How to Fill More Slots Without Drama with Will Hall and Arjun Saluja

Innovation is the only way our industry can survive and thrive, but that doesn't mean we've got to keep reinventing the wheel every other year. Sometimes it's as simple as borrowing a terrific idea and implementing it in our industry with passion. My guests today are Arjun Saluja and Will Hall, two Ivy League students who have developed Booko, the viral salon software that's poised to take our industry by storm. Let's get them on the show, shall we? Call on Build Your Salon Hey, thanks for having us, Phil. Super happy to be here. You're very welcome to the Build Your Salon podcast. It's a joy to have you on the show, and a joy to be kind of sharing something. Every now and again, dear listeners, your Uncle Phil is proved right, and it's always wonderful when someone can come along and endorse an idea that I've believed in for quite some time, and that's around innovation, and there's a couple of strands to this. The first is, I've always felt that looking inside our industry for novel ideas is a mistake. We've got to look elsewhere. And secondly, that success leaves clues, and we don't, like I said, we don't need to keep reinventing everything. So anyway, introductions first, my dears. Why don't you tell us who you are and where you're from? For sure. My name is Will. Arjun and I both go to Dartmouth, but I was initially from Chicago. I'm the mom, or no, definitely not the mom. I'm the son of a mother who's a service provider. So I grew up, you know, hearing about all the plights of the industry. And as an economics student now, I look at businesses, I think, a little differently than you might if you were actually in the trenches cutting the hair. So being able to pull back a little bit and see the bigger picture, I found some, you know, holes that I really think we can pursue for salon owners. Really happy to do that. Yeah. My name is Arjun. I also go to Dartmouth. I'm classmates and good friends with Will. Yeah. And I'm from the Bay Area, California. And for me, the way I kind of got interested in this is I was a tennis coach and I ran into a lot of the same scheduling problems that like hair salons do. And so kind of the similar issue of thinking about, you know, filling every time slot and how to book and schedule appointments was really pertinent to me. And it was something that I wanted to build for myself. And I realized that the salon industry was suffering from it on almost an even more greater level. And it was it was great to really get into that. I think collectively just exploring the economics of salons has just been really revealing to us as a whole. And we're super excited to offer the insight that we've gleaned over the past year or so. OK, so so you're looking at salons, but you've kind of alluded in the introduction, you've come up with Booko, which is booking software, but you're approaching it from a slightly different angle as a result of those insights that you've gained from the salon industry.

So why don't you dive into that a little bit and explain to people what's different about Booko and the way that you're looking at the industry? So the big difference with Booko is Booko applies dynamic pricing to all of your we call them time slots, all the available appointments that you have. So I you guys are familiar with Uber in the UK, right? There's certainly. Yeah. Yeah. So basically what happens is when there's lots of demand for, let's say, an airplane ticket or a taxi cab, the price goes up a little bit. And when there's not as much demand, the price goes down. And this control is what allows these huge multi-billion dollar industries to optimize their their their systems, because basically what you don't want to have happen is you don't want to have so many. Like, let's say we're an airline. Right. And we have 50 seats going out on a plane and 80 people want these seats. We know we're going to have to turn 30 people away regardless. So we might as well charge the 50 that are actually going to sit on the plane a little bit more. So we make sure that we get the the exact people that want those plane tickets the most and everyone that overflows that we can't fit on that plane. We should probably offer them a discount so that they rebook during, you know, Monday flight, a Tuesday flight, a Wednesday flight, as opposed to that weekend. And in doing so, now we see all 100 clients. Initially, we were only going to see 50. So this plane analogy isn't all too different than the salon. Right. A lot of salons are telling me, you know, we're having overflow. We're telling people, you know, just book two weeks ahead, book three weeks ahead, as opposed to squeezing them into the time slots that don't fill up perfectly. Yeah. And I think it all really comes back to the idea that, you know, as a service provider and as a salon, you want to make sure that you're filling as many slots as possible. When you're not seeing people, when you're not taking appointments, your time converts to zero dollars an hour. So say like say like you're willing to sell an appointment for 50 dollars or 50 pounds. If it costs like 30 dollars is like a baseline. If you don't sell an appointment at zero, it doesn't matter what it is. And so our goal is really to help providers, you know, make as much money by filling out all of their spots because their time is so valuable. And that that's really the issue that we saw. And I think this is an issue that is super pervasive, you know, with an airline seat, like if they don't sell the seat goes away.

