do with them at that point makes or breaks you.

[solman]

Originally Posted by Kathe

Let's say I have a customer on my $19.99 EFT. They tan twice weekly and upgrade $5 each time plus buy a packet of $6 lotion each time. They have actually spent $107.99 that month. The $19.99 is just the marketing to get them in the door. What you do with them at that point makes or breaks you.

I've seen this scenario, or versions of it, discussed on here several times. I have a very thorough knowledge of retail upselling, add-ons as well as "loss leader" type marketing/advertising. It works very well for many types of business. The problem I have is believing that many people who purchase a $20 tanning package and get to the end of the month with a $108 tanning package don't go berserk. I know I would. I don't think many of my customers would even get through the first week of being up-sold to the tune of $22 without going..."wait a minute, something about this isn't right". Maybe do it to me once, but you'd definitely not do it to me twice. For those of you who have this type of deal, do people really go for it repeatedly? Is this a typical eft customer or is it the exception? I know I'd get tired of being "sold" everytime I walked in the door.

[Kathe]

Well, first of all most of them pay cash for their day to day session upgrades and lotion packets. So the only hit on the credit card at the end of the month is $19.99. And I don't think people typicallly keep track of their cash spending.

As for pushing the sale, we just simply ask, do you want to upgrade today and do you need lotion. They can say yes or no.

Upselling is really the key. You don't have to be pushy, just matter of fact. Do you or don't you?

I have a lady who has been on a $19.99 EFT for almost 12 years. She pays $8 to upgrade to the Orbit on every visit, at least twice a week. We have asked her repeatedly if she would just like to upgrade her package and save money and she says no, she likes it this way. I really think that she doesn't share with her hubby how much she is spending as he only sees $19.99 on the cc statement each month. And I think there are a lot of them like that, especially these days.

It's not my business how they manage their money, I just give them their options and I'm happy whatever they choose.

[solman]

Originally Posted by EliteMike

With your theory Ann, tanning should be free and maybe we should even be paying people to tan. I've learned that everything I learned in business school and my time in retail doesn't really apply to this industry. WHY you ask. Because there aren't enough people practicing normal business tactics that will make money. Salon owners destroyed this industry, not any other factor.

IMHO it's more serious than even that. Desperation is what is destroying the industry. We're living down to our own expectations. It's the mind-set that's reflected throughout this and other forums. Use low-cost or no-cost (free tan day-week-month-lifetime) to attract the same people who are going to the salon 2 blocks away. You can preach "making a difference one person at a time in your salon" all day long. In the end it will not make a difference how much I educate my customers, upsell my customers, or dazzle them with my upscale salon if everywhere they turn are repeated messages that tanning should be free or at least cheap. That's the opinion of the vast majority of the general public. That, and the fact that tanning is bad for you. That get that repeated message all the time too.

Yes it is up to me and my staff to make the most of every opportunity with each and every customer. Thanks to the prevailing mind-set that's the only way to survive. What is so sad is the fact that it's been done this way for so long now, the very people (veterans with 5+ years experience, multi-location chains, and large franchise chains) who could lead the industry forward choose to defend these practices as the best available.

As for this "newbie" coming up on my one-year anniversary in the biz, I sincerely hope to see a revolution in the industry. Good Lord willing I'll never see the day when I have to hang out the $19.95 a month or Free Tan Weekend banner.

[EliteMike]

Way To Be Solman

[enuf]

I feel the same way solman. Not every veteran is lowering their prices. I've been in business since 1990. Its like starting all over again. I will not lower my prices I would love to see an upsweep in our industry.

[JeffK]

On the surface there doesn't appear to be anything wrong with "I have a tanning salon now so my wife has something to do".. I mean how many times have we all read that statement on this forum?

A tanning salon has such a low over-head when you have no staff that it appears to be a safe business for people who aren't business-people to enter.. and that creates a competition that most people cannot handle... so then what you have is a group of people who need to protect the investments they made.. so they lower prices to atleast break even and they just figure they'll figure out the whole "profit" thing later..

And besides, if they're doing this poorly then The Salon Down The Street must be too.. so as long as they survive long enough then The Salon Down The Street will go out of business anyway so THEN the real money will roll straight into their pockets where it belongs.....

But instead of The Salon Down The Street showing up at your salon admitting you've defeated them, apologizing profusely for thinking they could compete with the likes of YOU, and telling you they will now shut down to clear the way for you to receive your rightly earned riches ... you instead get Guy Who Got Fooled Into A Franchise opening up a quarter of a mile away, and then the game gets even harder for everyone..

Guess what. It's a low-overhead, high markup business, and therefore there will always be plenty of competition.. you need to compete through better service and marketing.. and guess what else, your service becomes a large part of your marketing.. keep your lamps as up to date as you can, and make SURE your team are well trained and well treated - so that they in turn treat your clients with the respect they very much deserve..

