Do Salons Even Need AI? (with Conrad James)

Salons are one of the last places people expect to hear AI mentioned in a positive sentence. In an industry built on personal relationships, is there even a space for AI at all? Should there be? Here to help us answer is Conrad James, the co-founder and CEO of Callpad, which is an AI receptionist built for the beauty and wellness business. It answers the phone when the team's busy and books clients into the salon software. Let's get him on the show, shall we? All on Build Your Salon Conrad, welcome to the Build Your Salon podcast. Hi Phil, thanks for having me. Good to see you. It's an absolute pleasure and it's a pleasure on lots of levels. Firstly, because I haven't had a chat about AI for a fair bit of time now. And that's been deliberate, actually, it's because things are moving so quickly that I can't keep up in a way that would be useful to tell other people about it. So it's lovely to have a guest who's kind of on the cutting edge of this stuff. But before we jump in, why don't you explain a little bit about who you are and where you've come from? Yeah, absolutely. And you know what? Sometimes it's good to take a break. Things are moving quite fast. So I agree with you. But yeah, so we built Callpad. We decided to focus specifically on beauty and wellness because it's just one of those things that you've been in a salon or a barber shop and you hear the phone ringing a bunch. It really came about in COVID when we were helping local businesses and they were all locked down, kind of doing the home delivery service side of things. And, you know, people really want to support local people want to support small businesses. But something that is very difficult is that customer service side of stuff because you have the person who's delivering the service is also the client facing person. So you have a lot of different jobs. Different jobs. And we noticed that people could get clients in the door. They could service them when they're in front of them. But when that extra call came in, they would just not answer. And we're doing home delivery. So somebody's delivery didn't show up. They would ring them. They wouldn't answer because they were out on the delivery. And then they would say unreliable service. I can't get an answer. So that kind of morphed into the first time I saw the voice demo from ChatGBT. I put in a service list and started talking to it. And I immediately said, wow, this is something that can at least cover the gap while somebody is busy working on their small business. Much better than voicemail. And a friend happened to have a hair extension salon in LA at the time. And we were talking, you know, where should we go with this? And they were really excited about it. So we jumped on it. And a year and a half later, we're here on your podcast. And I'm really interested in that bit of the journey because when I start thinking about the different types of service business that something like this could support and help, I kind of feel like salons are going to be the most resistant of everybody. And it kind of feels like you've chosen the toughest vertical of all the service businesses to try and bring something in. So was it that personal connection with a salon owner that made you want to go in that direction? Or is there something else about the industry? Yeah, yeah, it was really that personal connection. And just seeing that it was such a big pain point for people, you know, like, you can help a lot of different industries with this technology. And I mean, you can see it popping up in a lot of different places. But helping out a friend to start was the most important thing. And then after that, you start to realize, yes, it is a tough problem. But you know, first of all, it's good to work on a tough problem, if you're going to spend your time on something. And there's also a lot of great ways that we can support people with it, because we have customer history, you know, what the services people have regularly are, there's actually a lot you can do. And if you break it down into small steps, what seems like a scary problem, you just keep building and building on it, as we have for the past year and a half, you can actually deliver a very good, reliable service. I always say it's like online booking with your voice. It's never going to be, you know, as good as your receptionist that's been there for 10 years. But it can support that receptionist and help them be a front of house person, rather than just a busy person and really deliver experience. So I thought it was a good place to start. And we've, we've enjoyed it so far. I want to dive into the business side of things first, so start to talk a little bit about our salon owner, and maybe some of the resistance that you might have faced, and some of the answers that you would give when people have those tricky questions. And then after, I'd like to unpack what the client reaction has been to service being delivered in that kind of way. Because I think there's kind of two sides of the coin. And I suspect a lot of what we're going to talk about with the client will unravel some of those preconceived ideas that we're getting on the salon owner side. When I talk to salons about AI, some of them are using it, but really just in a kind of backwards and forwards chat GPT, you know, help me with this email kind of way. Some are fiercely against and don't see how something like AI even has a role in an industry that's built on personal relationships. And some are kind of, maybe even struggling just with the salon booking software, let alone something that sits over the top of that. So have you got an answer to all of those? That's a big call. That's a lot of questions