So they apply pricing to kind of, you know, incentivize customers to make sure all their seats get filled. There's no reason that that shouldn't be the same with like a salon seat. And that's kind of how we viewed, you know, creating Booko and kind of a gap we saw in this industry that we really wanted to. Yeah. And the thought is if you're renting the salon, right, and you're paying someone to sit at the chair and paying a stylist to sit at the chair, you better have a customer that's sitting in there, whether they're paying your full one hundred twenty dollar ticket or if they're paying one hundred fifteen or one hundred dollars. You might you need to have somebody in that chair at all times. And by allowing for some flexible pricing, which has never been done before, except in almost every other industry besides the service provider industry, you know, this could be such a lucrative tool for stylists. So super excited to bring that to the table. OK, so so just to kind of really clarify what it is you're saying, there's almost kind of two two parts to this equation. The first is that we've got the opportunity when there's high demand on certain time slots to increase our profits by by changing the price dynamically. Yeah, correct. And then the reverse of that is to make sure that we're increasing utilization, making sure that we've got very little downtime where maybe discounting some of those less popular slots or those last minute slots. Yeah. And I think the huge issue that like if any of your audience members are listening that we would want them to connect with if they have the issue is you we call them rushes and dead zones. So you'll have times usually these are your weekends and nights where things are so ridiculously busy. It feels like chaos. It doesn't feel sustainable. You're getting a ton of appointments and maybe you're even turning people away. Right. You're like, hey, man, like their book. Come back next week. You have that. That I mean, that's the better of the two problems. And then you also have the dead zones where it's like, you know, it's Tuesday morning. It's Thursday morning. No one is in the salon. It's, you know, midday. This is not an efficient model. Right. You want consistent demand throughout your entire week. And by doing so, not only will you take the stress off of yourself, you're actually going to see we found between 50 to 80 percent more clients if you can utilize the whole week. So, I mean, even when I just float that number out, it seems pretty ridiculous that you have, you know, at times multimillion dollar franchises that still aren't optimizing to see their whole calendar. And, you know, it's a piece of technology we're excited about for sure. So just to reiterate on that statistic then, so it would seem 50 to 80 percent more clients by using something. Yeah. I mean, obviously, obviously I'm cherry picking some stats that have worked well for our clients in the past.

Sure. But the idea is you have two or three days that are usually really full and most clients aren't filling up Monday through Thursday virtually at all. If you really make that shift, you look at the hours that they can save per business and, yeah, you'd be able to fit, you know, like another, you know, half of your client list in again during that same week. So I think the big thing here really is that there's no current incentive for customers to book during these off peak times. You know, nobody wants to come in the middle of the work day. Like if you're a student, nobody wants to go and skip class. And, you know, if all your all your slots are priced the same, you know, you look at the schedule and you're like, OK, like I want to go when I'm off. Right. I mean, it cost me the exact same. And I mean, that's that's great for you as the customer. If they're all the same price, you get to choose what time works for you. But it's not so great for the salon owner because they're not fully reaching their utilization. And that's kind of where it comes into play is that it's kind of a win for both the salon because you get to, you know, fill all your slots and it's a win for the consumer, especially if we're talking about reducing, you know, the slots that are going to perish. It's a it's a win for the consumer because, you know, they get to save a little bit of money, they get to feel good, you know, I get to come in for a few bucks off. And it really it really is a truly win win situation for everybody. So I guess my next question then has to be if we're looking at, you know, this this pricing models been in all sorts of transport for a long time. So you mentioned Uber, you've mentioned the airlines, we've seen it on ticketing for for gigs and concerts and live live events. Why why hasn't it hasn't it been a feature in the salon industry before? What's been missing? Is it that we were waiting for technology to catch up or is there not been appetite for it? Is it been resistance from inside the industry? Why do you think it hasn't happened? I'll give you two answers. The first answer is inside the industry. There's been at least in our talking with certain salons, there's been this notion that, you know, salon salon hairstylists see themselves as artists as opposed to business women and businessmen and whatnot. And that needs to change. Right. If you if you're running a business and you're optimizing for profit, it comes with an identity, too. Right. You need to be able to take economic principles that sound foreign and understand that they were designed for multi billion dollar industries and that those same principles can apply to your business. Right. They are not separate spheres. At the end of the day, you are running a business and applying business principles will always work. That doesn't sound super novel. But in talking with some salon owners, there's a little bit of an identity shift that we're seeing. And it's important to have that happen. Now, I'd also say that perhaps the bigger reason is that margins for a lot of salons are really slim.

So the idea of discounting slots that, you know, are already, you know, you look at the year over year cash flows for these businesses, like the margins get slim. Right. But what we've done is we've actually passed the we don't charge a subscription. We pass the fee to the end consumer. So basically, Phil, if you were to buy I'm your stylist, you buy a haircut from me for, you know, let's say a hundred bucks. You're going to you are going to pay a hundred and one dollars. Booko keeps the one dollar. I get the hundred. Now the numbers there don't work perfectly, but you get the idea. So by doing that, all the added fees go to the end consumer. Right. So your margins stay protected, which is something that no other software has done. They've always done either a fee that you, the stylist, you know, get hurt by or a subscription. So by making that change, that has has kind of unkeyed us to protect the margins. And as I mentioned, just coming back to the first point, you know, show these, you know, artists that they can also be business women and use the same tools that big businesses use. Am I missing anything? No, it sounds really like it encompasses everything. And I think the last thing I'd really want to just touch on to add on to Will is that, you know, a lot of these people that are sole proprietors simply just don't have the bandwidth and they simply don't have, you know, a team of data scientists working to optimize their pricing. They don't have any mechanism to do that right now. If you look at like Uber and airlines, they have entire divisions of like revenue management and like yield optimization teams. And, you know, there's no mechanism for salons like in the past, like 10 years, but now there is to kind of have like a team of people looking at your schedule, looking at, you know, your history, you know, external factors of like, you know, how many slots you have left, what times usually aren't as good and kind of figuring out, you know, how do we, how do we make sure we get all of these slots filled and not just 5 p.m. on a Friday? Yeah. And Arjun seriously isn't kidding. We've been talking to some of the people at Uber in America. They have like hundreds of us. Like, it's just like, like a field of, a field of data scientists just ripe for the plucking. It's kind of insane to see. But yeah, so yeah, I think that would answer the question. So we've got that initial resistance. You talked about that shift in identity as far as the salon owner is concerned. I'm guessing from the client point of view, if we look at those two sides of the equation, I'm guessing not many, not many of our customers are going to have a problem with being offered a discount for certain times or times or days. Have you seen any resistance in the other direction when we talked about, you know, premium pricing on those more popular slots? Has there been any kickback?

