Something More

Something More
Adding a Secondary Profit Center

by Heather Gonwa

Today's indoor tanning salon operators have plenty to keep them busy, between updating their equipment with the newest technology, keeping current with lotion products and trends, and staying educated on the latest research and regulations affecting their businesses.

However, the salon owner who makes an extra effort to develop additional profit centers along with tanning not only will generate extra revenues, but will win the loyalty and referrals of a clientele forever in search of a one-stop shop.

Splitting Hairs

Many salon owners decide to offer additional services after expanding their current facilities or relocating to a larger space. However, creative salon owners can optimize the space they have by identifying non-income-producing areas of their salon.

For instance, are there "blank spaces" in the reception area that are not being used for front-desk activities, seating or retailing? Is there a hallway that serves no other purpose than to lead customers to the tanning rooms? These empty spaces can be transformed into profit centers with the addition of a retail or promotional display, or even a small workstation for a nail technician or travel adviser. The idea is to make the most of your available square footage by eliminating unused spaces.

Once space limitations and opportunities have been determined, the next step is deciding which ancillary services will most complement your salon as well as satisfy the needs of your clientele. Hair and nail services are obvious complements to tanning as people tend to associate each as a beauty or feel-good service, and enjoy the added benefit of frequenting a one-stop beauty shop.

Jim Stewart, owner of Endless Summer Tanning in Traverse City, Mich., had a successful tanning business for five years when he decided to relocate from his 2,200-square-foot salon to a 6,000-square-foot space. The move enabled the addition of hair and nail services that are set up as a separate, yet internally connected salon called Details Hair and Nail Salon.

"We didn't need 6,000 square feet just for tanning, so being in the vanity business, it only made sense that hair and nail services would complement the tanning," says Stewart. "It obviously is convenient for our customers and many come in for all three services."

All of the hair stylists and nail technicians at Stewart's establishment are independent contractors who rent their work spaces, which equals additional guaranteed income for Stewart each month. He adds that while the hair and nail services complement the tanning business, the beauty professionals also have improved their clientele base as a result of being situated next to a high-volume tanning salon.

Marcia Landon, owner of Classy Cuts & Tans in Lebanon, N.H., says that providing hair services offers the opportunity to cross-promote services and capture tanning customers for the lucrative hair market, which in turn helps eliminate her slow season.

"We do specials on highlighting or other hair services and then advertise those specials in all of our tanning rooms to help boost sales and promote the hair business," she explains. "If you can get tanning clients to come in for hair services, you're going to keep them in the salon year-round."

Spa Savvy

When Greg Marlow, owner of Tan USA in Gainesville, Fla., decided to double the size of his tanning center by acquiring the hair salon next door, he felt that a natural offshoot of indoor tanning would be day spa services. He converted the acquired space into a full-service day spa called Spa USA, which offers hair, nail, massage, facial, electrolysis and aromatherapy services performed by independent specialists who rent their spaces.

"Tanning is a vanity business, as are spa services, so the combination works very well for us," says Marlow. "We have tanning on one side and the day spa on the other, with a reception area in the middle that takes care of both. Customers come in to tan and also get their nails done, or they will come in for a massage and then go to the other side to tan. It's the back-and-forth aspect that happens between the spa and the tanning center that works so well."

Because Tan USA was well established after 15 years in the community (the salon currently has 15 locations and is now licensed nationwide), Marlow says that little promotion was needed when the spa business opened except for internal promotion to the salon's 1,000-plus membership. However, he now cross-markets the services; for example, the salon will add a spa coupon to its tanning advertising.

"Adding spa services has helped increase our tanning revenues because the spa side of the salon offers guest passes and information on tanning to help promote it, while the tanning side promotes the spa as well," he notes. "We also are able to increase our retail revenues by selling shampoos and other spa products for one-stop shopping."

In addition to tanning, Dina Gordon, owner of Jackson, N.J.-based Tan Fastic, Inc., offers spa services including massage therapy, facials, body and seaweed wraps, and other body care treatments such as reflexology. The facial service also has resulted in the salon retailing a full line of skincare products. Gordon says that at least 50 percent of her marketing efforts are directed toward services other than tanning.

"I think you have to market your other services, otherwise people will think you only offer tanning, as that's what they're used to with other salons," she explains. "We're still a full-service tanning salon, so we do have to make an effort to promote our other services. We like to do cross-promotions, where if someone purchases so many tanning sessions, they will receive a discount toward a massage or a facial. We also do 'day of beauty' promotions that may include a tanning session, a half-hour facial and a full hour of massage. This way the customer is able to try all of our different services."

Gordon also produces a quarterly newsletter that touches on each of the salon's services. She says the newsletter might feature a spot on massage therapy and the benefits of incorporating massage into a daily routine or how a full-body massage every couple of months can reduce stress.

"I think we pretty much have eliminated our slow season because of all the other added services we offer," she adds. "We have eliminated the time of year--September, October and November--that typically was very slow for us, and the added services actually have brought more business in during those months."

Supplementing Income

A number of salons have begun retailing nutritional supplements as a way of generating additional income from health-conscious customers who are leading faster-paced lives. Marlow says he can make at least an extra $1,000 per month in an area of the salon that was not generating any income by setting up a small display of supplements, protein powders and bars.

"Everybody is into watching their weight and people are so much on the go," he says. "Many customers come in during their lunch hour to tan and don't have time to eat. They can buy a protein bar, get in their car and go back to work--it's easy. Or they can take a packet of protein powder with them to put in the blender in the morning for a good meal before school or work. It's really fast and provides more protein than in a bacon and egg breakfast, with a lot less fat."