at once. I think it is healthy to have some skepticism, because we've all seen AI implemented in ways that doesn't work. And I think a lot of people are figuring out, you know, how does it help me? Or how is it just a shiny thing that maybe isn't that useful? And it makes sense, you know, you've opened a salon, you've started a business for however many years, and now you're deciding to put, you know, some form of automation or robot in front of your clients that you've spent years building that relationship. And you think, how is this going to affect that? Are they thinking that I'm just saying, No, here's kind of, I'm going to stop talking to you? And here's just this barrier between us. And if it is a barrier between the salon owner and their clients, you should not use it. Like, simple as that. But it really is a tool where for the salon owner, it lets them focus on the people in the salon. And kind of deliver a world class experience as we have more and more technology come into the world is that human touch and having a peaceful experience when you're in the salon is, is of the utmost importance. And seeing it as a tool rather than a replacement of someone. When we started this, I thought we were going to be for salons that didn't have any receptionists, because people who have receptionists, they're, they're fine. But actually, the salons with receptionists do almost better with this, because they're so busy, they have receptionists, because somebody's coming in every few minutes. Every few minutes, and it allows the people who are working in the front of house to make a decision who's more important at this time, do I have time to answer the phone? You should always answer it if you can. But if it's between that or making sure somebody feels welcome when they come in, and not as if your attention is divided, it actually enhances the experience. And for the client side, I mean, like I said, look at it as a tool. And you have to tell your clients, we are using this, so that we can give you a reliable experience, even when we're not around. And that's why I say look at it as online booking with your voice. You are going to have some pushback. But it might just be usually a few people who come in, say they don't like AI. But when we look at the numbers, voicemail gets answered about 20% of the time, or somebody will leave a message 20% of the time. And with Callpad, people are getting 70 to 80% of people interacting with it. So out of 100 callers, you're serving 50 more clients. People are willing to speak to this more than a voicemail. And from that, if you're serving 50 more people out of 100, and one in two people come in and say, I don't like this. I think it's just a bit of education of a new technology. And that's, that's fine. That's part of business, you know, it's making the changes. There's so much in the answer that I kind of want to unpack. The first part I'd like to explore with you is the changing role of the reception desk and the receptionist and how that can be enhanced using technology. It's interesting to me that you say it seems to work better where you've got busy salons that can justify a receptionist. It feels like you're not saying this is going to replace that role in the salon. Can you speak to that for a sec? Yeah, absolutely. It's really a tool. It's a team member. Salons that don't get along with something like this are the ones that come in and look at it as if it's going to be a magic eraser for all of their calls and all of the things. It's going to handle a lot of things and make you more revenue and book in more clients. But it's just like a team member. If somebody calls in and says, hey, I had my hair colouring with Nicola yesterday, and you talked to her about that, that's when it hands off to Nicola. You're never going to have an AI tell somebody what Nicola could tell them. So you have to look at it as it helps delegate when it can help the client in front of them. It does that. But you have a teammate coming in that can handle workload, but it also delegates to the team. So I think, just understanding that it's not this magic eraser and it's not this thing that's replacing your client experience. It's another kind of tool that you can use for it. And it feels like what you're saying, the role of AI in the salon is then almost to allow team members to focus on the guest experience, rather than being distracted by the phone ringing in the background or worrying that they've missed three calls in a row or whatever. So it allows that kind of presence with the client. Have I read that right? Yeah, absolutely. Just not having that stress. We think about all the things that we do as business owners to make sure a client can reach out to us, whether it's a first time client or a returning client. We do all this work — posting on Facebook, on Instagram, making sure meta ads are running — but you're doing a lot to make sure clients reach out to you in the first place. And so if you're extremely busy and you have somebody in front of you, and somebody's walking in and the phone's ringing, you have this stress that you've done 99% of the work — is that a new client on the end of the phone that you're about to miss? You can use that as a backstop to make sure all the hard work that you've done is actually being defended. You're not a leaky bucket, you know. Hmm. I'm kind of interested on the client side and I'm putting you on the spot a little bit. I don't know whether it's the kind of stats that you would have. There's a portion of everyone's clientele that just want to book online. Yes, myself included. If I come across a salon or a wellness business that doesn't allow online booking, I won't go there. I don't want to pick up the