SCREW Brand Loyalty: Your Salon Supplier Is Not Your Friend

The day my salon lost its key account status with one of our biggest brands. I thought it was the worst news of the year, but it turned out to be the best thing that happened to my business that decade. Here's why. All on build your Salon. Hello, hello, hello. My salon friends, Phil Jackson here, your Queen of Salons coming all over the internet with another dose of my wise wisdom. We are here on fix number four of my 10 minute Money fix series. We've done expenses, we've looked at profit vampires and pre-appointment upsells. Today I am going after a relationship that costs salon owners more money than almost any other, and that is your main supplier. And there are two groups of people that are honestly darling, between you and I, pissing me off a little bit in the salon industry now. One is our salon suppliers and the other one is our salon software companies. More on that later this year. My gosh. I think my problem with the salon software companies is that most of them, they charge a fixed rate every single month. They've got no incentive for you to get any busier. There's nothing in it for them. At least your suppliers, they shift more product when you do well. So at least there's that link between you doing well and them doing well on some level with software, you don't get that. And I think software now these days is hideously, hideously overpriced, overly complicated and poorly put together a lot of the time as well. Anyway, that's not what we're here to talk about. Well done Phil for ranting and we haven't even started yet. Look at me all caffeinated and good to go. No, we're talking about main suppliers and what I don't like is this partnership thing, which I think honestly is a big fat load of bollocks. For a long time we were a key account with various companies actually. But one of the first was Weller, the hair company Weller. And if you don't know what a key account means, it means that you are in the tier above just buying their products. So basically you've kind of got three tiers in a lot of these companies. Tier number one is you go to the wholesaler you buy, you've got no relationship directly with the supplier. Tier number two is when you are ordering from them and paying by invoice. And tier number three is kind of key account status or partnership status. And some of them have lots of levels for this and make it feel like a club. Some of them you get a named account manager rather than just whoever happens to be in the area. You get invited to events, you might get free access to certain amounts of education. You might get sent on courses that you don't directly pay for. You get to launch products before anyone else. You get marketing materials, point of sale. It feels like there's an awful lot in it for you to be honest with you. And it felt kind of brilliant. It felt like we were on the inside. It felt like the rep was kind of part of her team, a part of our team. I knew about her family, she knew about ours. And the salon's identity was very tied up with the brand. A lot of their branding was our branding. A lot of their posters were in our window. Our trip team was trained only on their products. Our shelves were stacked full of the stuff and clients knew us as a Weller salon. And at the time we felt grateful for all of it. Well, why wouldn't we? Because we were getting free events and preferential pricing and free education and marketing support. And it looked like a really generous partnership and we treated it as one. And then things changed because in 2003, Procter and Gamble P&G bought Weller. They don't have it anymore. It's been moved on again. And things over the next couple of years started to change. And I don't want this to turn into an episode where we bash big business. Ultimately all business is there to turn a profit. P&G bought a business, they had every right to run it the way that they wanted to. But almost it felt like overnight. It wasn't overnight but it felt like it. Some of the key account criteria were being rewritten. Some of the thresholds of spend started to shift and the way that partner salons were defined was moving. And the target was changing a little bit. And our salon, same salon, same spend, same loyalty, no longer qualified as a key account anymore. So that relationship that we had with a particular account manager went away. All of that free education stopped. All of those premier events disappeared. The advanced access to all those launches stopped landing on the doormats. We didn't get those phone calls anymore. We just got the same marketing materials that everybody else got. And we noticed that the support just wasn't there anymore. And at the time I was devastated because I'd built the salon around this brand and I actually, I'll let you into a little behind the scenes. The reason we'd done that is because I was living in Basingstoke at the time and Basingstoke was Weller headquarters. There's a road in Basingstoke called Weller Road. Because they used to have their headquarters there and I used to be able to walk to the education studio if I wanted to. And we got so friendly with them. If they had cancellations on some of their courses, I could call up that morning and they'd say, yeah, we've had a no show. Or yeah, we've got one space left. You can have it for 50 quid. And then I'd walk up the road and have a day's education. It was that friendly, that pal. And I felt like all of that had been cut loose after a huge amount of money that I felt we'd spent. And what I thought of as a partnership, it ended without really much more than a conversation. And that feeling lasted for quite some time. But once I'd stopped sulking, I sat down and started to look at the numbers properly. And the numbers told a story that I wasn't really expecting because our profits started to grow. And I'm not talking a couple of quid, I'm talking quite significantly. And within a year of losing