Posted : 12/01/2004
Selling Tans
Cross-Promotion And Incentives Signal A New Era
by Matt Morgan
In the last 20 years in this industry, salons have gone from selling single sessions exclusively to offering “monthly unlimited” packages—30 days of tanning for a certain amount of money, subject to the exposure schedule, says Jerry Deveney, president of SunForce Marketing, Inc. in Jonesboro, Ark.
These packages gained renewed interested when EFT programs were used. Soon, “monthly unlimiteds” transformed into year-long memberships, with renewals happening automatically.
“Memberships are great as a staple, because once you get a base of memberships, you get that money every month,” says Mike Magallanes, who owns three Tan Central salons outside Sacramento, Calif., with wife Annette.
Prices raise and lower based often on what other salons in the area are doing. However, there is a delicate balance. Raising the price too much causes tanners to stop buying. Discounting leads to a downward spiral—customers begin to expect the discounts, to the point that products and services lose their original value.
Rather than discounting sessions and lotions to entice customers to buy, salon owners are packaging them together and including little extras as a bonus for buying.
Prep Work
Salon owners must evaluate their individual situations to determine the best course of action.
“The salon owners have to analyze what they’re currently doing,” Deveney says. “It all has to be tied to their unique financial situation. Until they do an individual break-even analysis on their own salon, they cannot possibly come up with an effective program that’s right for them.”
Jean Arendosh recognized that equipment variety set apart her two Tan Seekers salons from others in the area, and tailored a new package around that aspect. Of the 15 units she has at each location—in Penn Hills and Cranberry, Pa.—there are six and eight different machines. The salons’ “mix and match” packages are divided into levels, and customers have the flexibility to tan in different models in each level.
“A lot of times they can hit a plateau where they’re not going to reach the level of color that they’re looking for,” she says. “When they’re using a variety of equipment, they can break some of those plateaus and obtain a different color intensity.”
A large part of assessing a salon’s financial footing is knowing the ratio of dollars per customer.
“According to my studies, the average is somewhere between $85 and $65 per customer per year,” Deveney says. “If you take your gross sales for the year and divide it by your active database, that’s where it’s going to come out.”
To raise the dollars-per-customer average, salon owners need to change their thinking. They need to create a reason for tanners to come to the salon. This can be accomplished through a well-constructed tanning package.
Packages that include a set number of tans are popular among salon owners, but they should be limited. Tan Central sells tans in groups ranging from one to 20 with six-month expiration dates. Employees encourage customers not to over-purchase.
Selling too many tans at once or setting the expiration date too far down the road could leave the package lingering on the books, with tanners treating sessions like money in the bank, Deveney cautions.
“Create packages that require the customer to adjust his schedule to you, as opposed to the other way around,” he says. “A good package is 30 days of tanning for a certain amount of money. Never sell 30 tans for a certain amount of money. If you sell 30 tans, the customers feel like they have to use every single one of them, whereas if you sell 30 days, it requires a new purchasing decision in 30 days.”
Changing The Mentality
Commissions, rewards and other perks are designed to motivate salon staff to sell. Yet it’s not easy finding competent salespeople for typical salon wages, and the good ones often leave for better jobs anyway.
Confusing or conflicting package options, hard-to-locate prices and inaccessible lotions all add to the difficulty of selling tans and retail items.
Magallanes adopts the “keep it simple” philosophy.
“We sell packages of individual tans, one to 20; we sell unlimited tanning, where you can buy two weeks to 12 months for a flat fee; and we sell what we call our ‘tan plans,’ which are our EFT programs,” he says. An initiation fee for EFT programs is divided among the employees to serve as incentive for them to sell.
“All of our programs are super-simple so that all of our employees can sound intelligent,” he says. “You can complicate these things so badly that even your employees can’t sell the stuff.”
Much of the buying environment is created by signage inside the salon to guide people to what they should buy. In Starbucks, for example, customers are conditioned to approach the counter ready to buy—with very little selling done on the part of the employee.
If salon owners can change their salon from a selling environment to a buying environment, they can use their existing resources and watch profits soar.
“You want to make it where it’s easy to buy and not hard to sell,” Deveney says. Arendosh of Tan Seekers teaches the value of packages to her employees so they in turn can explain the benefits to customers.
“We make sure employees have an awareness of what the value is for the customer,” she says. “If you can relate it to the employees’ level, and they can see how they would feel if they’re in the customers’ shoes, then they really have an easy time selling it.”
Cross-Promotion
Now that the packages are clear, it’s time to entice tanners to buy them. A lesson on incentives can be picked up from the wireless industry.
With early mobile calling plans, users paid by the call. Today, carriers group packages into plans of a certain number of minutes with a flat monthly fee. Crosspromotion comes into play when providers throw in free additional services—call waiting, caller ID, etc.—to sweeten the deal.
“They bundle together all of these neat little incentives and put it into a package, and they show you the value,” Deveney says. “‘Purchase separately, all of it totals up to 100 bucks, but you can have it all for $49.95.’”
Time on tanning equipment is one of the lowest costs associated with doing business. Free tans or free upgrades on premium equipment has a high perceived value with a minimum of cost to the salon, and therefore make excellent incentives.
“Sell packages by cross-promoting: ‘If you buy 30 days on my base bed, you get two free sessions on the upgrade bed, or even a free Mystic Tan’ or something like that,” Deveney says. “That’s a huge incentive for people to buy that package.”
A salon could offer 10 sessions for $40 or one month of tanning for $45, but give away one free session on the super-bed to the customer who buys the second option, he says. The incentive for spending more becomes even greater.
In October, Tan Seekers offered a three-month package of tans in base-level units and included a free lotion. While giving away free retail items isn’t always advisable, it worked for Arendosh.
The free lotion serves a number of purposes: 1) it is extra incentive for tanners to buy a particular package, 2) tanners who wouldn’t ordinarily buy a lotion get to try it for free and, hopefully, 3) it encourages tanners to buy more lotion in the future.
“They feel like they’re getting a little extra value, and we try to capture the people who are not lotion users,” Arendosh says. “This way they’re willing to use it because they’re getting it anyway.”
Offering free tans or upgrades with the purchase of a retail item such as lotions is an easy way to keep clients happy.
“I actually have some salon owners who take like a $75 bottle of lotion and say, ‘If you buy it, you get a month of tanning free,’” Deveney says.
However, this technique should not be used to get rid of poor-selling lotion.
“Promote the good stuff—that’s one thing that’s a little contrarian,” Deveney advises. “Use the good beds to sell your best-selling lotions. If you’ve got a good-selling lotion, make it even better-selling by giving a free tanning session when they buy it. Customers will love you for it.”
When offering tanning upgrades, it’s important to list the value of the single session, not just the upgrade price.
“Some people say, ‘Buy this bottle of lotion and upgrade from a base bed to a super-bed for $5, so the upgrade is only worth $5 in their minds,” Deveney says. “If you say, ‘Buy this bottle of lotion and get two free sessions, that’s when you get the full perceived value.”
Successful tanning packages can take a number of shapes and forms, designed specifically for an individual salon’s needs. They can be based around a retail item with a high perceived value, and they can include the ability to tan in a variety of units. By offering more service instead of lowering prices, salons stand to raise their dollars-per-customer ratio and increase business.
