From Troubled Waters to Triple Digit Service Sales Growth!
Summit Salon Consultant: Marti Nelson
Total Annual Sales: $397,656.10
Average Retail/Month: $8,159
Average Services/Month: $14,250
Average Booth Rent/Month: $9,717
One Year After Summit Launch:
Total Service Sales Increase: +22%!
9 Years After Summit Launch:
Total Annual Service Sales: +293%
Most Successful Retail Campaign: Buy 2, get 1 FREE. Our RTS usually hits 22%+ in those months.
In a professional beauty industry market in Westminster, Colorado, where more than 90 percent of salon companies were rental, Heidi Casler thought that she was doing the right thing when she bought Yacht Club Salon. But booth rental challenges cropped up immediately. When inventory spiraled out of control and she had no way of holding the renters accountable to quality, attendance, work ethic, and appearance, Heidi knew that she had to do something. Heidi and her husband, Mark, who has a background in restaurant management, knew that they needed some kind of system in place to encourage accountability, growth, and profitability, but could not figure out how to do it themselves. After meeting Dave Kirby and realizing the benefits of a commissioned salon structure for stylists and owners—and seeing that there was a proven pathway to get there—Heidi was on board 100 percent.
Read on to discover how Summit Salon Business Center helped Yacht Club Salon grow 22 percent in the first year and tripled sales within 9 years.
The Booth Rental Dilemma
Heidi Casler started out as a very busy and professional stylist who rented a booth. She had taken Michael Cole’s Boot Camp Class in the 1990s when she was first beginning her career, and had immediately put his teaching into practice behind the chair. She grew by leaps and bounds, quickly outperforming the majority of stylists around her. She was so busy being busy that she assumed the stylists around her were equally as busy and professional. When the owner of the salon approached her to purchase the business from her, she accepted.
But it wasn’t long before Heidi was confronted with reality. “I did not realize that one of the current renters was getting ready to start her own salon and was in the process of ‘farming out’ my salon. Shortly after I purchased, I had a mass walk-out. I sat in my accountant’s office one day and she told me that if I didn’t do something quickly, I would lose everything that I owned.”
Yacht Club Salon was a 100 percent rental salon. If stylists were hired on as an employee, it was only under the agreement that they would eventually become a renter. “I really didn’t know any other way to do it,” Heidi explains. “Our atmosphere was one of ‘What’s in it for me?’ We were not a team, and I was desperate to find renters who could pay the rent that was agreed upon in our contracts.”
“Our retail was a mess—a garage sale of sorts—we carried pieces and parts of many different lines (EVERYONE loves Shaper hairspray, so we MUST have that!) and didn’t have a commitment to any of them. All of the renters used their own color lines/products etc., and I was unable to control the quality of those products.”
Ultimately, Heidi felt less like a salon owner and more like a glorified landlord. Despite having a few dedicated renters who were ideal employees, the majority were unable to pay their rent on time, had work ethic practices that were sloppy at best, and education was not a priority. Certainly, no one was thinking in terms of growing the business or even growing their own career. Heidi felt the full weight of owning the business and the responsibilities that came with it. “Although I was making a profit, I still felt run over, tired, out-of-control, and held hostage,” Heidi explains. “As I still strive to do today, I led by example. The problem is that when you have renters, they don’t have to pay attention, nor is anyone holding them accountable.”
Teaming up With the Experts
Heidi was newly married and desperate to make things work. “I was shocked at the financial situation of some of the renters who had stayed on,” Heidi says. “Most were not busy, very unprofessional, and were unable to even pay their rent. I was really in a spot. I had finally filled my stations enough to be able to make a profit, but was still shocked at how very few of the renters actually had a viable business. I was unhappy as a salon owner and I honestly don’t know how long I would have continued on if we hadn’t made such a big change.”
Change came with the help of Kristi Murphy, Heidi’s distributor from State Beauty Supply. Kristi knew that Heidi had been looking for salon business classes and also knew of Heidi’s love for Michael Cole. Kristi loaned Heidi Business Essentials which is part of the Pillars of Profit and Heidi immediately knew that this was just what she had been looking for.