Yeah. So it is, and I don't mean to put the ball awkwardly in the salon's court, but you need to know your clients, right? For the clients that can implement what we call surge pricing, that's where you put a little fee on top of, on top of the service. You need to know your clients, right? Like if they're what we call price sensitive, meaning small adjustments in price can make a really big deal for a client, I would not, I would stay away from the surge. But if you know you run a luxury salon and all your people are coming in and the question isn't, can I or can I not charge them more? It's how do I do this and justify it? Which we've heard from a lot of salons like they're like, yeah, my clients would probably pay more for this. I just don't know how to justify, you know, an increase after increase after increase in my working rate. This is a really good idea because now you can charge them for convenience, right? And if you have someone that, you know, you can tell your clients are a little bit more affluent and they have that money to spend, you say, okay, you want the Prime Saturday spot? Well, three other people want it. So if you can pay five bucks more, I can slot you in. And that feels like an awkward conversation to have, but not when the software does it for you and all they can see is that, you know, it's going to cost $15 extra, 15 pounds, excuse me, to come in during a certain time. And I think, I think one thing that we've also really heavily researched and have heavily like talked to end consumers about with dynamic pricing is transparency. And so there's kind of, there's, there's the surge like multipliers and then there's the off-peak discounts. And I think the off-peak discounts are not very controversial. I think we've already established that kind of, it's kind of a win-win-win. And with the surge, it is a little more touchy and it is on a case-by-case basis where like, you know, people don't want to be charged more. That's just a fact. And you feel like you feel, you feel like, I mean, you can imagine a situation where you'd have like, you know, a regular of your salon and they might feel a little, you know, even offended that they're getting charged more for their haircut when they've been coming for like the last 10 years. And so it is really on a case-by-case basis. And one thing we found from researching this so heavily is transparency. So all of our like prices that dynamically change, they come with a short explanation as to like why that happened. You know, we've, we've realized that when the end consumer sees, oh, this price is discounted because it's an off-peak time, this, this price is discounted because, you know, it's a last minute sale. If this price is surged because, you know, the salon provider doesn't usually work this hour, but was willing to come in to serve you anyway, you know, they might sort of understand. And I think that's at the core of dynamic pricing where if the customer, if the customer understands why the price is dynamically changing, then they really won't have as many complaints because, you know, they, they understand why.

If it's kind of a black box where the price is just constantly changing, that's not good customer user experience either. Like they, they don't enjoy looking for the slot. They don't want to be always on the last like end of their needs. So like you kind of have to balance, you know, the wants and needs of, of there's, there's two customers here. There's, there's a service providers who are looking to, to, you know, win and make as much money. And then there's their clients. So you kind of have to, we had to keep the needs of both of these people in mind. I think there's some, there's a whole load of points that have come out of it from, from what you just said. The first is that I think the big difference and what I would emphasize if we compare and contrast with something like an airline is an airline doesn't have a standard price for a ticket. Sure. All, by definition, all of the tech, all of the tickets are dynamic. So we don't know, you know, if I was going to fly to, to come and see you in California tomorrow, we don't know what that ticket should be. Should, should, I'd love to. I don't know, actually, I'm not really doing the States at the moment, but we don't, but we don't know what, what that ticket should cost, you know, and then because the way that dynamic price, but that's not going to be the same for salons, is it? We've still got our standard tariff price for, I guess, the bulk of our slots. And then we're talking about those less desirable slots and maybe that, that surge pricing model that runs alongside that. Yeah. So I think that, that, that's a, that's the really big difference. Yeah. And I think the other thing that I would point out is if we can see an increase, I mean, you talked about kind of 50 to 80% more customers being seen. And yeah, I get that's kind of best case scenario, which is, you know, I understand that. But if we can increase utilization in the medium term, we're not looking at hiking our prices as much as we have been maybe over the last five years. You know, those 10, 15, 20% increases that we've all had to do to adapt. If we can increase the utilization of our team members, that doesn't need to be so much anyway. So some of this could actually be protecting from, from future increases too. Okay. And that's kind of where we see the, the, the discounts really being a win, win, win, because, you know, when you first hear, oh, you're like, if you're a salonist and you hear us telling you, oh, you should discount your slots.

