CTS Complete Tanning Source
A Unique Service-Oriented Distributor
by Matt Morgan
As its name suggests, CTS will offer salons a complete tanning solution beginning with its official launch in January. Whether it is education in financial matters and top-grade customer service or help with sales-driven profitability and e-strategy, CTS will be a multi-faceted aid for any salon's business needs.
"CTS is more a way of thinking, a way of doing business," says Larry Gaynor, president and CEO of The Nailco Group, CTS' parent company. "We really don't want to do business the way the competition does business, where the exclusive focus is on discounting. We want to take a step forward and focus on the service aspect of the business."
The Nailco Group--through companies such as The Industry Source--has catered to a variety of health and beauty industries, including indoor tanning, since 1990. CTS was created by The Nailco Group to exclusively serve the indoor tanning industry.
A couple years ago, some manufacturers of indoor tanning lotions pulled product availability from beauty salons, and other manufacturers followed suit. The Industry Source created CTS: Complete Tanning Source to change its focus.
"We didn't want to just do another catalog. We didn't want to just be another tanning-distributor company," Gaynor says.
To separate itself from the pack and be viewed by customers as a unique player, CTS needed to think differently.
"Our goal is unwavering," Gaynor says. "Whether it's one year, five years or 10 years from now, our goal is to help our customers make more money--make their lives simpler--by giving them synergistic and vertically integrated services. By that I mean providing every service a salon owner needs--salon design, financing, equipment, service, setup and training--so they don't need to make another call, anywhere, any time, to get done what they need done."
Education Is Key
With 12 years of experience in the indoor tanning industry, The Nailco Group realizes the importance of education. That's why CTS will make it the No. 1 priority.
For years, product education and then certification have been the predominant types of information given to salons, Gaynor says. CTS will work with certification facilitators to sponsor their programs, but the company sees a need for another area of emphasis: business training and education.
"We found out through our own educational training at our academy that many tanning salon owners need business-oriented education," he says. "We found out that tanning salon owners can't read financial statements--can't read a balance sheet, can't read an income statement, for instance. We found that tanning salon owners don't know what turnover is. They're not aware of their turnover per SKU."
CTS will teach salon owners how many bottles of each lotion to keep on their shelves based on how many they're selling at the time, for example. Salons also will learn percentage of expenses to overall sales, current ratios, gross margins, net margins, interest and EBITDA--earnings before interest, taxes, depreciation and amortization.
By teaching classes personally, Gaynor recognizes firsthand the need for showing salons how to sell more product. This will be handled through teleconferencing with clients. Salons will learn how to sell more products instead of simply relying on discounts from their distributors.
"If they can get an extra 5 percent or 10 percent discount on inventory but they can't move it, what's the difference?" Gaynor asks. "We're not going to be undersold, but CTS is not a price-point company. It's not going out there looking to offer prices that are 10 cents under the competition."
What salons will save through discounts is "nominal" compared to what they can earn through top-line growth of sales, he says. That's where CTS comes into play. Among the topics CTS will address through its education program is how to present retail products and overcome objections.
"There are the same objections in every salon everywhere: 'I tan fine without it,' 'I don't need a lotion,' 'Which one is your hot bed?' 'When are you going to change your lamps?' 'I'm not getting any darker--give me more time,'" explains Shawn Sellers, CTS' West Coast sales manager. "All of those objections can be answered correctly that will result in a bottle sale."
CTS will strive to develop a working business relationship with tanning salon owners, whose own missions are to make money through services, education and retail, Gaynor says.
Unique Features
Besides education, the next most important cog in the CTS wheel is equipment. The company has teamed with uwe and Montego Bay for distribution of the bed manufacturers' equipment.
CTS will perform setup and service, and handle parts and training, like most distributors, Gaynor says. However, the company is unique because of the in-house financing it offers: three, four or five years with no payments for 90 days. "This gives our customers the opportunity to make money on their equipment for 90 days before they have to make any payments," he says.
Tying it all together will be a first-class marketing campaign available for CTS clients to use to target their customers. It is designed to give clients an edge.
What salons most often lack is a game plan, says Dave Folsom, East Coast sales manager. He has a military background--"It's prepare, plan, execute and assess"--and he uses that mentality to help salons lay the groundwork for success.