our key account status, we were making more money than we ever had in years of being a partner. And it took me a while to work out why. And when I did, I started to get really angry because the lesson was really big and I couldn't believe that I hadn't seen it before because all of that support that I'd been so grateful for wasn't free. It was actually costing me a fortune. That free education, well it only came when I bought the products and the techniques that we'd been trained on into the salon. Every course that we went on, every new technique that we learnt came with a back bar order or it came with a colour order. And some of those products sold really well because they were tried and tested and proven. I knew we had a market for them. A lot of them weren't proven. A lot of them were cutting edge products that even Weller had no idea whether they were going to work or not. And those exclusive launches, they only came when we ordered a minimum amount of opening stock. So every time there was a new collection or a new colour line or a new treatment system, it was, yeah, buy this and trust us, it'll fly off the shelves. Some of it did, a lot of it didn't. And the launches we believed in mostly because the rep had told us to believe it. And the brand events, yeah, they were beautiful. They were inspiring. Came back with a list of products that we now had to stock because it felt like it was almost stupid not to. It felt rude not to. And that preferential pricing, well technically, yeah, of course we had reasonable prices, but only because we were buying at volume. We were getting a volume discount. It was nothing to do with partnership at all. The discount was the bait, but the trap was overbuying and all that dead stock, oh my dear, the dead stock. Thousands of pounds of products sitting on shelves and in storage because I had to buy storage because of an obligation, not because of what our clients were asking us for. When we eventually did the audit, the amount of money that was sat there in dead stock made me feel sick. And support wasn't free. It was the most expensive support that money could buy. We were paying for it in bucket loads, in terms of cash flow, in shelf space, in storage, in mental load. And the simple fact that I'd stopped thinking like a business owner and started thinking like a brand ambassador, you'd be a brand ambassador by all means. But you do it for your brand, not theirs. So here's the reframe and it's the bits I want all of you owners to take from this episode. Your supplier is not your friend. They're not your partner. They might be friendly, they might understand your business a bit, but that's it. That's the whole relationship. And I'm not being cynical, I'm not being cold. You can have a good, warm, professional working relationship with any supplier. You can like your rep, you can find them helpful, you can even genuinely value the education, but you've got to understand the deal. They're not on your side, they're on their side. Their job is to sell you more of their stuff. Your job is to build a profitable business. When those two things overlap, fantastic. When they don't overlap, don't kid yourself that it's the same thing. Just because you are a partnership salon, the minute you start making decisions because of loyalty, instead of because of profit, you've handed over the steering wheel to someone whose destination is very different from yours. So rule number one, no supplier owns the shelf. Every product has to earn its place by selling. Doesn't matter who makes it, doesn't matter how lovely the rep is, doesn't matter how good the brand event was. Six months of poor sell through and the product comes off the shelf. No exemptions just for loyalty. Rule number two, multiple suppliers always. Never let one brand become the salon's identity. You carry a mix, some big brand stuff that clients ask for, some independent stuff with better margins. A lot of white label stuff that we put our name on. And that mix means that no supplier can lean on us anymore. And rule number three, the numbers decide. Every supplier conversation happens now when we understand the sell through rate, we understand the margin. We understand how much stock we are holding and how fast a product sells. If the client numbers say no, the answer is no. I don't care how charming the proposal is, how flattering the rep is, or even how dishy they are either. So here's your 10 minute job today. Open up your stock list. Have a look at three products that have been on your shelf for longer than six months. When was the last time you sold one? When was the last time a client asked for it? If we ran out, would anybody actually notice? If the answer to those questions is, I don't know, or probably not. You've got dead stock and that is cash sitting on your shelf doing nothing while your business pays the bills. Don't beat yourself up. Every salon's been there. Just decide what you're going to do about it and get rid. So that is fix number four of my five 10 Minute Money fixes. A full walkthrough with the Dead Stock audit and all the maths that you need is over at 10 minute money fixx.com. All five money fixes are available to you there. You get them as PDFs, you get them as audio and you get them as video. Nine quid and about an hour of your time to keep more profit in your own salon business. 10 minute money fix.com. And that link is in the show notes as well. How is it for you? What's your relationship with your suppliers like? Have you noticed a shift over the years? Because I don't think I'm the only one who's noticed that shift. Reach out and let me know. My email address, scrolling at the bottom of the screen right now, Phil, at build your salon.com. I love hearing from my salon owner friends. Anyway, the last fix in this series is going to be here a week today, on Friday. I will see you for something just a little bit different with a slightly different flavour. And until then, take care.