You're thinking, oh, like why, like why, like I'm already have such thin margins, but when you put it the way you just put it with the utilization, it really makes complete sense where, you know, making sure you apply small, small discounts. These are not eating into your things that, and you can obviously with our, with our platform, you can set, like, you're never going to sell for a loss and you're selling, making very small discounts. And it's really just telling the customer, look, like, I want to help you out. Like, it's kind of a win, win, win. Like you don't have to pay as much and you have to, you get an easier slot. And I think, I think you really hit the nail on the head there with, with, with explaining it on utilization. It's, it can be a means to not have to raise your prices because you're seeing more clients. Yeah, absolutely. When we're doing that pricing formula, one of the big numbers we put in there is a realistic level of utilization. If we can just put that across the board up by 5%, that makes such a big difference. Okay. So I'm sold on the idea, but we've still got some selling to do as far as our salon owners are concerned. So how complicated is this for, you know, let's say I'm sold on the idea. But, you know, the thought of, you know, putting something like this together is really daunting to me. How much work does the salon owner have to do? How much time does it take to, to train this model on, on my business? Yeah, great question. So, you know, the first thing that I'll say, it's kind of tangential is the software is free. And Arjun and I said it, we have a team that helps with this, but, you know, our team will set up every account for you. So it usually takes, what do you think, 48 hours? Yeah. Maybe a little longer? Or wait, for what? To set up an account for a client? We can set it up very, very quickly. Like, that's not an issue at all. We've done a lot of them at this point, so it's kind of routine. To train the model is, you know, it's actually funny. Arjun had a funny coding moment where it actually only takes half of a second. But if they were to do it on their own, we make it look like it takes 10 seconds so that you could see, like, the machines. We wanted to create the, like, the fact that there's something really cool happening. But, yeah, the models get trained really quickly. We know exactly the type of data that we need. And it trains itself as time goes on, right? So as clients book more appointments through the app, it gets smarter and smarter and smarter. Or at least it will be smart. Yeah. So you don't, so there's two things here. Like, first of all, like, with the model, you want to, we have you as a salon owner tell us, you know, what times. Like, we walk you through, like, a little bit of, like, kind of a questionnaire or survey where you kind of tell us, you know, what you think your slower times are, what your sensitivities are for, like, your different pricing, et cetera. Kind of just, like, very simple. It takes two minutes to, like, go through and understand. And we can start, like, you know, dynamically pricing things, you know, off the bat.

Based, like, if you know that you're not selling out your Monday mornings, you can indicate that and say, like, look, these are my off-peak times. So that's, like, kind of the first part of it where you tell the model, you know, this is what I think. But we all know that you kind of don't know 100% what you don't know. So the model will then also learn as time goes on, you know, you tend to not sell these slots. You tend to do oversell these slots. And so let's dynamically price these so we can fill everything. Yeah. Yeah, I'd say the simple answer is it's very easy and we've gotten pretty good at it. The first couple were harder, but, you know, now that we know this, we help clients through it all the time. So, yeah, we like to be part of that process as much as possible and makes things go pretty quickly. Okay. And then I have one clarifying question on the discounts. So you talk about a small discount. Typically, what kinds of discounts are salons putting in place to market those slots? So the way it works is you put in, like, you know, your baseline price. So let's just use an example, like $100. And then you put in the lowest price that you would accept. And obviously we tell you guys, and this is very simple, but we just want to make sure you don't want to put in a price that's lower than, like, what it costs for you. Like, you want to put in a price where you're comfortable with. So let's say that's $90. Then using, like, we basically model how much demand we think you are going to have for that slot. And your price will fall somewhere between, you know, the two kind of, you know, the ceiling and the floor of what you put. And so, like, for example, if it's, like, a Monday morning, the slot might be, like, $96, for example. And it'll show up all nice and green, you know, 4% discount. And it'll incentivize customers to do that. And, you know, it's just $4. But as a customer, the customer is really incentivized to think, hmm, I'm getting a really good deal here. Let me see if I can make this time work. Exactly. And, I mean, you look at the economics of two things here. And I don't mean to go down a rabbit hole. But something that's really important to consider is also the lifetime value of a client, right? If you're getting a new client in the door with one of these discounted slots, let's say, like, someone hasn't looked at your booking page yet. They see that you're offering a discount. They need to walk in, right? That's where the discounts also really come into play. Getting a new face in the door. I mean, I'm not saying anything your clients don't know already.