The fear of somehow insulting his customers stopped Stewart from carrying diet products for quite a few years, until he personally had gained weight and saw other individuals losing weight.

"It was just a matter of time before I finally asked them what they were using, tried the product and lost 20 pounds in the first month," he says. "It wasn't really until I actually lost the weight and had clients ask me for help that I realized I could be a distributor of the product. While I am a walking testimony to the product, the products we carry come with a 30-day money-back guarantee, which immensely helps initiate the sale. Clients have nothing to lose but the weight or they get their money back."

Stewart and his staff place brochures in each of the salon's 28 tanning rooms to create an awareness of the diet products. He says the products generate $3,000 to $4,000 in extra revenue per month and have helped eliminate his slow season.

"Once you get people on diet-related products, it's somewhat of an ongoing affair," he explains. "Clients who start this diet program take the products for three to six months, and during that time they also become silent salespeople for me through word-of-mouth. In addition, when people tan they feel better about themselves and more self-confident; with the diet products, I can help those same individuals lose weight and it strengthens the bond as far as their commitment and loyalty to my salon."

Stewart notes that supplements may be purchased wholesale and retailed like tanning lotions, or the salon can become a distributor of the products through a multilevel-marketing supplement company. As a distributor, he is able to make money not only from his customers but also from individuals who he recruits to distribute the products.

Another service gaining popularity with tanning customers is the juice bar. Gordon offers a juice bar in her salon as an added service for clients who are thirsty after a tanning session. Different flavors of juices are dispensed into a capped cup for customers, who then can sit and relax after partaking of the salon's services. In the colder months, Gordon also offers various coffees and cappuccinos.

"You can accomplish the same thing with a vending machine but a juice bar provides a nice added touch because you actually have somebody serving you a juice," she says. "Customers like it because sometimes they will sit at the bar and talk with another customer or with us, and it becomes a social time for them. Instead of just coming in, tanning and leaving, they have some time to sit and talk either with one of the employees or another customer that they happen to run into."

Flying High

An ancillary service that has taken flight with many salon owners nationwide is travel. While most tanning salons that offer travel services are not licensed travel agencies, they can generate extra income by referring clients for travel packages and then sharing in the commission.

Landon's salon offers cruises only, and she says that while cruise lines quote the same prices to everyone who calls, she provides an incentive for clients to buy their cruise packages through her salon by offering 10 to 12 free tanning visits. She advertises the cruise service with an in-store display and provides brochures to interested individuals.

Gordon also offers travel promotions and works with a wholesaler to provide clients with cruises or vacation packages to Cancun, Mexico. "We are not like a travel agency in the sense that we don't book different sites for people," she says. "We just offer various promotions such as a seven-day trip to Cancun or a cruise for 'x' amount of days that goes to certain islands." Gordon markets her travel services with fliers displayed in a brochure holder at the front desk.

In addition to tanning, nail services, nutritional supplements and clothing, Ellie Weeden, owner of Laguna Beach Club-Tans in League City, Texas, offers travel packages through her salon, which is a satellite office for a travel agency.

"I cannot call myself a travel agent because I'm not licensed; however, we have an agreement with a travel agency that provides us with brochures and information on travel packages and cruises," explains Weeden. "In addition, we display a large sign that says 'travel services provided by ... '"

She adds that her salon acts as a middleman between the client and the travel agency. Interested salon customers provide information that is faxed to the travel agent, and within 24 hours, the customer's flight and travel options are faxed back to the salon for the customer's approval. Once the client has decided on a particular package, the travel agency is provided with payment and credit information, and Weeden walks away with 50 percent of the commission. She says travel is the perfect complement to indoor tanning because of a tanner's typical personality.

"People that tan tend to do a lot more traveling," she states. "It's about time management--they take time to tan, they take time to go to the fitness center and they take time to go on vacation. The majority of people who come in to tan are more into taking little weekend trips than the ones who don't tan--they simply are a lot more active."

Ready to Wear

In addition to offering suncare, body care and even hair care products, tanning salons can pump up their retail revenues and build a true one-stop shop by creating artful displays of swimwear and sportswear.

Gordon has dedicated approximately 1,000 square feet of her salon to retailing five different lines of swimwear, offering styles from contemporary to trendy to suit her diverse clientele. Clothing racks and a special built-in display showcase swimwear as well as exercise clothing, casual wear and cruise wear.

Weeden also offers swimwear as well as activewear and beachwear to accommodate the needs of those who live and play in her boating community. She says that an important consideration when offering clothing is to know your clientele.

"I have noticed that many tanning salons mostly carry small sizes and very young-looking outfits," she says. "Our major clientele is baby boomers in their 40s, and some of them are not size 3 or 5. They are more like size 14 or 16. I have added those sizes and styles that baby boomers wear, instead of teeny-bopper styles. Additionally, even though we are in a very affluent area, I make the prices affordable so anyone, even if they don't tan, can come in and shop instead of driving all the way to the mall."

Weeden keeps her retail prices down by purchasing the swimwear and clothing directly from an apparel mart. By doing so, she is able to eliminate the middleman by buying direct from a wholesaler, and receives a break on the cost so she can offer a reasonable price after her own markup.

In the end, the key to successfully developing profit centers within a tanning salon is remembering that tanning is the reason clients come in, but one or two (or more) carefully selected ancillary services or products are what will keep them coming back and referring their friends.

"It's a nice add-on service to do massage or facials but we still are first and foremost a full-service tanning salon and our primary focus is on tanning," says Gordon. "If you add too many different services you'll wind up diverting your time between too many things and you may not put 100 percent into your tanning services. That will start to affect your customers in the long run because their main purpose for coming to you in the first place is for tanning."