Wednesday, September 19, 2012

Discount Fever In The Salon

A look at the Dangers of Discounting, Couponing & "Social Buying Sites"

In this age, where "discount-focused" marketing tools, also referred to as coupon sites or social buying sites, I wondered how this has affected the hair salon and beauty industry. You're probably familiar with GroupOn and Living Social, as they're the most popular in the San Antonio area. But, there are dozens more that have sprung up quickly, all offering exposure to businesses and great discount opportunities for consumers. But is it all it's cracked up to be?

Many of us are gradually becoming hardwired to look at paying less than full price. The new status symbol has shifted from, "what great quality/service I received" to "look how much I saved." Many who would typically be quite satisfied with paying full price for the service or the product (or perhaps even on sale at a 10% discount) from an establishment we've been frequenting, are now attempting to bargain or talk down prices. This can have a serious down side at a hair salon. 

Why? When a salon offers a discounted service like this, they're banking on the fact that you'll be a returning client. It's really the only way that they can possibly break even on the pricing structures that the coupon sites use. Typically, the sites ask that you discount your service/product by at least 50%-60%. They then split the amounts purchased by consumers, making the salon's actual earnings only 25% of their regular fees! You don't need to be a CPA to realize that the winning party here is the coupon site, not the salon. The salon hasn't paid their employees, the utilities, the rent, advertising, or any of the other overhead and operating expenses.

There are two ways a salon can get around this. The first might be to artificially inflate the true "regular price", so that when they reduce the fee by half, it's not as big a hit. I've actually had this suggested to me when I met with one of the local "knock-off" companies to GroupOn. Or, a salon might also be encouraged to make limitations to the offer, usually hidden in the fine print within the ad details. For instance, if the 50% off foils offer was made, they could limit the number of foils to just 6. We all know that six foils wouldn't even be worth your time at the salon, as the average head of hair takes many more for a good highlighting.

I've seen these strategies used and I don't like it. I wouldn't want to be on the consumer end of a business feeling like they had to take a shortcut in order to avoid taking a loss. I provide professional services and I have worked hard for many years to perfect my skills. I would not consider a shortcut or do less than my absolute best because I'm not getting paid for my time and effort. And that's a risk with these coupon programs.

For these reasons and more, I've chosen not to participate in the social buying fever that has been pretty active in the San Antonio area. I would much prefer to offer my clients quality services at fair prices every day of the week. By doing this, I hope to develop a loyal following of clients whom I love working with on their hair extensions and hair care needs.

REFERENCES: - Web Trends - Coupons 2.0: Ten Social Buying Sites That Add Up To Savings - Groupon: Is there a large enough market for more group coupon sites?

RESOURCES: - The Daily Groupon - The Best of San Antonio

Melissa White is an experienced hair extension artist and stylist whose passion is to bring out the natural beauty in everyone by enhancing their own individual features with the use of exquisite hair extensions. Melissa has over 10 years of extensive training with the industries top hair extension companies in the newest techniques. Originally from Boston, Melissa has been in San Antonio for the past 8 years. She believes that everyone should be able to access and afford the hair of their dreams . . . thus the creation of Extensions of Yourself, San Antonio's first salon which specializes exclusively in quality hair extensions.