But getting a new face in the door, I mean, that could open up so many months and years of regular business. And you look at, you know, it's not really just losing $4 on this one appointment. It could be getting a client that then pays full ticket for years to come, right? So that's definitely something you want to keep in mind when you look at the economics of it. And then you've obviously got some experience now. You've got some salons using the system. So the numbers you're talking about, you're talking about like a 4% discount, 5% up to maybe 10% discount. When does it start having an impact? How much of a discount do we need before we start seeing that shift in behavior, do you think? This is such a great question because it shocked us too. I'll give you the answer in a second. But in developing this, we tried so many different things. And what we found is it really doesn't matter. And now, Phil, you'd be like, no, of course it matters. You've got to offer a big discount if you want clients to come in the door. But really what we're doing, and I wish I could show you a demo, but in any event, we just highlight the slots that we're going to discount in bright green. And it draws so much attention to the slots that are actually discounted. Clients aren't looking at how many percentage points they're saving or how many dollars they're saving. They're looking at whether they're saving money or paying full price. And when it becomes that binary, it isn't a question of how much money am I saving. It's a question of am I saving or not. And in making it like that, you can sell a 5% discounted slot at a 400% more focus rate on that appointment. If there's a list of 10 appointments and one is green, the clients are going to look at that green slot so much more than any of the other slots. And the discount itself ends up playing a part of the picture, but not nearly as much as you might think. So it's interesting. You see the impact pretty quickly. I'd say once you cross the 5% to 10% mark is where most of our clients like their slots to be. And they find that that's an incredibly lucrative model to have it as such. I love it. The one thing I will kind of reemphasize though, which you kind of skimmed over, is that this software doesn't cost anything. No. No, it does not. It does not. And, you know, it's really nice because you hear these salons that are really getting gouged by expensive subscriptions or usage fees. We don't do anything like that. All we ask at this point is that if you like the software, you pass it to your friends and help us, you know, get the viral effect that we've kind of been happy to have at the beginning. So, yeah, it's a pretty good model for people, I'd say. Sure. So you're making the business viable through the booking fee, which is then passed on to the customer. And just to clarify, that's on every appointment that goes through the system? Yes. Not just the dynamically priced ones.

Yes. And I think this is really an important distinction because we only make money when you're selling slots. And so we have a vested interest in the success of all the salons business. Like we, it costs nothing. You as a service provider will never have to pay anything to us out of pocket. And we only make money when you make money and it doesn't cost you anything to get on. And at the end of the day, we've done a lot of, you know, talking to the end consumer as well and seeing if this, like, you know, small fee at the end is something that they'd be sensitive to. And they really aren't because what they're doing is they're paying a very small premium for the option to save a lot on a specific slot. So they're paying a small fee for the, you know, opportunity to, you know, save a little bit more on a dynamically priced spot. And when people frame it that way and they're, you know, you know, like Will just said, instead of thinking about am I going to buy from this appointment or not, they're going to think, you know, am I saving on this appointment or am I buying a normal thing? Like that kind of reframing really, really, really works. Yeah. So I think crystallizing what Arjun's saying, if you have the opportunity to save 10% on, let's say, three or four time slots every day and you end up choosing a slot that isn't discounted, you don't mind nearly as much as you think paying an extra 2%, right? Because you had the opportunity to do that saving and that choice consumers really value and they like that a lot. So the 2% fee in a world of fees, you know, kind of get, I don't want to say swept under the rug, but it hasn't been a pain point for anybody that we've experienced. Okay. So I want to kind of pull focus away from the nuts and bolts of Booker a little bit if I can. And I want to touch a little bit on, I'm always fascinated when I'm talking to people that have decided to create their own businesses. So obviously you guys are hugely intelligent and very, very capable, but there's something in you that said, no, we want to do this ourselves rather than take this to another salon software company. So where does that drive come in? Yeah, no, I think it's a great question. I mean, maybe Arjun and I can both answer, but I've been, I guess you call it a serial entrepreneur ever since I was in fifth grade. I always like to run the businesses because I, you know, I've always been a home run player, right? I think you take this to a salon software that already exists. I mean, you guys, I guess you don't do baseball out there in the UK, but. Not so much, but we're aware. Yeah. It would be a much smaller victory in that, you know, Arjun and I truly believe that this is something that every other big industry uses except the salon owners.

You bring it to the salon owners, you could quite literally change the industry forever, right? There's no need to, in our mind, sacrifice what great of a win it could be by, you know, playing it safe and going to a salon company. So we're betting on ourselves to change it all. And I think it's something we've always done and, you know, it's worked out for us so far. And I'd say for me, I mean, I kind of touched on this a little bit earlier, but I was, I was a tennis coach and I still am. And I really just wanted to build something that I would use. And I think coming from there of like thinking about, you know, I have full, we have full autonomy here to develop a product that like, you know, really, really works for people. And whether or not like our clients choose to even use the dynamic pricing or not, they still enjoy using Booko because, you know, putting, like if, say we take away dynamic pricing, say you don't want to even dynamically price your slots. If you turn off the toggle, we still believe that we have the best booking software and the best like user experience. Even if your, if your functionality is to, you know, manage your customers, you know, schedule your appointments, et cetera. Like we kind of had full autonomy in those two realms of building like a really beautiful and like really great user experience. And also, you know, thinking about how do we get these service providers to fill more slots. It was good kind of coming from that, from someone who is in the industry and like kind of thinking, thinking about this all the time to think about, you know, what would I build for myself? And then once I've built something that, you know, I would use, what does everybody else need and how can we kind of, you know, iterate on that? And then as far as your vision for Booko's concern, what does that look like over the next sort of three to five years? What are we aiming for? Are you hoping someone's going to swoop in and pay huge amounts of money for it? Or is this your pension? What does that look like? Yeah, no, I mean, no one gets mad in that situation. But I definitely see us, you know, going on this road for a while, right? I can't tell you what I think the ending is. But, you know, we're looking to expand geographically for a reason. Obviously, we're from the States and here we are, you know, talking to a whole bunch of people that I think are in the UK. So definitely doing that for a reason. I mean, you want to get you want to plant seeds all across the world because, again, we really think it could change it all. But it's a good question, Phil. So I don't know what the future entails and, you know, eagerly waiting, I'd say.

