CUSTOMER STORIES

In an industry often characterized by traditional pricing models and one-size-fits-all services, Laurie O’Neill chose an innovative approach to salon management that helped her business stand out. After navigating a transition in ownership at her previous workplace, Laurie seized the opportunity to establish her own salon. Although the onset of the COVID-19 pandemic initially postponed her plans, it ultimately provided her with invaluable time to refine her business strategy. This case study delves into Laurie’s journey, highlighting her decision to use technology to help her implement a personalized parts and labor pricing model that not only transformed the client experience but also boosted profitability.

BACKGROUND

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Laurie O’Neill was a commission stylist in a salon in Welland, Ontario, Canada, that underwent a change of ownership. Recognizing that this was the push she needed, Laurie decided to open her own salon: Salon@Church. Her journey began in October 2019 when she purchased a building with plans to open in May 2020. However, the COVID-19 pandemic necessitated a delay, providing Laurie ample time to strategize and prepare for the launch.
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OBJECTIVES

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The primary goals of the new salon included:

• Leveraging technology for operational efficiency

• Implementing a modern and personalized pricing structure

• Creating a positive and motivating work environment for the staff

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Initially, Laurie did not mark up products used during services, fearing it would prevent her new salon from being competitive. Although she was not making a profit from these products, she did pass the costs along to clients. Over time, she marked up the products used and gradually increased the SalonScale product fees to help the salon realize a profit. Additionally, the salon motivated staff by offering them a commission on backbar products used for services, framing it as an incentive rather than a cost. This opportunity helped staff view the associated costs positively, fostering a culture of ownership and collaboration.

HOW IT WORKS

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The products used during a color (or other chemical) service are itemized on the SalonScale app and then transferred to Aura. For Salon@Church, Laurie has chosen to categorize these charges in Aura under retail. The cost is marked up at the salon’s set percentage, with a single line item listed as SalonScale on the client’s invoice. To help explain the pricing structure, the business lists that it is a SalonScale salon on its website and service descriptions, explaining that it charges for products used while performing services.

RESEARCH AND PLANNING

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During the lockdowns, Laurie conducted extensive research into salon management software. After evaluating over 15 different platforms, she selected Aura Salonware for its personalized approach, innovative features, and comprehensive reporting capabilities, including year-over-year comparisons, enabling Laurie to track performance metrics effectively. This selection aimed to ensure the software looked modern and would support the salon’s operations as it grew. Laurie also integrated SalonScale, a color management system that encourages a parts and labor pricing model. With SalonScale, the salon could charge for both the services rendered and the products used, ensuring transparent and customized pricing for each client based on their individual needs.

IMPLEMENTATION

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Upon opening, the salon introduced the parts and labor pricing model and offered clients personalized quotes for their services. This model addressed the disproportions of traditional pricing structures, where different hair types received the same pricing regardless of the time and products required for their service. This transparency about costs was similar to how mechanics charge for both labor and parts during repairs.

RESULTS

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The adoption of technology and a transparent pricing strategy led to several enhancements:

Increased Client Understanding: Client feedback has been overwhelmingly positive, with many appreciating the clarity and transparency of the pricing structure. The owner’s analogy of comparing salon services to automotive repairs resonated well with clients, making them more comfortable with the customized approach.

Empowered Staff: Staff members receive commissions on products used during services, fostering a sense of ownership and investment in the salon’s success. This structure also helped them see the financial benefits associated with their services.

Financial Growth: The initial implementation of the parts and labor pricing model significantly improved profitability. Within a short period, the salon recorded a profit on backbar products, typically viewed as a significant liability in the salon industry.

Business Insights: Aura’s reporting features provided Laurie and her team with vital insights into performance trends, enabling informed decision-making and growth strategies.

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CONCLUSION

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By marrying innovative technology with a transparent, personalized pricing strategy, Laurie’s salon not only positioned itself for financial success but also cultivated a supportive environment for both clients and staff. The combination of Aura’s management and reporting capabilities and SalonScale’s color accountability supported a transformative pricing structure, allowing the salon to thrive even amid the challenges posed by the pandemic. This approach serves as a valuable lesson for new salon owners looking to differentiate themselves in the competitive beauty industry.

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