Posted : 04/01/2001

Posted : 04/01/2001

Looking For Additional Profit Avenues?
Consider The World Of Add-On Services

by Karen Butler

Running an indoor tanning salon can be exhausting. Many salon owners struggle to keep up with their growing client base, let alone having the extra energy needed to market any other products or services.

Realistically, today's consumer has come to expect more from the business world. Even supermarkets are expanding to meet customers' needs--offering everything from paint and cameras to furniture and fishing rods--in addition to the usual groceries. The tanning industry itself has seen countless successful expansion endeavors, pairing tanning with the likes of video rental, beauty services and laundromats, just to name a few.

If you're looking for an opportunity to increase both your revenue and your clientele, ancillary services may be the answer. Rest assured that if you don't take advantage of the chance to cater to your clients' needs, a salon down the street will. Regardless of the positive relationships you've established with your clients, they would sooner visit one salon that fulfills all their needs than spend the time tanning at your place and then going elsewhere for related services.

Jessica Daffer, USA Sales Manager for Sybaritic, Inc., explains the goal of any tanning salon should be to stand out in a crowded marketplace by offering a unique experience. She suggests owners consider the amount of revenue they can make simply by expanding service to their existing clientele, let alone any new customers they might gain.

"By offering a 15-minute pre-tanning skin exfoliation package, you can bump up your normal tanning price by $15," she says.

While many owners are wary of the prospect of giving up all the space--and potential revenue--of a tanning room, they should keep in mind the new avenues for profit that diversification can provide. Specifically, some of today's hottest ancillary services are designed to expand the client base to include non-tanners.

According to Troy Cooper, president and C.E.O. of Mystic Tan, Inc., "About 70-percent of the revenue from Mystic Tan comes from customers who never would have gone into a tanning salon in the first place."

Giving these customers an alternative to UV tanning--and a reason to come into the salon--results in new business and referrals for all your services and products.

The Starting Lineup

Ancillary services are a natural fit with tanning customers and health-conscious individuals who are willing to spend money to enhance their well-being. Mystic Tan, Sybaritic's Alpha 2010 Spa System, and dry body water massage systems from PowerWave and HydroMassage share some basic commonalties as add-ons. No additional licensing is needed for these services, although all require minimal employee training--from 15 minutes to a couple of hours--offered for free by each company.

The vendors provide educational and promotional materials for staff and customers, emphasizing education as a vital part of attaining success. Just as an employee spends 10 to 15 minutes with a new tanning client to explain procedures and make sure the customer understands how to operate the machinery, staff members will need to do the same with these add-on services.

As far as sales, this equipment is a natural fit with tanning. Salons are used to selling time on equipment, performing minor cleaning and interacting with customers.

In terms of setup, ideally each service should have its own 7-foot by 9-foot room. Slightly smaller rooms can be used, but the door must allow for entry of the equipment. The Alpha 2010 and PowerWave require a 220-volt 30-amp dedicated circuit while the others require a standard electrical outlet. Despite the use of water, no additional plumbing is needed.

Mystic Tan's drainage system does require a laundry hook-up, but it can be shared with the salon's normal laundry system and the distributor is responsible for the entire setup.

Like tanning, services can be sold in multiple-use packages that pull in higher revenue up-front, as opposed to more expensive single-visit sales. Unlike tanning, the services are not seasonal; therefore, offering a year-round draw to even out a salon's slower times. Best of all, a wider client base can use the equipment because it can be used by clients aged 8 to 88, and the possible risks involved with tanning--such as overexposure and photosensitive interactions--are not a factor, says the company.

Nobody knows this better than the makers of the Mystic Tan tanning booth. Individuals who can't or don't want to tan conventionally simply enter the booth, where a fine mist of Mystic Tan solution--composed primarily of bronzer, DHA (the simple molecule used in food and cosmetics that creates the longer-term tanning effect) and aloe vera--evenly coats their entire bodies. The operating cycle takes less than 1 minute, and skin color can be maintained optimally with return visits every four to five days.

Pricing varies between markets, but typically averages $25 for a single visit, dropping down to $13 a session with a package purchase of 10 visits.