So we'll have to cross that bridge later. Okay. And then do you see this being adopted by, you know, is fixed pricing on its way out entirely? Are we going to go down the path of everything being dynamically priced or is it more of a hybrid model? Do we see it in all salon software going forward? What's the future of the pricing model specifically? I think a hybrid model is what we kind of envision. You know, people still kind of want to pay for, like, their standard spot. And we don't see dynamic pricing necessarily as a means to maximize, like, the revenue that you can charge per slot. Like, we don't think it's like, okay, like, I think I can charge, like, 30 cents more on this one. And, like, kind of having it be, like, a random number everywhere. We see it more as a way to balance your demand. And so you're going to have, like, the way we've envisioned it and the way we've approached it is kind of in that hybrid model. So we don't think fixed pricing is necessarily completely out of the door. You know, customers still like, you know, thinking about, you know, this haircut is going to cost $100. Exactly. Like, thinking, like, knowing kind of like you said, Phil, earlier on where you don't really know how much a plane ticket is going to cost. It's kind of a black box in that sense. There is kind of a sense of security in knowing what the baseline price is. And we think that the, you know, salons and the customers really value that. We see the dynamic pricing as more of a means to kind of, you know, make sure the demand across the board is more evenly distributed than it is right now. That said, Phil, I mean, I'll turn the question on you. I think it's a pretty slippery slope when you look at the history of the world, right? You know, airlines and hotels made the change. They never went back. Groceries, at least in the States, are making the change. They have no plans to go back. Like, we have a happy hour. You guys have happy hour over there? Yeah. I mean, bars have happy hour because no one used to come in at 4 p.m. I guarantee you they will never take happy hour away for the rest of the time. So, all these industries that are trying it and loving it, you know, that shift happens and people don't go back. So, I mean, what do you think? I mean, I have a feeling people switch and it works. I don't know why they go back, right? Well, I know what, you know, magic one time. I know what the future would look like for me because, as you know, I'm a huge fan and queen of salon memberships. And it would be the two models together. So, if you want that predictability of spend, you pay your subscription every month and you get a fixed benefit for what you're paying. And alongside that sits a whole model of dynamic pricing. And that would be the two that run together. If you want that predictability, if you want that $100 haircut, then that's on a direct debit.

They work again. Yeah. Yeah. I think it could be really, you know, and that would be the only two pricing models I would have if I was reinventing the salon industry again today. But let's, why not? Let's geek out a little bit. Let's talk about AI and automation and technology a little bit because I feel like the salon industry is trying to figure out how we can let AI and automation in. You know, how it can influence not just our pricing but our operations. I think there's that kind of knee-jerk reaction in that AI is never going to be able to give you a massage or AI is never going to be able to cut your hair. So we kind of can't push it to one side, which I think is a huge mistake. Because, okay, AI is not going to be able to cut your hair, but you could easily be replaced by someone who knows how to cut hair and also use AI. And, you know, because they're going to be more competitive on pricing. We've established they're going to be more competitive as far as marketing is concerned. The operations are going to be slicker. Profitability is going to be higher. So you can still be replaced by AI, albeit in a kind of second-hand way. So if we're seeing this as the thin end of the wedge, then what else do you see on the horizon as far as bringing more tech into salons is concerned? Again, yeah, we've done so much talk about Booker. So I'd love to talk about, like, other facets of AI that, you know, work really well. If I had to walk through the kind of what I call the value chain. So it's like, you know, client doesn't know you and then client is in the chair. I mean, the best way at that client doesn't know you stage, I think, is social media right now, right? You need to optimize so many things. And I talk to service providers that are still building all of these posts by hand, and it takes them a lot of time. Like, they want to make three or four posts. It takes them, you know, a good couple hours. They're either on Canva or maybe they're throwing something together in Photoshop. I don't know. But one of the cool things you can do with AI now is ChatGPT, as I'm sure your audience is familiar with, can now integrate directly with Canva. So I use Canva a lot. A lot of salon owners use that to manage their brand's Instagram. And what you can do is, you know, you're going to probably need a five-minute YouTube video, but you can have ChatGPT generate you 15, 20, you know, scripts for posts. Like, this is how you should wash your hair after getting a coloring. Or this is what to do when you're, you know, in the awkward spot between last haircut and new haircut. You can have all these different scripts. And you can feed it to ChatGPT, pick a base, like, template that you like, and ChatGPT will make 20 different posts that you can upload in five seconds, right?