phone. I'm not interested in having a conversation with that. I need their calendar next to my calendar, and we can make shit work. Mm-hmm. So we've already kind of taken care of a slice of the clientele. Who are the ones that are left that are comfortable with this? What did they look like? Mm-hmm. Yeah, well, because we talk a lot about this — who's willing to speak to AI? Who isn't? Is it better than voicemail? And the thing is, people are ringing in. Sometimes they've even checked online booking. They're ringing in to change an appointment, check their appointment, or speak to somebody. The first two, we can help with those. But then we can also hand off to the team. There's no rhyme or reason, really, because we put it into salons where we think this is going to go really well. We put it into one, I don't know if this is going to work because they have an older clientele. Sometimes the older clientele loves chatting with it because it'll go on and on with them. Or they just love the convenience of, even if it's closed in the morning, when is my appointment later today? They get that answer. And almost every account as well. When people talk about not liking AI, people don't like a bad AI. If you have an experience with a bank, you put the phone down because it can't answer your question. But when people start to realize that this can help them and answer their question, when someone's not available, call volume goes up over time. And people also, we have the interaction rate. So people will start between 60 to 70% of people interacting with the AI. And over time, it can go up to 80 to 90% once they have their first good experience. It works in the other way. People have a lot of bad experiences. It's kind of the wild west of AI right now. So the biggest resistance from clients is thinking, oh, no, I've called my bank. I know how this is going to go. And then we see them maybe ring back sometimes three or four times because they can't get through. And then they say, okay, I'll try this. And then once they try it, the next time they ring, they're using it immediately. I think there's some really important stuff in there. I think the first thing, and I kind of want to make the distinction because I've seen a demo with Callpad. I've listened to recorded calls, client calls that have come in on Callpad in a real salon setting. And I've been really surprised that actually the more mature clients are quite happy. And I'm kind of thinking of my mum, bless her, old mother Jackson is 85 now. And she forgets a lot. So she'd be the kind of person who she gets embarrassed because she might have to call back three times to check that appointment. And actually, I think she'd be quite relieved that it's a machine answering because she doesn't feel that embarrassment. She can call 20 times if she wants to. It's not an inconvenience to anyone. It's not embarrassing for her anymore. But I want to draw the distinction with the banking thing, because I think for years and years, we've had these automated systems, but that's not what we're talking about here. We're not talking about press one to make an appointment, press two to cancel an appointment, are we? We're talking about something much looser, much more conversational, much more flexible. Exactly. And kind of, you're not pigeonholed into something as well. I think it's important, because we're talking about the way we always set it up in the salon is it rings four times, five times, maybe in the salon, and then we cut in before where the voicemail would be. So the person always has an answer or a chance to answer before. And I know you have a different opinion on this, Phil, maybe how it should be used, but then it will pop in and say, hi, this is, you know, we're not trying to trick people into thinking this is a person, even though sometimes they think it is, it's the automated booking assistant. How can I help? And if you want to make a quick query, we have all the, we match with the customer number in the system. So we know the history and can easily tell information to reschedule. But if somebody says, I want to speak to somebody, we immediately say, who is it for? What's the message? We'll pass this on. But you can free flow just like you and I are here, converse with it. And it will also be honest and say, what if it doesn't know something. So the biggest learning curve, when we put this in front of people is just to say, speak to it, like you would speak to someone and ask it what you want. You don't have to think of a clever thing or say it very slowly. And that's part of the learning curve is as these systems get better, that it should be a very comfortable experience. I think it's, while you've been talking, I think there's a few things that have kind of popped into my mind. The one is, again, the difference with something like banking is, it's the security side of it. Banking, quite rightly, you have to go through a lot of hoops before you can actually get to the stage where you're asking about your account or whatever. We don't have that in Salon. So it's a much smoother process at the beginning of the call anyway. And yeah, there is a slight difference. So the way that I personally approach the Salon industry is that consistency is king. So if it were me bringing this system in, I wouldn't have the phone ring at all. I would have all of the calls answered by AI. Because I think that there's an inconsistency between the experience of speaking to a person straight away and AI straight away. So myself, I wouldn't have the phone ring. And I would make that a kind of a selling point in the Salon is that you're never going to be distracted by a phone ringing in the background. Because all of the calls are taken care of. I