Generating Additional Income for Salons with Product Expansions

Once a salon is able to compile a roster of returning clients, the business is off to a good start. However, many salon owners and hairstylists focus solely on providing services, such as cutting, blow-drying and styling hair, without considering other ways of generating additional income.

A salon is limited to the amount of clients you can service daily, depending on the the number of stylists available and their operating hours. Each stylist can accommodate a certain amount of people in a day, generating a profit based on those numbers. When you add a retail element to your existing services, you bring in additional profit that is not limited to the number of stylists or hours in the day.

There are numerous benefits to introducing a retail element to a salon; according to Cosmetologist Life, retail has a higher profit margin than services offered, and selling a product to an existing client base increases the client retention rate by up to 30 percent!

How can you introduce retail products into a salon?

Use the Products During the Service

The best way to introduce new products to your clients is to use them during their appointment. When your customers have had a chance to test the items for themselves, they will be much more likely to buy them. Make sure to market the product when you use it, getting the customer excited about it.

Explain that you just got a new product that will provide a benefit to them, such as shortening the time it takes to blow dry their hair, making their hair look fuller, helping their hair color last longer, etc.

Give Away Samples

Consider offering small samples that your customers can try at home, and follow up with them the next time they come in to see if the item proved to be effective.

“Sampling continues to rank among the most effective tactics in the history of direct marketing, in part because of its ability to do what no other medium can: put a physical product in customers’ hands,” according to An Post. In fact, this source reports that a United States Postal Service-sponsored study conducted by Opinion Research Corp. found that “61 percent of those polled said that sampling a product is the most effective way to get them to try a brand.”

Offer a Deal

Offering a deal on a product is another way to encourage your customers to buy it. When you lower the price of an item, you provide your clients with a sense of urgency to purchase it since they are aware that if they don’t purchase it now, it will likely go up in price. Deals also create a sense of excitement; a 2012 study conducted by Claremont Graduate University found that coupons actually raise individual’s oxytocin levels, creating happiness and lowering stress levels.

There are various deals you can offer, such as:

  • Buy one, get one free (BOGO)
  • A percentage off (20% off)
  • An amount off ($10 off)

Adding a retail element to your salon by selling products will generate more income for your business. However, you will need to have the funds to purchase the products and organize shelf space to display them in your salon, which may be a financial strain for many salon owners. IOU Financial can help you secure a small business loan in under 24 hours! Contact us today to learn more about investing in your business.

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