So what used to take so many different hours as a content creator making these posts, you know, it takes a fraction of the time now. And it's really good because, like, with the 20 that Will is talking about, you can kind of choose the ones that you like. You know, you kind of have a block of, like, you know, I want to, you know, say, convey this message to my consumer, but I can't really articulate it. It kind of, you know, skips over that block because you get to choose from 20. It's like you have a team of 20 people each coming up with their own. And, you know, maybe you post, like, one or two. And you really, really narrow down. It just really expedites the process and makes you much more efficient. And then, Phil, like, you mentioned you're a big fan of ManyChat. So I think that's kind of one of the natural next steps. I don't know if your audience knows about it, but they should figure out if they don't. What you do in these posts now is in the caption you say something like, DM me the word hair, and I'll give you a personalized, like, review of, like, you know, what color would look best for your next hair dye. I don't know. Your salon owners are going to be better at that part than I would. But in any event, you can have it so that any client that messages you the word hair, an AI will automatically respond with, hey, thanks for doing this. Send me a photo of your hair, and I'll review it. And also, why don't you take a look at my website and see if you wanted to come in for a coloring, right? And will any given client convert? No. But if you're doing this for, you know, let's say you go viral, you get 1,000 different, you know, clicks, 1,000 different people DM you, some of those people are going to convert to appointments. And it's all done with AI. The posts were done with AI. The messaging was done with AI. No added time for you. I mean, and you can just kind of focus on being in the chair, right? So there's a lot of cool things that we can do now. Yeah, I love ManyChat. And just for everyone's benefit, if you DM me the word podcast, you will automatically get the link to the latest episode straight to your inbox. There it is. Yeah, that's been there for a long time. That was my journey into AI was through ManyChat. And then as far as the kind of background stuff's concerned, you know, how are we staying maybe more profitable with the help of AI and automation? What could we be bringing in there? So obviously, you know, Arjun and I are going to say, you know, pricing is so important. There are other things that are important. There's an economics principle in running a business that every business owner should know. And it's called lifetime value per client. So it is essentially how much value each client is worth. So let's say you're my stylist, Phil. I'm not worth the $100 that I'm paying for you when I come in for a haircut. But you're making an average and an assumption of how many different haircuts I'll come over over our lifetime of business together, right?

So let's say you anticipate that I'll come in five times a year for the next six years. My lifetime values would be whatever you charge times five times six, right? So it's like kind of how much money will I spend with you over my lifetime, right? So it is so incredibly important for clients to understand that. And once you do understand that, to leverage it, right? So kind of back on the topic of AI, we can set up automation so that every time a client comes in, they're getting follow-up email, you know, right after, follow-up text right after. And then let's say they usually schedule five, six weeks out. On week four, we'll say, hey, I have an appointment in two weeks. Do you want it, right? So making sure that you're consistently setting up systems to make sure every person that saw you once sees you twice and then three times and then four times. That is a huge way to maximize profitability because otherwise, there's another economic principle that is important to understand. It's called cost per acquisition. And that's how much money you have to spend to get a new client in the door. You don't want to pay that if you don't have to. It is always more affordable, as you probably know, to keep a returning client than to go get a new one, right? So it's super important for clients to not, you know, stress so much about how to get more and more people in the door. It's honestly a bigger problem to make sure that you're keeping the people that were already there from the beginning because those are your most valuable customers. Those customers cost zero dollars to see again, right? So you definitely need to make sure you're optimizing for that if the profitability is on the front of your head. Anything? And I think salon owners have been really good at recognizing that lifetime value much further down the path. So they kind of turn around and go, yeah, I'll stay late for that client because she's been a customer for five years. What we're talking about, though, is getting that conversation and that conversion and that equation happening much, much earlier. So we can start predicting how much these clients might be worth, how much we're willing to spend on getting a new client coming through the door and to fix the holes in that leaky bucket. Like in some ways, the first time you see someone is the most important because, you know, it's your first impression. I think that you want to keep them coming back. I know in the salon industry, you want to book them as soon as they walk, before they walk back out the door. Definitely. I think that was something I learned from my tennis coaching business is like the first time is like really where, you know, you kind of learn people, you kind of figure out what they want. It was a big test for me, you know, as the service provider to kind of, you know, put your best foot forward. And there's a time for like the customers to kind of like, you know, figure out whether they want it to continue with you. And then you get into all of the economics that Will just talks about where if you can get them to come time and time again, you know, that's a really important, important principle. Yeah. And the AI is changing the world in that sense, right?