[solman]

Originally Posted by JeffK

Guess what. It's a low-overhead, high markup business, and therefore there will always be plenty of competition.. you need to compete through better service and marketing.. and guess what else, your service becomes a large part of your marketing.. keep your lamps as up to date as you can, and make SURE your team are well trained and well treated - so that they in turn treat your clients with the respect they very much deserve..

No argument with the above paragraph but not so much with the other stuff. Don't know how many folks really expect(ed) the competition to roll-over and play dead just because they opened up a salon. I guess there are a few who believe in the gold at the end of the rainbow. Most are probably like me and my wife. We went into this knowing that it was going to take a lot of money, time, and effort to reach our goals. Both of us have extensive backgrounds in retail, marketing, and advertising. We did it because we genuinely believe we are providing a service that people need. That's all the more reason that I rant so much about the "low-price marketing" that is supported by so many in the industry.

My biggest concern is that when someone researches this industry they typically will do it like many of us did. They will check out the local tanning salon(s), google "tanning salon" and often end up here or one of the other forums, get a couple distributor names (maybe even from the yellow pages) and then start asking "How do you do this?". Between the forums, distributors, and "consultants" they will hear the common theme....be sure to have a Free Tan weekend/week/month and be sure to EFT your base bed(s) real cheap if they want to be successful. The primary gauge for success...shutting down the competition. It's even reflected in the preceeding post. The distributors preach it because they don't really care about anything but selling beds, lamps, and lotions. The more people you have tanning, at whatever cost, makes them money. More tanners equals more lamp and equipment wear and tear. More customers means more lotion sales. Since everyone and their grandmother can get it off the internet at the same price as us you really can't make much profit, but hey, that's just free market enterprise at work...right. Nothing can be done about it...right. So now we can't make a profit on the tanning because we've trained the public it's not worth paying for. We can't make money on lotion because everyone can buy it at the same price as us and that's okay too. If anyone ever developes a good at-home self tanner I'll definitely have to sell-out.

Like I said I'll wage my own little war against the machine and hopefully in a few short years bosswife and I can realize our goal, sell-out to some idiot, and tan for $20 month for the rest of our lives.

[sunsally]

Originally Posted by JeffK

On the surface there doesn't appear to be anything wrong with "I have a tanning salon now so my wife has something to do".. I mean how many times have we all read that statement on this forum?

A tanning salon has such a low over-head when you have no staff that it appears to be a safe business for people who aren't business-people to enter.. and that creates a competition that most people cannot handle... so then what you have is a group of people who need to protect the investments they made.. so they lower prices to atleast break even and they just figure they'll figure out the whole "profit" thing later..

And besides, if they're doing this poorly then The Salon Down The Street must be too.. so as long as they survive long enough then The Salon Down The Street will go out of business anyway so THEN the real money will roll straight into their pockets where it belongs.....

But instead of The Salon Down The Street showing up at your salon admitting you've defeated them, apologizing profusely for thinking they could compete with the likes of YOU, and telling you they will now shut down to clear the way for you to receive your rightly earned riches ... you instead get Guy Who Got Fooled Into A Franchise opening up a quarter of a mile away, and then the game gets even harder for everyone..

Guess what. It's a low-overhead, high markup business, and therefore there will always be plenty of competition.. you need to compete through better service and marketing.. and guess what else, your service becomes a large part of your marketing.. keep your lamps as up to date as you can, and make SURE your team are well trained and well treated - so that they in turn treat your clients with the respect they very much deserve..

Ok - seriously JeffK. I know I've asked before. But if you don't want to marry me, do you want to at least get together and fool around a little?

There isn't even a comma with which I can take exception. You have nailed it perfectly.


The truth is - not that many people "salon hop", and not based on pricing. If you get them in - and do everything right - they aren't even paying attention to the other offers floated their way. But if you AREN'T doing everything right - or your competition isn't - this opens up opportunities.

I'm 4.5 years in and opening a second. I've consulted with hundreds of salons over the last 5+ years. EFT's and FTW's do not "devalue the industry" and are not desparation moves. But you have to have the rest of the package to make it work - including the right cost structure, business acumen, demographics, location, etc.

[solman]

You guys get a room.... No seriously, get a room.

[mgj]

Do not knock the FREE TAN WEEKEND (FTW) concept until you try it. It usually results in very high sales for that weekend, and drives a ton of people to your salon. A friend of mine does them 3-4 times per year and averages 5-8k per event, I just did one and we did OK still 3-4 times average weekend. Wrong time of year. Now if you do not want to spike your sales then by all means keep typing and complaining.

