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5 Key Steps That Will Turn Product Into Profit

Guest post by: Pam Stellema

Article Overview: If you have ever been to a retail training seminar (and who hasn’t?), you will no doubt have been told that retailing product in your salon can generate 2 to 3 times more profit for the time taken than providing services for your clients. With this in mind, there can be no better time than right now to review, and improve upon, your current retailing activities to ensure that you are going to maximise your sales during the busy year ahead. Retailing does not have to be the cream on your profit cake, if done effectively, it can actually turn out to be the cake itself! By implementing the ideas that follow, you should be able to generate more sales and therefore more profit in your salon.

5 Key Steps That Will Turn Product Into Profit

If you have ever been to a retail training seminar (and who hasn’t?), you will no doubt have been told that retailing product in your salon can generate 2 to 3 times more profit for the time taken than providing services for your clients.

With this in mind, there can be no better time than right now to review, and improve upon, your current retailing activities to ensure that you are going to maximise your sales during the busy year ahead.

Retailing does not have to be the cream on your profit cake, if done effectively, it can actually turn out to be the cake itself!

By implementing the ideas that follow, you should be able to generate more sales and therefore more profit in your salon.

1. Keep the right amount of stock to generate sales and reduce expenses

How many times have you, or a staff member, spent valuable time recommending the perfect product to a client for home use, only to find that you have run out of stock after the client has agreed to purchase it? This happens in many salons and is a total sales killer not to mention a time waster. This situation can be avoided and overcome by knowing how often each of your products is turning over and then ensuring enough stock is ordered and on your shelves to see you through until your next order arrives. If you are getting in 6 cleansers and selling out 2 weeks before your next order arrives, look at increasing your stock holding to ensure that you will always have enough stock. You simply cannot sell (and profit from) products that you do not have.

Looking at the other side of the coin, it is probably time to review some of your slow moving stock quantities and reduce your stock holding of these poor performers dramatically. By doing this you will be freeing up money with which you can then use to purchase more of your high turnover products. If you have some really slow movers, you may want to consider not reordering them as they are sold. It is far better to ensure your money is invested into stock that is turning over on a regular basis rather than try to keep one of everything from the product range. Don’t think you have to keep at least one of everything from the range on your shelves just to make your suppliers happy. There is no logical reason to keep even 2 or 3 of these products on your shelf if they simply don’t sell regularly. If it doesn’t sell, be ruthless and set it free!

Your next step:

· Do a quick evaluation of all the stock you are currently holding that is not turning over enough times per month to warrant keeping it. It is bound to be worth more money than you realised!

· If a product is not moving, get rid of it as quickly as possible and use the money to invest in additional high turnover items that will bring you a much better return on investment. Consider specialling it out or selling it at cost to therapists or their families (the main thing here is to get your money back in where you can put it to better use).

· Review your sales reports and ensure that you are carrying enough of your hero stock items to see you through till your next order. Find out what you are regularly running out of by asking your staff and ensure that you increase the quantity that you keep on hand of these items.

· Brainstorm with your team to find out what products you could be carrying (and currently are not) which they would happily retail to their clients.

· Ensure your product display sends a message to your clients that says you are serious about retailing.

2. Eye level is BUY level

If you have retail product shelves that start at floor level and go above eye level, chances are you not maximising your retailing opportunities if your stock is spread out over this entire area. Take a tip from those clever supermarket planners who always put the items that they want you to notice, and buy, right in front of your face. On multi level shelving units, only one or two of your shelves make up your prime retailing space so it is important that you use this space wisely to display your HERO items. These are the high turnover products that your clients are most interested in purchasing from you. If you don’t know what these are, check back on your sales figures and it will soon become evident which items deserve this valuable space in your salon.

Your next step:

· Review your sales figures to determine which products are in your hero range and then give them pride of place at eye level on your retail display.

· Use lower shelving to hold extra stock and some display material.

· Ensure your product display is well list and immaculately clean.

· Include a tester unit with your products so clients do not need to take away samples to “try before they buy”

3. Make the product price visible to your clients

Shock and horror! Here I am telling you to do something that you have probably been told to avoid at all costs. Think about the last time you wanted to purchase a high end item but no matter how hard you looked, there was no price tag attached. Did you walk over to the salesperson and enquire about the price or did you put the item back on the shelf and walk away? If you are like the majority of people, you didn’t want to get involved in a sales conversation until you knew that the product you were looking at was affordable to you.

What is the point of hiding your product prices from your clients until after you have had the sales conversation? If you do this, most clients will be so focussed on thinking about the price that they won’t hear the important information that you are trying to give to them about the benefits of using the product. Bite the bullet and price your products. Your clients will love you for it.

Your next step:

· Ensure all retail product is clearly priced or has a price list on display close by. Never make your clients have to ask the price because generally they would rather just walk away then risk the embarrassment of not being able to afford the product you are trying to sell to them.

· Where possible, use pricing stickers that include your salon name and phone number. This will ensure clients know where to repurchase when they run out of their favourite products.

4. Don’t keep your products a secret

Your clients generally have a lot on their minds and are not always aware of the products (or services) that you offer. Many clients never look beyond the products that they have used in the past. Because of this, you need to have some clever strategies in place to make your clients aware of what fabulous products you have available to them.

By creating interesting through creating great displays with quality promotional material, you can often stimulate a client’s interest in a product or range. These displays can be used on your front windows, reception area, common areas such as hallways and of course in your treatment rooms.

You can also introduce your clients to your retail products through informative and fun “Client Evenings” where you can generally always get supplier support for samples, lucky door prizes and brochures. These events need to be planned carefully but can result in a major boost in sales both on the evening and ongoing.

Your next step:

· Remove any old, torn or out of date promotional material that you currently have anywhere in your salon.

· Contact your suppliers and ask about providing new season promotional material that you can use in your salon to stimulate sales.

· Plan a client information evening where sales are the focus.

5. Get your team EXCITED!

Selling more products is an exciting prospect for you as the salon owner but what makes it an exciting prospect for your therapists? Truth be told, unless your therapists are on an incentive program, the prospect of having to sell additional retail product is not going to make their day! Most therapists prefer to provide services to selling, so if you are going to really boost those retail sales, you will need to have some great strategies in place first.

Being able to generate sales requires a very in-depth knowledge of what is being sold. This knowledge is imperative if you are going to be able to prescribe the right products to meet client needs and therefore achieve a greater retailing success rate. Education for your team is never a burden and is an investment in your business when done well, will pay for itself many times over.

Your next step:

· Hire a professional to train your team in Relationship Retailing.

· Set personal targets for each team member in retail sales and introduce a bonus rewards program

· Praise retailing efforts often.

· Let each team member “train” the rest of your staff on a hero product at your next team meeting.

· Ensure all staff can purchase product for themselves at cost plus GST. If your staff are not using your product range or do not believe in it, they will not successfully recommend it to their clients.

· Allow sufficient time for therapists to recommend product after a service has been provided.

Favourite quote:

Setting an example is not the main means of influencing others; it is the only means. Albert Einstein

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Article Tags: Profit, retail, sales, Salon, Spa



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