think the other thing that we kind of, we divert a little bit, or we differ in opinion a little bit is I personally would be looking to get rid of receptionists too. I think it's, I think it's hard to justify if we get to the stage where the call side of things is taken care of plus online bookings. I think it's harder and harder to justify that role, particularly in smaller salons. Yeah, I mean, I would just say, ideally, like, maybe you can't justify it. But ideally, this is the beginning of the product for us as Callpad. We want people, people always say, how much is it? Well, we like to say, you know, the average salon that we're helping, we'll book an extra 30,000 pounds over a year, some are doing up to 70,000 pounds a year, through the service. And we are doing a lot of work of how to actually fill the capacity. There's a lot more that we can do than it's just voice. So we want people to be paying for the service, not out of their pocket, but kind of a shared revenue that we're helping them get. And I would like to think that we can help increase the revenue of a salon to the point where maybe it's not a receptionist, a front of house or it's a junior, but like, to the point where you can be employing more people because you have more business, not seeing how you can shrink your salon into the smallest little shell of a, you know, service location that it could be. And if we can help them earn more revenue and become much more kind of successful locations, I think that that's a win-win. And that's ultimately where we're trying to get to. We have a lot of other products coming out. So stay tuned. I want to talk about change a little bit. Just in the short time that we've known each other and I've had some very early demos and then obviously I've seen recordings of more recent stuff as well. And things have changed even in that short amount of time. I think it's only about a year we've been, we've been talking, isn't it? Yeah. And I think the thing that has, well, actually two things that kind of stick in my mind and whether you had anything to add on what shifted. Firstly, it seems just much more reliable in terms of recognizing accents, for example, and people that speak at different speeds and picking up on the key. It just seems like the transcription process in the background is so sharp now. It's almost, I don't want to say infallible because that's a very short plan. Still work to do. Yeah, but less and less. And the other thing that's changed hugely is the speed. There used to be a really noticeable lag between a client speaking and the AI response. And yeah, there's still a beat maybe, but it's literally a beat now where it used to be kind of, are you still there? You know, it used to be a couple of seconds at a time, which is enough to disrupt a natural feeling conversation, I think. Anything else that's kind of changed in your time since you've been putting it into salons? Yeah. Um, I mean, so there's an evolution of, I would say objections that salon owners have. So, uh, just to the performance though, I want to speak to that. Uh, the pause length coming down is a great thing, but it's also the variability of the pause length. So when we started, sometimes there'd be a one second pause, sometimes there'd be a three second pause and having that variability, you don't know if it cut off or not. So now we have the stability up. So you have a slight beat, but you know, it's always coming in at the same time. So it creates that flow of the conversation because you can rely on that. Um, and also just our team, uh, you know, we've all seen kind of pop up AI receptionist or voice services. Uh, we've invested heavily in our team. Everyone's in AI machine learning engineer, which makes us an industry leading product in, I would say anywhere, but definitely in the UK for beauty and wellness, just having that all built in house. Um, and then the evolution of seeing it go into salons at first, people are saying it's too new. I don't think this would work for us. Uh, you know, and that was the first six months, um, since we, uh, initially spoken. Now I'm starting to hear, as I brought up, people are starting to experience it out in the wild. And the biggest objection is I had a bad experience with it. So now our responsibility is to say, there are good experiences out there. Would you like to experience a good one? And that's where call pad comes in. Hmm. And I think we've also got to take a little, um, reality check sometimes on technology in that, um, online booking is never a hundred percent reliable, you know, again and again. And I hear stories of, you know, online bookings that didn't come through or cancellations that didn't take it out of the calendar or whatever. There's still errors, even on technology that we're very much used to. Um, Um, and in the same way as neither is a human receptionist completely infallible, you know, people put stuff in the wrong slot or forget to cancel something or forget to call somebody back. Um, there's always that, that margin. And yet somehow I don't expect you to have an answer to it. Um, but somehow people expect AI to be a hundred percent all the time, which is perhaps a little harsh. I think, um, perhaps the standard, the standard feels higher somehow for AI, which I think is maybe unreasonable. There is a higher standard for sure. Uh, people in one breath, they'll say, I don't like it because it's, you know, gonna take over everything and no one's gonna have any work to do. And in the other breath, you know, it couldn't understand the difference between the balayage and the full head color or something, you know, we're still here trying to make the AI reliable for haircuts. Um, I think that it's not as scary. Once