I mean, you know about at least some of them. Yeah. It's the great, for me, it's the great leveler. And in fact, what you're talking about as far as the dynamic pricing is concerned is kind of a beautiful example of it. It's giving, you know, people who are independently working or running small businesses and small teams access to software and capability and systems and processes that before have just been, you know, guarded by huge corporations with massive budgets. And suddenly we've got access to all this. I think it's a really exciting opportunity for us. And like you said, you know, salons have been squeezed for a lot of years. If we can claw back some profitability in that process too, then it makes it a more viable business. Wonderful. Well, the deal is always on the Build Your Salon podcast that if you give us your time, you're allowed to pitch. So what's the best way for people to reach out and get in touch with you? What do you want people to do next? What are you offering? That would be fantastic. So I don't know how accessible a description is. I gave you some links that people could click. All the links are going to be in the description underneath the YouTube video and on the podcast platforms too. So the links are all in there. Fantastic. I mean, I left my personal phone number in there. So if anyone wants to reach out to me directly, you know, they're really aggressive about like, hey, I need this done. Just give me a call. We'll set something up. Otherwise, I put a booking link in there. I put our website in there. You can just pick a time. And we would love to talk to anybody. And I think we mentioned this, but as a thanks to you, Phil, anyone that's listening now, we're going to do a free consultation of their business, whether they end up choosing BookGo or not. The first, you know, 10 or so people that come over will offer that free charge. And, you know, typically we would charge a couple hundred bucks for that. But, you know, we're so thankful that you're giving me a soapbox to preach off of and it just means the world. So we appreciate that. It's my absolute pleasure. And it's honestly an honor to be part of this journey so early in the journey for you too. OK, so all of that will be in the description box below. And just for everyone's clarity, if you do decide to jump in with BookGo, then I do get a small incentive, a little referral from the guys too, which I promise to spend on drugs and strippers. Super. So I always finish these podcast episodes with three short questions. The first is, what is the best piece of advice you have ever been given? It's a great question. I think Arjun and I are going to alternate these questions. But my dad has a quote that I always grew up hearing and it sticks with me every single day.

You know, as a data science kid like Arjun, you know, I work in statistics and I'd say that it is so incredibly important if you want something to succeed, to work so hard and try so many different things that statistically it would be improbable that you wouldn't reach your goal, right? I love that. I love that. I think humans in nature are so capable as people, right? If you put your mind to something and you are A, going about things with a strategy and B, going about things with tenacity that you won't be stopped. I mean, you don't hear about many people that don't achieve whatever they set their hearts to. And, you know, definitely something that sticks with me all the time. Wonderful. Okay. Second question. And we're handing that over to you then, Arjun. If you were speaking to someone who wanted to follow in your footsteps, what's the best piece of advice you could leave behind for them? Yes. And I'm kind of recycling this as well as kind of both questions where I've received this advice and it's been so useful and I want to pass it back along. And that's, you know, if you're building something for somebody, it's very simple, but you want to talk to as many customers as you want and really understand what people need. Like at the end of the day, if you're trying to build, you know, it doesn't matter what it is, if you're building like a product or if you're building, you know, business. If you're selling something that people want and need and crave and you're filling a gap that people don't have right now, that's at the end of the day, like how you succeed as a business. And that's kind of what we've really tried to do here at Bocao is figure out, you know, what do these service providers need? What are their gaps? And really just talking to as many people as we can, you know, figuring out what they like about their current software, what their issues are with their business, you know, what their slow times are, what their off-peak times are, what their, you know, sensitivities are to different pricing. You know, if it was just me and me making, you know, just something for my own tennis coaching business and trying to share that with the world, you know, that wouldn't succeed because, you know, I'm different than the next person over. And so really, really achieving that. I think the more technical term from that is, you know, achieving product market fit. And really the way you achieve product market fit is by, you know, talking to as many people as possible and just building people or building things that people want. And that was the best piece of advice that I've received. And if somebody wanted, you know, to follow in our footsteps, no matter what it is that you're building, that at the end of the day is how you succeed.

100%. And final question before I let you go is what's the best thing about working with the salon industry? So Arjun and I were joking about this. As data science kids at Dartmouth, the kids that we, you know, see in class, you know, they're not particularly friendly. I think Arjun and I are on the much more friendly side of things. And, you know, we spend most of our days, hey, what'd you get in the homework? And no one wants to, you know, turn around and talk to us. So going to the salon owners and they're, you know, they make you feel at home, right? I mean, part of that's their job to do so. But just the warmth that you get every time you talk to these people. I mean, it lights you up, right? It's like talking, you know, to your mom or something. It makes you feel great. So definitely pivoting from the data science to the salon owners has been, you know, something that we're not looking back on at all. And everybody's so nice, so willing to talk to you, so social. And, like, we've had some incredible, you know, advisees and mentors that it's just been such a great experience. You know, people are just so kind in this industry. And I think it's just a testament to, you know, the people that we're serving here. Yeah. Yeah. What a wonderful note to leave things on. Thank you both so much for your time today. It's been an absolute pleasure. And I can't wait to see what's coming next. I'm sure we're going to get you back on the Build Your Salon podcast to talk again in the future. Yeah. Thank you so much for having us, Phil. This has just been fantastic. You're very welcome. So there we have it. My conversation with two very, very clever guys. Indeed, watch this space. There's definitely going to be more from Booko in the future. And I'm proud to announce that they are now sponsors of the Build Your Salon podcast, too. Would you like to be a guest on a future episode of the Build Your Salon podcast? I would love to be sharing your story with my amazing listeners. My email address scrolling at the bottom of the screen right now. Phil at buildyoursalon.com. Just seven short days until I'm coming in your ears again with another dose of my wise owl wisdom. And until then, take care.