Salon owners must take advantage of every opportunity to increase their profit margins and edge out their competitors. One way of accomplishing these goals is to utilize electronic funds transfers or EFTs. Owners who are not already using this tool are missing out on an important means of generating year-round income and retaining customers.
Gaining popularity in the early 1990s, EFTs have become a simple and effective way for savvy business owners to generate consistent revenues. EFT membership programs are as easy to implement as they are advantageous. A client must fill out a short enrollment form, choosing a payment option such as their checking or savings account or a credit card. Then, payments automatically are transferred each month from the selected account to the salon’s account. If a client eventually wishes to stop making payments through an EFT program, he or she generally is asked to give written notice within 30 days of the final transaction.
One of the benefits salon owners receive through the implementation of an EFT program is client retention. Because clients no longer have to think about paying for tanning, as it happens automatically, the end result is that they will tend to stay with the salon longer than they would.
Similarly, when a customer signs up for 10 tans or a month of unlimited tanning, both packages are used for their duration with no guarantee that the customer will return once the tanning time is used up. However, signing up a customer for a membership and then setting them up on EFT helps guarantee that the salon will retain that customer month after month.
In addition, by charging an initiation fee for a membership, a salon can make more money up front and charge lower monthly fees. And, because the monthly fees are lower, members may decide that it’s not worth it to leave the salon for the two or three months they don’t tan during the year, especially since they won’t want to pay the initiation fee again when they return. Another benefit is that the salon is generating the same amount of income even if the client does not come in to tan as often.
Therefore, perhaps the greatest benefit of utilizing EFT is its ability to help salon owners generate a year-round cash flow and maintain a steady income level, even during a salon’s slowest season.
Marketing an EFT Program
The salon owners who are making money throughout their slow seasons with the use of EFT inevitably are the ones who have a strong sales program. Every new customer should be given the opportunity to join a salon’s EFT membership program, and getting customers to join begins with a strong sales staff.
Most salon operators have heard of EFT, but they may not know how to sell it. So, they present it as, ‘We’ll just take $20 per month out of your checking account and you’ll have an unlimited package.’ There’s no value in that—they haven’t gone over why this person is looking to tan, what they like about tanning, or what they did or did not like about their old salon. All of these issues need to be addressed in order for a tanning salon to have a viable EFT program.
Many companies provide salon owners with materials and services to aid in their sales presentations. Additionally, there are a number of ways a salon salesperson can market the idea of EFT to their customers by catering to a client’s continual desire for more time and less stress.
In today’s busy world, the customer will be happy to know that when they come to your salon, they don’t have to worry about filling out any paperwork. They can do it once and their payments are deducted from their account with no hassle.
Overall, the approach should be non-threatening, such as, “We’re going to put your bank or credit card company to work for you—they’re going to pay this automatically for you every month and you’re not going to have to worry about it.” The wrong approach would be, “This is a debit program, and on the 15th of every month, we’re going to go into your account and take out $30.” Anything that gives a consumer the impression that they’re losing control will scare them. It sounds more friendly to say that their bank is going to take care of the payments for them and they’re not going to have to worry about it.