you start using it, you realize it can be good at very specific things, but you need to direct it in the right, uh, way so that it will be reliable. I think it's the less you use it, the scarier you think it is, the more you use it, the more you realize it, it's not going to take over, um, in any, in any span of time. I think it's really just a way of, uh, you know, completing work for you. Um, and it's, it's not going to be cutting hair. Well, yeah, I guess that's kind of the, the bit of the market that, um, that maybe we'll never quite convince. Um, I think there's an element to the market that's very much, you know, AI will never be able to cut hair. Therefore, I don't need to look at it. Um, and, and I think my, my argument with that is no, you know, may, well, actually it will one day, but maybe, maybe, maybe not in the next decade or even in my lifetime. But at some stage, we'll get to the stage where AI can cut your hair or certainly robotics can. In fact, I did come up with an idea. I put it in my first book of this kind of helmet and it had vacuum technology where it pulled the hair away from the head and then cut it with laser. I don't know. Dyson can do it for me. It sounds like a good way to lose all your hair. Don't say that. You'll set us back. Honestly, I think it's there. And I think they should put it, you know, those booths where you get your photos done for your passport. I think they should put the hair one next to it. So you get your hair done and then go in and get your photo done as well. I don't think it's going to replace salons. I think there's people that will always want that salon experience, but there's some people who are never interested in the salon experience. They just want a quick haircut. And I think that part of the market could be robotic, could be automated. In my head, there was a kind of a bank of these machines and the stylist did all the consultations and punched a few numbers. Then you take a seat and the robot does the rest. Anyway, I digress. But I don't think AI is going to replace hairdressers or beauty therapists. I've seen the massage robots. They look frankly kind of frightening to me. I don't think that's the way that it's going to be, but I do think you can be replaced by a good hairdresser who understands this shit. A good hairdresser who's not afraid to bring technology in to make their business more competitive, to make it more efficient, to mean that they're reaching more customers more consistently. That's the replacement. It's not the skill. It's the skill plus AI. Does that make sense? Yeah, for sure. I mean, Phil, we, I think regardless if you're a salon owner or salon coach or anybody in the world, we hear them say there's just not enough hours in the day or I'm too busy. Sometimes I speak to somebody who says, you know, too busy to implement this. Well, that's usually when you should be implementing something like this because there's a stress level that comes with owning a business. And a lot of that comes from the things that you should be doing that you can't get to. And now we're in hundreds of locations. We can see every salon, whether they say they miss calls or not, they're getting a handful of calls every day. You put that over, you know, 30 days a month. That's a hundred to 200 calls. And that can either be stressed because you're not getting back to your customers or you're not earning as much as you could. And when you start not earning as much as you could, it starts to affect your mindset. So it's like, how do you de-stress? It's you do have to give up a little bit. You're putting this in front of your customers. It's a little bit of a trust exercise, but if you can get through that trust exercise and we help a lot of people do that, it kind of puts you at ease to know that a part of your business that you used to not have a handle on is now dealt with. And you can reliably feel good about it. When you go home, you don't have to check your phone. While we're building that trust, is the system flexible enough to let somebody do this in a small way first and then build trust and allow it to take on more and more responsibility or is it kind of a one switch we're on and we're doing it? No, no, no. Like there's definitely ways you can tear up to it. And we always let, first of all, we always let people test call and set it up themselves. Sometimes people will take a week or sometimes people will take a month just talking to it to understand how it's going to work for them and get comfortable with it. We're fine helping people through that. and it's like, some people will, for instance, not put colours on there because they don't think, and they don't even do it for online bookings. And kind of just be okay. You can do the haircuts. It'll do the blow dries. And getting the confidence that those are going in the calendar correctly. The other thing we do that a lot of other services can't cover is that it goes in the calendar. It blows people's minds when they say yes, it pops up in the calendar. So somebody who's online booking or a receptionist is doing it. We live confirm it and people know their appointment's in, but what we find is other people say, I don't want to cancel things. You know, we're talking about tearing up to having it be a full service, but we very quickly find people say, well, you know, it can't cancel. So now I have to review this or it didn't book the colour. So now I have to go look at that. And so people kind of, they immediately or not immediately, but pretty quickly start allowing it to do a lot more things because they realise the reason they brought it on is they want help. So let it help you, but you can definitely tear up on it. And yeah, let it kind of help to the