“My initial concern was that I didn’t have any commission stylists,” Heidi explains, “but I decided I would see how I could make the systems work for me. Not long after I received the library, State Beauty hosted a salon owners’ night where Dave Kirby was the presenter. If I had any doubts prior to that day, I was completely sold on attending The Summit once I had a chance to meet Dave and hear him present the Summit Salon Systems ideals.” For Heidi, the timing couldn’t have been better. The Summit was exactly what she needed at that point in her career. The rest is history.
Transitioning from Rental to Commission
The rule at Yacht Club Salon was that all of the renters were “grandfathered” in for life if that was the arrangement they wanted. But Heidi would only hire commission stylists, and if a renter ever left and wanted to come back, he or she would have to come back as commission. “I kept most of the renters at first, but after awhile some began to leave,” Heidi explains. “I believe it was because there was a major positive shift in our culture which naturally weeded out people who may not have the same mentality. Ultimately, I was perfectly okay with seeing some of them go.”
The Level System played a big part in the hiring process and in finding career-minded stylists. “It takes the emotion out of it!” Heidi explains. “The right service provider can see the benefit of such a system and is excited to work on goals and to grow their career. This is the kind of employee I want working in my salon company. Simply showing the level system to the candidate during an interview can help eliminate or move them forward right away based on their reaction to the commitment that it will take.”
Once Heidi was able to hire the right kind of stylist, implementing the Summit Salon Associate Program took the guesswork out of training. “Training the right way was hard in the beginning, because it was really just me who could train and the focus wasn’t as great,” Heidi says. Now, we are finally at the point where I believe the majority of our service providers will come from our Associate Program. The ones we have on the floor now perform at a different level than the new hires who have not had experience or gone through such a system.”
With the recruiting and training on track, another major hurdle that Heidi had to overcome was committing to a product line. In the beginning, because the renters used a wide variety of color and styling products, the retail space was all over the place. “Marrying myself to a distributor and product line allowed me to have greater education, provide better promotions, and for us to have something to stand behind,” Heidi explains. “A belief system is beautiful for all of us. Our commitment to Redken and Pureology allows us to give the best products to our guests and for our team to be experts in what we recommend. Even our four renters use all of the same products so it is now nearly impossible to tell the difference between the commission and renter stylists.
“I have always had an amazing relationship with Ron Luke, his daughter Kristi Murphy, and State Beauty,” Heidi explains. “They have been my partners since day one! That being said, since I now spend a LOT more money with them, it has opened up our relationship in all new ways. Kristi is instrumental in helping me plan my yearly promotional calendar as well as all of the in-salon education that we offer several times a year. Kristi also plays a big part in keeping the salon running on budget and maintaining inventory at proper levels.”
Through her own experiences as a salon owner, Heidi has discovered the dramatic difference between owning a salon with a commission-based structure with employees versus an all-rental salon with independent contractors. Employees have an authentic sense of growing together, forming a true partnership, and Heidi is happy to note that the renters who were grandfathered in have embraced this salon culture, elevating the level of customer service even more.
“There is no comparison to be made,” Heidi explains. “Our salon now offers an experience, whereas before we all just kind of showed up! We now have an amazing team spirit and we pride ourselves on being our best in customer service, guest satisfaction, supporting one another, growth, dedication to education, and providing an excellent work place. One of the defining moments for me was when I had a stylist who was just about to level jump, but was going to be just short on her retail numbers. One of our team members offered to give up her retail sales for the month and GIVE THEM to the other stylist so she could level jump. Wow! That moment brought tears to my eyes and really reinforced that I had made the right decision for all of us. Something like that would never have happened prior to The Summit.”
Additionally, Heidi can now track client satisfaction. “Before, as a rental salon, it was impossible to control any aspect of the quality of work that was occurring my salon,” Heidi says. “Now, because of systems that we have in place, we are more able to touch base with our guests and see how well we are working for them. The response that we get from our guests is very positive, as they not only love to see a well-run salon with fantastic service, but also really appreciate all that we do for our employees in terms of education, career path, and growth.”
Are You Ready?
If you are craving the chance to experience these same dramatic changes in your salon company, Heidi has this advice for you: “Don’t think about it any longer! Just do it! It is such a game changer in the salon industry. Even if you decide not to use regular consulting—which I recommend that you DO—the knowledge that you will receive from attending the Summit is priceless.
Are you interested in implementing proven salon business strategies into your salon company? Click to view upcoming Summit Salon Business Center programs.