Business Desk
But I am not a Salesperson
But I am not a Salesperson

Experience the financial rewards of achieving passive income in your salon

It’s never too soon to start thinking about operational changes that can contribute to the success of your business. The beauty industry isn’t nine to five, so salon owners who manage their time in a way that enhances their moneymaking abilities will find their business will grow and prosper faster. One such finance-generating activity is creating a passive income. 

Passive income is consistent cash flow that requires minimal effort by the recipient to maintain. It’s very cost effective as the Return on Investment (ROI) is high for the time involved. At least 40 percent of your salon income should be passive. So how do you achieve this?

In the two previous BeautyNZ articles we covered two important factors that influence consumer buying behaviour, Fair Market Value (FMV) and the evolution of product and bargain savvy consumers doing more research and purchasing online. To achieve passive income you first have to stock products that offer FMV to your salon clients and brands not sold through online bargain websites.  

This article reveals further pointers that can help make your salon or spa more profitable by building passive income through repeat retail sales. 


Provide Value and Satisfaction

If you have exclusive price controlled products in your salon then you can sell to consumers that choose goods and services based on the assumption that they will be rewarded with value and satisfaction. Quality + Price + Customer Service = Value and Satisfaction. To fit within the Value and Satisfaction model it is imperative to have the right match of quality retail products, fair market price and customer service to create happy, loyal repeat customers.


Don’t demotivate client choices

Professors Sheena Lyengar and Mark Lepper conducted a famous study that proved consumers are more likely to buy from a smaller selection of items in a single category than the confusion of too many products at once. Communication expert Carmine Gallo suggests retailers pay more attention to the Rule of Three, where people’s short term memory can only remember roughly three chunks of information at a time. With too many choices you run the risk of making consumers think ‘this is too hard’ and give up. He cites an example from a retailer with over 800 stores who specifically trains employees to offer a second option only if it has the features the customer said were important. Research proves that offering too many choices can overwhelm customers, demotivating their decision rather than making them more likely to buy. Stick to one or two lines. 


Make a good first and second impression

Social scientist Amy Cuddy explains that when we first form a first impression, we actually form two. Firstly, we’re determining how warm and trustworthy a person is and secondly we’re trying to answer the questions, ‘What are this person’s intentions towards me?’ and ‘How strong and competent is this person?’ According to Cuddy, these two dimensions make up 80 to 90 percent of an overall first impression which holds true across cultures. When dealing with potential customers, communicate that you are helpful friendly and approachable, rather than only interested in a sale. Then they will feel more confident in conveying their needs to you. 


Offer a solution to your client for a positive outcome 

Forget about trying to ‘sell’ your products or service – instead focus on why your client wants to buy and how you can provide that for them.  Take the time to get to know your client on a personal level, talking to them as you would to family or friends. Know your products benefits and link these to your clients’ needs. Demonstrating knowledge helps customers see you as an expert advisor there to help rather than sell.  


But I’m not a salesperson!

Many people find it daunting when the word ‘sell’ is included in a job description. But with passive income from retail sales, you are actually a professional offering expert product advice and solutions to client needs.  Remove the salesperson approach and instead aim to resolve client issues with an approach that may result in the sale. Train your staff this way and see the results. 


Success is in your plan

Your passive income plans do not need to be complicated, just realistic and easy to follow. Include a monthly measurement system and set targets for all staff according to the number of clients they see each week. Planning the set-up of passive income is key, because once in place it rolls in with a lot less time and money invested than physical treatments. 


Tips to help with your plan

• Inform your client that you are an accredited stockist, and this product is not available through bargain websites at discounted prices. This shows your client the products stem from a quality controlled brand. Say you are happy to courier out any repeat orders for their convenience. (Keep a few courier bags in your drawer, prices can be as low as a couple of dollars.)

• Only stock the best lines. Remember research shows more lines, more models, more choice is not what customers are looking for. Your customers are looking for the best. That means you want to be the specialist who selects and presents a collection of products customers can clearly see benefit to their needs.

• Ensure your product lines rewards you with an overall 100% mark-up, anything under this you are wasting your retail time and are not on the fast track to high return passive income. Many Australian salons will not even look at a range unless it offers a 100% mark-up.

• Convert a treatment into a demonstration of products so the client feels like they are trying before buying.

• Offer loyalty discounts on the clients’ next purchase or discounts on combination buying.

• Link the benefits of two products together, e.g. Educate your client with sensitive skin on how the Bella Vi dermatologically tested foundation they use has increased benefits when used in conjunction with a Bella Vi dermatologically tested primer or moisturiser. Like shampoo and conditioner from the same brand, products are often designed to work better together.

• Don’t assume your client can’t afford something – instead ask about their needs and present a solution through a product regardless of its price. Don’t short-change yourself or the prospective customer by leading with solutions that cost less. When you recommend the right solution your customers will be better satisfied and your salon’s reputation will be enhanced.

• Always ensure you have sufficient retail stock on hand for impulse buying.

•  Send the client home wearing the product or offer them to take a tester home for few days to fall in love with the product. Always follow up with a phone call to see how it is going and if they have any questions.

• Offer fun VIP promotion evenings to introduce clients to a product that they otherwise may not have tried. 



• Build sales confidence and motivation in your staff. Be sure to ask your suppliers for help in this area.

• Pay staff incentives. There’s a reason many small businesses stay small – they think small and try to limit every cost.  When you pay employees more, you can expect more from them. Stores that pay higher wages with more full-timers have lower turnover cost and higher profitability.

• If you sell a make-up brand encourage staff to wear the products to show how beautiful they are. Many a time ‘what are you wearing’ can turn into a sale. 

• Make a time at the end of every month to measure sales targets and performance. Make it a light, interactive experience. If targets are not being met, ask staff what they think is the problem and work out a plan together to put into place.  A big piece of your sales strategy is knowing if something doesn’t work to make some tweaks and monitor their success.

• Ensure staff are trained to sell the correctly matched products or services that are genuinely useful, enjoyable and beneficial to a particular customer needs.  By doing this you are proving you can offer value and satisfaction to your clients. Always reward your staff with compliments and an incentive programme to ensure this standard is kept up (e.g. pay for them to upskill).

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