degree that you want, but the more you, the more you trust it, the more it can help you. I think my overriding message around this is, I don't think even those clients who don't like it, even those clients who don't want to talk to AI, even those clients who are just resistant to the whole thing. I can't imagine that's enough for someone to stop going to a particular salon. But I think if you missed my call three times in a row or failed to return my call, that might, I think that's a useful bit of perspective. I think handling calls badly, handling reception badly might be enough to lose a client, but I don't think AI would put people off somehow. I think the danger is having business die in silence. And some people just like to not, you know, the AI will get more responses. So some people have said, you know, I didn't know that I missed calls before, so it wasn't a problem. But in that sense, if that's your viewpoint, then you're willing to have business walk out the door. And that's a personal choice. But I think that brings on a lot of challenges in itself. So it's one of those things, you can let those calls go, and you don't know you're missing business. Or you can deal with your business and make it better and grow it. And it's a personal choice. Love it. Thank you so much for that. And because you've given your time so generously, you are allowed to do a blatant pitch for your product. How do people keep in touch? How do people find out more? Yeah, absolutely. I mean, I always encourage people, I think CallPad is a great service on biased opinion. And I think it's more expensive to not try it than it is to try it out. Because really, if it works for you, we bill month to month. So if it doesn't work for you, no hard feelings. But if you don't try it, and you realise, you know, I'm actually missing out on 3000 pounds of bookings every month. That's an expensive mistake to miss. So you can always email me directly, if you'd like and mention the podcast, whoever's listening to this, you can email me at Conrad at callpad.ai. That's callpad.ai Conrad with a c. You can visit us at callpad.ai. Try out the product. And yeah, we'd be happy to have you. I think it'll really help you guys out. And we're excited to show you we've been working hard on it. We take pride. The best thing I hear, and we hear it more and more often now, is salon owners saying this is the best investment I've ever made in my business. We've heard that a few times, we want to hear it a few more times. That sounds like the perfect place to wrap things up. But I always finish these episodes with three little questions, just to give us a bit of insight into the way you think about business and the industry. What's the best piece of advice you've ever been given? Yeah, I think it almost maybe juxtaposes to what we've been talking about. But somebody said, and I think it's floating around out there that, you know, you'll die with unread emails in your inbox. So, you know, try and enjoy the journey. There's always stuff to do. Try and get as much of it done as you can. But just remember, there's always undone tasks. And try and enjoy what you're actually doing in the moment. That's a great piece of advice. If you were going to leave a piece of advice behind for someone following in your footsteps, what would that look like? Specifically with tech and mixing industries, tech and very personal based industries, it's important to have sympathy for your client. It's easy for us to say people don't understand it because it's new or scary, or they just don't know how it works, so we don't have to listen to them. But being sympathetic to people, usually they're right, because they're the ones you're helping. You're the ones you're helping. If somebody's not getting it, you've probably not explained yourself properly. Even if you're a business coach, a salon coach, or a salon owner, it's on you to clearly communicate and help them get to the point where you can be useful to them. Don't dismiss them. I love that. I was once given a very similar piece of advice. The archer can't blame the target when he misses, which is a really lovely way to put it. And finally, what's the best thing about working with the salon industry? I've always worked with smaller local service businesses, and hair salons are the same. People have decided to take a risk or a leap of faith and start their own business. That's a brave thing to do. But there's a reason why they've done it. Really connecting with people and understanding their story, you know, a mutual friend of ours, John at Lime Salons, he was telling me his story. He started off with just a few seats and up near Scotland. He's now grown to over 50 stylists across three locations. Hearing people's stories and why they do it, and then just seeing how enterprising people can be and affect their local community, you know, He affects three different towns in a small locality. You can create a centre of community for people, and connecting with those people, hearing their stories, and then for our service to do our little part to help them deliver that is a cool thing to be a part of. Wonderful. Thank you so much for your time today, Conrad. Lots and lots to think about. I will make sure all of Conrad's links are in the show notes alongside this episode. So there we have it, my conversation with Conrad from Callpad AI. What do you think? Has it got a place in your business? Why don't you reach out and let me know? My email address is scrolling at the bottom of the screen right now: phil at buildyoursalon.com. I would love to hear your take on this. Just a few short days until I'm coming all over the internet again with another dose of my wise hour wisdom. And until then, take care.