The appeal of Mystic Tan is twofold. Since its manufacturers are restricting distribution to one unit per every 50,000 potential customers, those salons that have the equipment will be offering a fairly exclusive service. Additionally, the draw of a natural and effective tanning process is incomparable in today's marketplace--where countless consumers are concerned with their appearance, yet skeptical of conventional tanning equipment.

Brad Salley, owner of two Super Tan salons featuring Mystic Tan in Lubbock, Texas, cannot say enough about the benefits--from the instant leverage of becoming a cutting-edge salon to the big picture in terms of revenue. He marvels at salon owners who won't consider adding anything other than a high-pressure unit.

With 18 tanning rooms and one Mystic Tan room, Salley says it's not unusual to have the Mystic Tan room make as much money as the other 18 rooms combined.

"We've all got tanning units," he says. "But when you get a Mystic Tan, suddenly you provide services everyone can use."

Sybaritic's Alpha 2010 Spa System is another choice to reach customers wanting cosmetic and physical results. With 10 years of experience in the market, this multi-purpose horizontal capsule offers a range of services--from basic sauna, massage and aromatherapy, requiring minimal employee involvement, to more-involved services such as body wraps, facials and mud body masks, requiring highly-trained staff.

The unit is an ergonomic contour bed with a pull-down lid, featuring a dry heat sauna, adjustable massage vibration, soothing back and thigh heat, an aromatherapy option, stereo and a face-cooling air system. An average session lasts 30 minutes, and can cost from $30 for the basic use of the machine up to $80 if combined with a body wrap or massage treatment.

One of the benefits of this system is that current customers may use it regularly along with their tanning visits--either for the separate benefits or the combined effect of raising body temperature before a tanning session. In addition, it is the perfect choice for salons seeking an immediate draw with the potential for expanding into related services down the road.

Tom and La Donna Pharris, owners of The Hot Spot Tanning Resort in Abilene, Texas, put in an Alpha 2010 last August and say the unit already has paid for itself without them even pushing for sales. Despite the popularity of the machine, the two haven't had as much time as they'd like to devote to it because their tanning business is still so busy. Additionally, they feel that properly operating the unit requires heavy training--training that can't be taught to employees haphazardly.

Besides being a good draw for business, Tom boasts that the machine simply makes a good peacekeeper. "If somebody's tanning session runs long, and a customer is kept waiting, we'll just throw them in the Alpha for a few minutes to pass the time," he says. "When they come out, they very rarely remember they had been upset."

Another add-on service gaining popularity is the aqua-massage system. Customers should be given a head-rest towel and need only remove their shoes. They lay down in the lined unit and relax as warm, pressured jets of water spray along their fully-clothed bodies. Two of the main companies targeting the tanning market are PowerWave by Branded Business Concepts and HydroMassage by VentureQuests.

PowerWave's history dates back more than 10 years, as the equipment first was marketed medically to aid patients with ailments such as arthritis, fibromyalgia and back pain. The unit features a user-operated electronic control system that facilitates changing the pressure, speed, temperature and targeted areas of the entire body.

Customer cost varies depending on each salon's location and volume of clients--PowerWave offers free customized pricing suggestions after researching your demographics. An ideal sale is an eight-week package of two 30-minute sessions per week. In a small town this could break down to about $6.20 per visit, whereas an upscale Beverly Hills salon might charge twice that amount. A 15-minute visit can be offered, but more common is a single 30-minute visit, which begins around $15.

HydroMassage's unit has been on the market just over one year. Users can adjust the intensity of the water's flow, which has partial-body access ranging from the top of the head to the bottom of the hips.

A standard 20-minute session averages $15; $8 will buy a 10-minute treatment, and a bundled package of 120 minutes goes for $60. Since the unit typically operates on a debit-card deduction system, customers can determine the length of their sessions as they use up a package.

Both water systems cater to customers who want the pampering but might have biases against traditional massage. These can include not wanting to invest the time or money or not wanting to disrobe or be touched.

For the salon, purchasing a machine for body therapy is a way to avoid the complexities of hiring on a masseuse. The cost of added labor--for the salon and the customer--can be avoided, as well as the hassles of scheduling and monitoring another employee.

Hook, Line & Sinker

One of the most encouraging arguments to expand the services you provide is the fact that several thriving companies offer their equipment virtually at no cost to the salon owner. Of course there's no free lunch, so owners shouldn't be surprised to be splitting profits--either evenly or disproportionately--with the distributors.

