Saturday, October 27, 2007

Advertising and Marketing

There is no end to the advertising opportunities that salon owners are constantly bombarded with. Yellow pages, local papers, newsletters, shopping carts, billboards, bus shelters, direct mail, magazine ads, specialty calendars, tv,'s enough to drive a person crazy. I'm going to talk about some of the things we've tried and the results we saw. Keep in mind, I'm no marketing expert. Managing the marketing budget has been a big challenge for me because I have no background in it and there are so many salespeople wanting a piece of me.

One of the problems with advertising is it's difficult to tell if it's actually working. Just because you put an ad on the radio doesn't mean people will come running through your door. But just because they are not running through the door doesn't mean it's not working. They may remember you when they are ready to switch salons. So you may be gaining name recognition and reputation even if you are not seeing new clients. We are now advertising less than in the past because we are getting many clients through referrals. I believe that the advertising we did in the past helped get us to this point.

Direct Mail - The thought of direct mail makes me cringe. I hate junk mail! But the former owner of my salon (and founder) discovered that very targeted direct mail can be quite effective. The piece we have had historical success with is what we call a "new mover" ad. We send out a piece monthly to people who have purchased a home in surrounding zip codes. We do not mail to apartment dwellers because we are on the high end price-wise. The piece is a very professional tri-fold that offers a free haircut to the recipient. This was an expensive program to run. We would order a year's worth of "shells" at approximately $0.16 each, then each month the direct mail company would prepare the list, do the mailing and bill us for postage. Our monthly costs runs about $400 to $700 depending on how many new movers there are on the list. Since we were a commission salon until recently we also had the commission cost of providing the service because the stylists would receive full commission for the service. Direct mail costs alone cost us about $6,000 per year and we gave away another $5,000-$6,000 in services for which we had to pay our employees.

After we took over the salon we continued this program and just recently decided to discontinue it. We are finding that most of our new guests are coming from referrals now so this program is too expensive to continue. For a newer salon without referral-power, however, it's something to look at.

We did another direct mail piece last year called a "like prospect" mailing. The direct mail company takes a dump of your client database and runs it through their systems to find households that meet the demographic of your clientele. We paid $0.50 a piece (including postage) for a nice mailer that sent a $10 gift card to prospects. I think about 7,500 went out and my gut feeling is it wasn't worth it. Unfortunately with my old salon system it was difficult to track effectiveness of an ad campaign. Given the cost, though, I don't anticipate doing this again.

Yellow Pages - Have you noticed how the Yellow Pages sales people always seem to drop in that your competitor is taking out a 1/2 page ad? They try to scare you into purchasing some ridiculously expensive ad for fear that all the new clients will go down the street. At our salon we ask every new client how they heard about us. I actually made it a required field so they have to collect this information. In three years we have had 3 people - THREE - say phone book. A couple of years ago I did experiment and purchase a big ole ad for about $3,000 per year. It was right at deadline time and they still had half the inside cover available and were selling it for a fraction of retail (which of course we know is a made-up number). Anyway, we tried it and noticed absolutely no difference in our phone activity or new client traffic. I think now we take a bold listing in the real yellow pages and a free listing in the copy-cats. Cost is still about $360 a year. My advice - don't let them scare you. Pass on the big ad.

Newspaper - This is one we haven't tried. We are a single location salon and the newspaper is soooo expensive because you have so much reach. The trouble is we would be reaching people on the other end of town that would never come all the way out to see us for a haircut.

Magazines - Our town has a couple of local magazines. One of them is a glossy, classy high end magazine that takes subscribers. The others are freebies you can pick up at Panera - one catering just to women, the other about health and fitness. The only time I have advertised in these in when we have been featured in them. For the health and fitness magazine, when the owner came to try to sell me an ad for their Men's Health issue, I offered to write an article on men's skin care. Since they were kind enough to publish it and we got some great PR, I also purchased a small ad but it cost me $400! We didn't get much traffic from the ad but I think we got our name in front of a lot of women who may be buying their guys gift cards for Christmas this year. The classy glossy magazine named us Top Spa for Men in the city so we were actually featured with a nice article and photo. This just happened recently (October 07 issue) and we are definitely seeing some traffic from this exposure. To go along with the great PR from being named top spa, I purchased ads in the Oct., Nov. and Dec. issues. The ad in the spa issue was 1/4 page and I'll have 1/6 page in the gift guide section of the Nov and Dec issues. This is a first for us so we don't know yet how effective it will be. I'll let you know!

Radio - We've done a fair amount of radio in the past. We would typically do some ads for one week before Christmas, Valentine's Day and Father's Day. Often we would also pay an extra $400 or so to have a live remote at our salon. We would have someone from the morning show of a station popular with females come out to broadcast live. We never got much foot traffic, but we would see an uptick in gift card sales. Usually we would run a special for "their listeners only" offering 10% off gift card purchases that day only. Sometimes we were also able to go down to the station the morning of the remote and do a quick on-air interview during the morning drive. This year we are not going to do the radio, but I do think it has helped us to get our name out there.

TV - We did some TV spots last year on our local cable shopping channel. This is one of those cases where I can't link specific new clients to the program, but I think it got us a lot of familiarity. My employees tell me that three years ago (when we bought the salon) if they told someone where they worked, the reply would be "where?" We just had no name recognition. Now when they tell someone where they work, they get instant recognition. These TV spots cost us about $400 per week and we had to commit to 13 weeks. They didn't have to run consecutively so we were able to run some before Christmas and save some for Valentine's Day and Father's Day. I'm not sure if I would do it again, but I have no regrets.

This holiday season we're thinking of sponsoring a local talk tv show one day. We will partner with other businesses in our shopping center so the cost is minimal. It probably won't translate into instant sales, but it will keep our name out there. Plus another benefit of the TV and radio advertising is that it is very visible to the employees. It's important for them to feel like we are promoting the business.

Calendars - There is a business in our town that puts out a local calendar that is distributed to households free of charge. It has vintage photographs and includes a lot of local events. It also carries advertising and coupons which is how they manage to send them out to households for free. We put a coupon on the bottom of three months a couple of years ago. Our hope was to attract new business, but this was totally misguided on my part. Virtually all of the coupons that came in were used by existing clients. In hindsight, I think "duh". We are an upscale salon and it's not likely that we're going to attract new business from a coupon on the bottom of a calendar - I mean we're not SuperCuts (no offense, SuperCuts - it's just a different market). So that is one that doesn't work for us, but might be great for a more value-based salon.

Charity Auctions - This one isn't technically advertising, but it's something we do a lot of. I think every charity in town that is having a silent auction knows to ask us for a donation. We never donate cash - always a gift card. We ususally do a $50 gift card and we send it with a nice glossy flier and a service menu. It puts our name in front of a lot of people as they check out the auction items and it helps the community. Often the requests come from our clients for a charity they support, so it's also goodwill with our clients. It's a good way to get your name out there.

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