These materials will take salons "to another level," Folsom says. "It will be a different approach than what they're accustomed to. Think of business planning and what they need to get to another level. That's where we're coming from."
The precedent-setting program will launch in January and be so groundbreaking that Gaynor is hesitant to reveal details, except to say: "The marketing materials will be first-class, unprecedented in our industry and present the industry in a very positive light."
Part of the game plan is an e-strategy department, which will focus solely on Web-site and software development--getting customers' software compatible with their equipment, timers and Web sites.
A CTS Web site also set for a January introduction--www.ctsorder.com--will serve as a password-protected intranet only for CTS customers. They can place and track orders at their convenience.
Web-site creation, site hosting and e-mail service are other perks of joining the CTS client team. "Based on the amount of business they do with us, all that will be done free of charge," Gaynor says. An appointment book will be accessible to CTS customers as well.
Service And Support
The backbone of CTS' offerings is customer service, an aspect of the indoor tanning business that perhaps is more important now than ever before. "The indoor tanning industry is going through a lot of turmoil right now--probably more turmoil than it's ever been in," Gaynor says.
CTS hopes to inject some stability. The company has the only ISO 9002 certification in the industry, Gaynor says. The International Organization for Standardization mark is a worldwide seal of quality.
Hand in hand with quality is a distributor's assurance of product availability and delivery. With headquarters in Santa Fe Springs, Calif., an East Coast office in Farmington Hills, Mich., and four centrally located warehouses throughout the United States, CTS will guarantee customers virtually two-day delivery or less.
"With the seasonality of the business, some people have a problem stocking extra product," Sellers says. "When you start to get a rhythm in a salon where you've got products moving, the last thing you want to do is run out of stock on those particular items and lose that momentum."
A customer-loyalty program called CTS Rewards is being lined up to give clients additional benefits and awards based on their amount of purchases through CTS. There also will be an annual banquet to recognize top customers for sales, marketing, advertising and salon environment. "It will give tanning salon owners a place to meet in a trade-show environment and enjoy themselves," Gaynor says.
The banquet is unique, as is everything else CTS proposes for the January launch, Gaynor says. CTS stands alone in its commitment to the success of its salon clients.
"Our mission at CTS is strictly to provide stability to our customers," Gaynor says, "knowing that if they commit to us, we're going to give them all of their solutions that they need to run their business successfully."
A Partnership For The FutureOne of the most important variables in the CTS' equation for success is tanning equipment. Realizing the necessity to offer a world-class selection of indoor tanning equipment, Larry Gaynor teamed up with PC Marketing's Susan Miller and secured the rights to distribute uwe and Montego Bay equipment. The agreement gives CTS a national distribution territory with the exception of five or six states. "Based on the level of service, the quality of equipment and the direction of where Susan's company is going, the decision is a win-win for us," Gaynor says. "The uwe and Montego Bay equipment lines fit perfectly into our business plan, and we have high expectations for the partnership." "Susan has a wealth of experience in service, installation and delivery issues, and as we continue to grow the business, she'll be there to help us," he adds. In addition to making the sale, CTS will deliver and install the equipment, as well as provide salons with training and support to ensure profitability. In order to open a highly competitive, upscale tanning salon, today's salon operator needs to spend between $150,000 and $200,000. If salon owners are going to make that type of investment, they need to make sure they are choosing the right equipment. To illustrate its commitment to the helping salons make the best equipment choice, CTS is opening a training center for Montego Bay and uwe equipment next month. The 1,800-square-foot training center is an actual 17-unit working salon offering five levels of tanning. The facility will be located just a few miles CTS' East Coast office in Farmington Hills, Mich. "Salon owners and potential salon owners will be able to visit the training center, see the equipment, tan in the equipment and learn about the tanning business--all under one roof," Gaynor says. "I can't think of too many places in the country where people can do that." Customers from all over the United States will receive an all-inclusive, hands-on lesson about uwe and Montego Bay equipment. They will be able to sit down with the salon manager and learn everything about the business--from the equipment models to salon software and everything in between. Additionally, travel expenses will be part of the equipment package. "All this will be available within the workings of a world-class tanning salon," Gaynor says. "They will be able to make their equipment decisions based on their own experiences. What a great way to make a sound business decision. |
