Other salons DON'T WANT you to hear this!

This is the Build Your Salon podcast with me, Phil Jackson, here to help salon owners master the skills you need to build bigger profits and a fuller life. Hello, Phil Jackson here from Build Your Salon, here to help you master the tools you need to generate the profits you deserve so that you can lead a fuller life. And today we're talking about the people that take some of that profit away. We're talking about your competitors. So I want you to ask yourself how much you really know about your competitors. And I want to know how you feel about your competition. Are you concerned by your competitors? Are you worried about the level of competition in your marketplace? I know that this is something that bothers a lot of salon owners because one of my jobs is to be a salon coach. And usually at some stage, quite early in that coaching process, we will have a conversation about the level of competition in the area because it's preying on the salon owners mind. So I hope that by the end of today, you'll have a better idea of your competition. And I think you're going to be feeling a little bit better about your salon in your marketplace as well. So the first thing I want you to do right now is to get onto Google. Close me down for a minute. And I want you to type into Google, competitor analysis template, and then click on images. And what will come up is something that looks like a very simple spreadsheet. I'm going to fill in one of these spreadsheets right now. So down the left-hand side of the spreadsheet, you're going to list all the features of a business in your industry. So in the salon industry, a feature might be the level of training that your employees receive, or the range of products that you stock, or the physical location for your salon, and so on. And write yourself a quite exhaustive list. And then across the top of the spreadsheet, we're going to put a column for your own business. And we're going to put a column for each business in your area. And then we're going to allocate a score in each of these segments of the grid. So for example, it may well be that location-wise, you have an outstanding location where parking's really, really easy. And there's loads of visibility, plenty of passing trades, so you might give yourself a nine. Whereas your competitor might be in a slightly ropier location, a shadier end of town, or the parking's not quite so easy. So you might give them a six or a seven. And you keep going until you've filled in every cell of the grid. Then on the right-hand side of the template, what I want you to do is put a column for the importance that a customer allocates to each feature.

So it may well be that your salon is investing very, very heavily, and employee training is a really big priority for you. And you might score yourself an eight, a nine, or a ten because of that. And you might know that your competitors aren't investing and not taking the training of their staff very seriously because they've got a very short-term attitude or they've got lots of self-employed people. But it might well be that the level of training isn't very important to your customers at all. And this will paint a really interesting picture of your salon in relation to the rest of your local marketplace. It also helps with your marketing. Because if you have something that you score highly and you know that your competitors are scoring lower and you also know that your customers are allocating a lot of importance to, these are the things you need to be pointing out. So it may well be that actually emphasising the location of your salon and how easy the parking is could give you a real competitive advantage. Once you've filled that sheet in, I want to talk to you about expanding your mind a little bit as far as your competition is concerned because your competition is much bigger than you think. It is not just a list of other salons in your area. And this is the reason why. We don't have to go back too many years before we were really, really undercharging as an industry. People were throwing out haircuts and colours and massage services and nail services at a level which was completely unsustainable. We were way undercharging, particularly given the level of investment that we were putting into our training and our products. Something had to change. We had to start charging more. And if you look at the increase in price over the last 10 to 15 years, it's actually been really quite high compared to other goods and services. I'm not saying that we did the wrong thing. We absolutely had to if this industry was going to continue to develop and to continue to improve. But what happened was that our services went from being something that was essential to being something that was a treat or a luxury. And lots of salon coaches like me started talking about the salon experience because we wanted it to match what we were now charging. The problem with that was instead of our competition being our staples, instead of our competition being the essentials in life,

the competition broadened to become also the luxuries, the things that we don't necessarily need. So we were positioning ourselves, not just against other salons, but the decision in the customer's mind wasn't necessarily, shall I get my hair coloured with this person or this? It was, shall I get my hair coloured or shall I buy this purse? Shall I get my hair cut in this luxury salon every six weeks? Or shall I take this spa day? So all of a sudden, we weren't essential to our customers anymore and our competition became everything that was competing for disposable income. Bear that in mind when you're setting your pricing, bear that in mind when you're examining these elements of your customer experience. It's vital that you understand that your competition largely is not the salon down the road. And the other people that are competing with you, which everybody overlooks, is your suppliers. They are competing for profit margin. Anyone who's trying to take away from your gross profit is your competition. And that means that wonderful rep, who is also your best friend, who comes in every four weeks trying to sell you products, is your competition. Don't be disillusioned. We still have to keep these relationships really healthy. But they are competing for your profit margin and they should be treated as competitors. So be aware of your competition. But my message for you, what I want you to leave with, is that if you've gone through this competitor analysis, if you've sat down and really thought about who else is competing for profit margin from you, you are streaks ahead of anybody else in the business. Because nobody does this in salons. It's insane. They just don't take competitor analysis seriously. So if you've gone through this, I guarantee you're already streaks ahead of the competition. And also between you and I, a small secret is largely you can ignore your direct competitors. Largely you can ignore the salon down the road because most of them are clueless. I hope that's been helpful. I hope you feel a bit better about your business and I hope you've got some good homework done as well. I'll see you next week. Hey everyone, it's Phil. Did you like the episode? Be sure to subscribe and tell your friends. For more help in getting more from your salon and your life, head over to buildyoursalon.uk. Enter your name and email for our newsletter list. In the meantime, keep on building. Bye. Bye. Bye. Bye.

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