[solman]

Originally Posted by mgj

Now if you do not want to spike your sales then by all means keep typing and complaining.

Are you kidding? Typing and complaining are two of my favorite things.

I'm sure that FTW's would "spike my sales". I'm not saying free tan weekends/weeks/months don't bring in lots of people (they better!). I'm asking you to consider the possibility that they are a short-term, short-sided marketing strategy that has long-term adverse effects on our industries' pricing. I don't care if you've been in this business for one week or ten years, we all see customers everyday that expect at the very least to get their first tan (if not an entire month) free. Where did this expectation come from?

This thread was started to discuss why it's so difficult to get prices on tanning to follow other products/services in an upward trend. I'm suggesting that some of the traditional practices supported by so many might be having an adverse effect on the perceived value of tanning. If you currently use free tanning offers in your marketing it could be very difficult to stop, especially if you do 3 or 4 annually. I'm hopeful I'll never find it necessary.

[JeffK]

Originally Posted by sunsally

Ok - seriously JeffK. I know I've asked before. But if you don't want to marry me, do you want to at least get together and fool around a little?

Well I don't think my wife would be too keen on that.. after-all, the only reason I come to this forum is because I bought her a tanning salon so she'd have something to do...

(just kidding. she hasn't worked a shift there in months)

The truth is - not that many people "salon hop", and not based on pricing. If you get them in - and do everything right - they aren't even paying attention to the other offers floated their way. But if you AREN'T doing everything right - or your competition isn't - this opens up opportunities.

It takes a certain level of comfort to be able to take off your clothes in a business establishment.. people can laugh if they want, but it's true.. think about it.. I'm not saying people will never switch, but a tanning salon is not as interchangable as Burger King/McDonalds....

Basically, as you said, if you're running your business properly then people won't switch even if it saves them $10 or $20.

I'm 4.5 years in and opening a second. I've consulted with hundreds of salons over the last 5+ years. EFT's and FTW's do not "devalue the industry" and are not desparation moves. But you have to have the rest of the package to make it work - including the right cost structure, business acumen, demographics, location, etc.

Not to repeat myself from another thread, but I did a Free Tan Day at the end of May and it was my #1 sales day ever.. not to mention it filled up people's packages so they kept tanning in June, and most importantly it built up good will to my clients.. yes it's business, but once in a blue moon it's ok to show them that you're not all about take-take-take-take-take from your customers.. giving back once in awhile makes them feel better, makes YOU feel better, and as I said -- it builds loyalty/good will..

[Kathe]

I'm surrounded by salons that have monthly tanning for $20 or less. By putting a sign in my window it at least grabs attention and gets those people in my door. Then it's up to me to educate them on better equipment and the great salon we have in so many areas. I don't see that in any way it devalues the industry. In fact, by getting them in my door I am helping to give value to it by showing the customer a better way to tan and that they don't have to settle for less. And that the amount of money they spend directly relates to the service and results they get.

That was my intent from the beginning and it worked. With the exception of one new salon all of the others in a 5 mile radius have changed owners several times in the last 12 years since I've been here. We are the only constant in this area and have a loyal clientele because of it. And our sales are up 28% so far this year, in Michigan of all places, in the worst economy this state has seen since the early 80's.

I'm planning a FTW in early Feb before mid-winter break. Again I don't think that devalues our industry at all. It brings people into a great salon to see what it's like to tan in equipment that is superior to what they are used to. It's all part of the education process.

[EliteMike]

I don't think this topic was ever about free tan weekends but rather the people selling dirt cheap tanning all year round. To stay on topic, Those EFTs probably should have been increased to help bridge the gap.

[sunsally]

Prices are going DOWN at Starbucks...........

This from CNN on-line this morning:

NEW YORK (AP) -- Looking to bring more value-seeking consumers through its doors for a late afternoon caffeine fix, Starbucks Corp. said it will now offer its morning customers any iced grande beverage for $2 after 2 p.m.
To get the discount, customers must present a receipt from their morning Starbucks visit.





The price is a big cut from the normal price of most grande-sized iced drinks. A grande iced latte, for example, costs about $4. To get the discount, customers must present a receipt from their morning Starbucks visit.
The promotion was previously only offered in Seattle, Chicago and Miami. The company said it is taking it nationwide beginning Tuesday to answer consumers' calls for more value at the chain, which has seen traffic drop as gas prices rise and consumer spending falters. It runs until Sept. 2.




Why? To build volume and loyalty. To get the $2 off in the afternoon - you have to first buy a coffee in the morning. So they are betting that they will build more volume to offer both bundled at a discounted price than they were getting selling each at full price alone.

Not dissimilar to salons that offer EFT - and then give those membership customers discounted upgrade or lotion purchases.