May 09, 2012

Nail Salon | Hair Salon | Spa: Are we suitable for Revenue Management

With the upcoming Beauty Fair Middle East, many people inquire us: does my salon qualified for Revenue Management?

The key to revenue management for salon (nail bar / hair salon...) is how to balance between price, space, and time to be in line with perishable inventory (your seat), distribution methods and variable demand (Days of week, Time of days, months, events calendar...).

Should price be more expensive for more difficult the service that requires longer time? It is important to set your prices according to your fix (Rent, DEWA, Equipments depreciation) and variable costs (labors, ingredients...).

Don't be stress, if your Salon struggle with those 3 key challenges to generate extra cash:
1) Anticipate your demand:
That is a difficult one for small businesses, some customers reserve in advance, some just walk in.

2) Different skill sets:
Some practitioners may be faster than others or some layout designs are more study than others. The staff skill set may be very different, their expertise is difficult to assess during an interview (Asia). One possibility would be to standardize your operations in order to gain more control on the duration (15mn, 30mn, 45mn, 90mn...)

3) Different strategies:
Busy beauty salons that want to increase their revenues and experience may afford to have 4 staffs for 1 client for a complete manicure and pedicure set. Whereas, in a smaller structure you may only have one staff devote for many clients, so it takes longer to perform the job.

Time allocation is not practiced as much in Dubai nail's bar or hair salon, as compared to Spa operators.

But, one company found a better way to control time. The N.Bar (http://www.thegroomingco.com/nbar) differentiates itself from competitors through the use of technology and the proliferation of social media as new distribution channels. First of all, the company defines time explicit for all services including nail art. How? it defined all procedures for each service to come up with a set price and time package. It penetrates well in social media, Facebook, Twitter. The company puts great efforts in managing time variability, it can schedule staff more efficiently, reduce waiting time between customers and increase service duration.

Some Spa Operators like Sensasia (http://www.sensasiaspas.com) in Dubai are more advance with revenue management concepts. No wonder it is a success story in the Emirate. Regardless of the menu, time is accurately define per treatment per time duration such as 30mn, 60mn, 90mn, 120mn, 150mn. By stipulating time, the operators gain more control over time which allows them to increase productivity of their therapists, service more customers which increase the bottom line. Have a look to their site, with a online booking systems along with a friendly social media plan. Well done!

In other words, this is Revenue Management! For more information, register at Beauty Fair Middle East (May 30-31, 2012).









2 comments:

  1. Great thoughts you got there, believe I may possibly try just some of it throughout my daily life.Revenue Management

    ReplyDelete
  2. Hi
    That was a good example for the point you are trying to make. I am a medical student and what I am planning to do when I graduate and have my own clinic is to make sure that I follow-up on my patients and giving their next appointment dates.

    ReplyDelete

We thank you for participating in our Revenue Management discussions, and look forward to bring you the best of our ideas. For more information, please visit our company website at www.rsvp-hospitality.com