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#004 - My Trip To New York And The Case For 'Specialising'

Jan 29, 2019

I was recently in New York visiting with my oldest son. It was a great trip and a much-needed break from work. Welllllllll, it wasn’t completely a holiday. There was a little bit of work too. Hard work, may I say. I had a few treatments and of course spoke to some business owners in the industry. Even more important, I made some pretty important observations that have confirmed what I’ve been saying for a few years now.

Let me start by saying that anywhere I went, I had to cab there. Now you must know that Manhattan is a small island, right? Well in this small island, except for nail bars, brow bars and hair removal businesses, salons were few and far between. And most were more (now visualise air quotes) ‘spa’ relaxation businesses, not salons or skin clinics with serious skin treatments using cosmeceuticals. If you wanted a results-orientated facial, you had to go to what is mostly referred to as ‘Medspas’ over there.

If you’ve ever been to New York 10 years ago and beyond, you would know that just like it used to be here in Australia, you couldn’t walk a block without passing at least 3 or 4 salons. In some areas, even more. Well none of that now! And just like us here in Australia and New Zealand, the Americans are facing the same challenges we are, but it seems to me that they’re facing them a lot faster.

Let me explain what I mean first.

Some of you have heard what I’m about to say many times. Even if you have, you need to hear it again because although so many have heard it from me as far back as 3 years ago, you still may not be doing what needs to be done to adapt to the changes in our industry, brought about technology and dispersed, increased competition.

Remember the days when someone wanted a facial, manicure or leg wax, they would go to the beauty salon? They could ONLY go to the beauty salon. The beauty salon was the one stop shop for all things beauty. Face, body, nails, massage. The ‘beauty salon’ did it all.

Those were the good old days, when beauty salons made money, easy money. Some salons made money in spite of themselves! And even though there were many around, there was plenty of business for everyone. Demand always exceeded supply.

 

Today, so much has changed. Today, the definition of the beauty salon has gone under siege. It means so many different things. The market has segmented greatly. Today, we have salons that ONLY do nails, or only do waxing, or only tanning, or only massage. We also have hair removal specialists, IPL/Laser salons.  And my goodness, we even have specialist brow bars! Each of these businesses are regarded as ‘beauty salons’, even though they don’t do what you do. These businesses now, are part of your NEW COMPETITION.

 

Now the problem is….YOU CANNOT COMPETE WITH THESE SPECIALISTS. And you shouldn’t. These ‘salons’ are quicker, cheaper and mostly, better than you. Think about this logically and clearly. If all a therapist does ALL DAY is nails, nothing else, surely in time this therapist is going to be an expert in nails. Certainly, better than your therapist who does nails, waxing, facials, tanning and more.

And how about waxing? The therapist who does 6 Brazilians a day is going to be faster, more efficient and a cheaper waxer than your all-rounder. Am I right?

So now, or at least very soon, you will find yourself at a place where you will be forced to make a decision because if these specialists haven’t taken all your nail, waxing, tanning and massage business yet, they WILL soon. You’ve already lost some of your business to these specialists. If you don’t think so, run some reports and you will see I’m right.

And you know what? It’s not your fault. Even you would admit that if you found a hairdresser that was better and cheaper than the one you’re currently going to, you would change, wouldn’t you? Of course you would. The industry has changed. The way people sell and the way consumers buy, has changed.

So, what options do you have? Well from where I see it, you have one of 3 options.

You can continue the way you’re going
You too become a specialist or
A combination of both but with a totally new focus
Let’s discuss each separately

OPTION 1
If you decide to continue the way you’re going, you’re treading on dangerous ground.

If you take these specialists head-on, your business will be eroded over time. How long it will take is hard to say as it depends on where you’re situated and your competition levels. If you decide to drop your prices in the hope that you’ll retain your existing business and even bring in some new business, you are deluding yourself. YOU CANNOT COMPETE. Your competition is not just cheaper than you. Remember, they’re better and faster than you.

OPTION 2
Well, you too can become a specialist. Ok, good call. What will you specialise in? So many options? Ah no, not if you want to make good money. The specialists I referred to before are solely trading time for money, the more they’re booked, the more money they make. The more they’re booked, the more staff they need and we all know what that leads to don’t we? A big fat headache! They may bring in big revenues by having a factory of robots doing one thing but the wages at this factory are very, very high.

If you want to stay in the game AND make scalable money, then you need to choose the specialty ‘SKIN SPECIALIST’. That’s right, you need to focus on skin. Why? Well for a start, the hourly revenue return on skin treatments is greater than beauty treatments. Far greater. In one hour, you can perform 3 x Eyebrow Waxes bringing you around $75 an hour. In same hour, you could be doing 2 x 30minute peels at $130 each, returning $260 for the hour.

See the difference? The difference is even greater if you’re doing more high end treatments such as Skin Needling or other advanced skin treatments.

But if that’s not enough to make your decision easier, THERE’S RETAIL! In one hour, the skin specialist could do the 2 peels, and sell each client two products. With an average product price of $80 (and that’s being conservative), you have the 2 peels at $260 and 4 products at $320. In an hour, a therapist could be earning $580!

So how’s that $75 eyebrow/hour sounding to you NOW? Same hour, same wages, but very different revenues. There’s no direct wage cost/hour for selling retail!

It’s a no brainer. Really. No brainer. I have a number of clients who have made this shift and are simply…..killing it! Ideally and ultimately, this is the direction you should be looking to stepping into.

Ok now let’s get to…
OPTION 3

Regardless of what I’ve said so far, you may still feel the need to hang on tightly to your beauty treatments and if you do, let me give you some advice. Keep your traditional beauty treatments that are fast, low-cost-to-perform and keep your prices high, or at least don’t drop them from where they are now. Keep these treatments to offer your existing skin clients one place to go. Nothing else. These clients won’t mind paying more for the convenience.

DON’T please don’t, continue with slow, high-cost-to-perform treatments like Eyelash Extensions or Acrylic Nails. Not only is there no money with the time your therapists perform these treatments, but there’s so much room for error which leads to client complaints, re-dos; that will cost you even more.

And the last piece of advice coming to you is, if you choose to continue doing beauty treatments, hire a ‘beautician’ to do these treatments so that’s all she does all day and have your senior skin therapists concentrate on skin and give them the chance to become remarkable in this highly profitable specialist area. The hourly rate of a beautician is lower than that of a Diploma Qualified Beauty Therapist or Dermal Clinician.

Ok, well that wasn’t the last piece of advice, I’ve got one more for you. Place your marketing and promotion efforts ONLY on skin. If you do this, coupled with your senior therapists becoming remarkable skin-treatment-service-providers, you will be so booked out with profitable skin treatments, that you won’t have time for the less profitable beauty treatments and then you’ll feel confident discontinuing them over time.

So back to New York. New York is already there. I could not find a ‘beauty salon’ that did it all other than day spas, relaxation-type salons and the reason those still have their doors open is because their attached to a hotel or holiday destination. I did not find a SINGLE salon that did everything AND cosmeceutical skin treatments. Not a one. Now I’m not saying they don’t exist but I am saying that in 3 weeks, I couldn’t find one. As I said, Medspas are sprouting up there at a very fast rate. Here, we refer to the few we have as Skin Clinics or Medispas.

Now here’s one thing I know for sure, we generally follow the trends of the US so I don’t see this trend too far away for us here in Australia and New Zealand.

I hope this blog has shed some light into the changes you need to be making in your business, moving forward. Change is not always easy but it’s definitely doable. You need a little courage, a plan, some determination and an insatiable hunger for success.

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