Of the products discussed, Mystic Tan only is available through a profit-sharing program. This entails that interested salons pass an application process evaluating both their quality of service and profit potential. Once approved, a salon owner may see just 30-percent to 50-percent of the profits the equipment generates in the salon, with the remaining percentage going to the manufacturer and distributor. Even then, if the salon does not generate enough revenue from the equipment, it may find the agreement terminated.

Measures to ensure exclusivity don't mean a service is a poor moneymaker. In fact, Mystic Tan's Troy Cooper points out salon owners hardly can dispute profitability considering they get the use of a $50,000 booth with exclusive MagneTan technology for no more than the cost of the additional phone line to run the computer.

Salon owners will pay anywhere from $8,995 to $12,995 for the technology of the Alpha 2010, depending on which features they select. Additional training can be had for a price as well. Videos and instructional manuals are included with every purchase, but a day at the company's institute in Minnesota runs $145, while attending one of its two-day workshops across the nation is $195. For $1,000, a representative will come directly to your salon for one-on-one instruction. Several salons in the same region could share the cost and benefits of this option.

About one-third of the PowerWave systems sold directly are purchased through a lease-to-own program with Branded Business Concepts. Another third of the purchasers secure their own financing through a bank, while the remaining third pays cash or credit. The unit comes fully-equipped at $13,000. With an operating cost of approximately 20 cents per 30-minute session, the manufacturer figures a salon could have the equipment paid off by selling two packages a day for two months.

Smaller businesses needn't be scared off by a larger price tag. According to Steve Burnett, president of Branded Business Concepts, his product is very appropriate for the little guy, as almost half of their business comes from small towns or rural areas.

"Percentage-wise, if they can add $1,500 to $2,000 a month in PowerWave profits to their revenue that means a lot more to them than a 40-bed salon adding $3,000," he says.

VentureQuest's HydroMassage retails for $4,995. The one-time disposable debit cards that operate and track a customer's time on the machine cost $195 per 1,000. If desired, the unit can be hooked up to a salon's T-Max system instead.

Mark MacInnis, CEO of VentureQuests, considers his product an excellent value for salons looking to break into the water massage market.

Besides the competition, salons also should consider shipping costs and warranties. Mystic Tan's distributor will handle any set-up charges or major repairs, but the other companies might not. Weighing in at more than 100 pounds each, the other units will have ground shipping charges anywhere from $100 to $400, depending on your salon's location.

The Bottom Line

Add-ons aren't a cure-all. In fact, the old adage, "If it ain't broke, don't fix it" certainly applies. Experts and salon owners say if your tanning business is booming, you needn't consider venturing out at this time. However, if you have an office or storage room that isn't being used to capacity, or a tanning bed that's only pulling in 10 percent to 20 percent of what your others do, changing the room's purpose may be the key to new life in your salon.

Owners also need to keep in mind that an add-on service is not the way to save a failing business, rather to make a good business better. The last thing you need is to invest in a new product when you're not even getting customers in for your main line of business.

Ancillary services that do well for you open the doors to future opportunities. Mystic Tan and Sybaritic specifically designed product lines to accompany their machines, and the competition can't be far behind.

If you are considering an add-on service, take the time to do your own research. Evaluate services your customers might enjoy, as well as closely examining any markets you might not be reaching in your area.

Lori Peltz, owner of Special Effects Tanning in Bonita Springs, Fla., realized the untapped potential of the retired people in her community. For her, a water massage unit provided new outreach opportunities and clients. In addition to placing a large sign in the window, she issued a "Buy 12 minutes, get 12 minutes free" coupon.

"The coupon alone generated more than 200 new customers in one year, a large percentage of whom came back to try tanning after they had used the water massage unit," she says.

Besides advertising, the best success will come from the client's overall experience. Owners may need to change the lighting or paint in a room and should consider providing headphones to block out any sounds the machinery might make. These upgrades don't need to be expensive, just addressed.

If a little extra revenue is something that interests you, try adding a new service to your salon. You might just be surprised to see how many customers--existing and new--get in line.

Think you can't afford to invest the time and money necessary to incorporate ancillary services at your salon? In today's competitive marketplace, the truth is you can't afford not to.