Unlocking the Benefits of Memberships for Stability and Predictable Income

Sit down and see what's going on with the Queen of Salons. Hair, beauty, and more successful tips for business owners. All on Build Your Salon. Hello, hello, hello, my salon friends. How on earth are you? Welcome to the Build Your Salon podcast with me, Phil Jackson, your Queen of Salons. And welcome to March. How is the year treating you? My goodness, it's going fast, isn't it? We'll be talking about bloody Christmas before you know it. I have to say March is always a funny month for me. I love the spring. I love those acid green colours of spring. I love seeing everything starting to wake up again and the promise of a warm summer ahead. But March always catches me unawares because I think it's spring and it never is. It's always the end of winter. So I always think it's time to dust off the spring and summer wardrobe and start packing away the heavy coats and jumpers. And my gosh, it's chilly down here at Build Your Salon Towers this morning. So I hope the year is treating you well. Today we're going to be talking about my favourite topic, which is salon memberships, which is the topic that I am best known for. I think it's the topic I know more about than anybody else in the whole wide world. And it's what I teach best. So I'm very keen to be sharing with you. I have resisted, though, darling. I have held back a little because I didn't want this to turn into a memberships podcast. And actually, that's kind of a reflection of my journey with salon coaching, because for a long time, all I taught was memberships. And we'll get to my backstory in a minute, my origin story, they call it, don't they? And we'll get to my story in just a minute. But I didn't want to be seen as a one trick pony. So I raged against memberships for a long time and wouldn't talk about them an awful lot. And it's only really the last couple of years that I've decided to own that space, to step in to the shoes, not only of Queen of Salons, but of Queen of Memberships. And it's my very great pleasure to be sharing what I think is a vital bit of information with you. Because I think this year, as much as any other year, I was going to say more than any other year, but actually over the last few years, this has been true. I think this year we need some predictable, we need some stable income, we need some reliability, we need a rock in our business, something that we can build from. And I think that salon memberships can be the absolute key to that predictable income. And memberships were what got me into coaching in the first place. So I'd been in the salon industry for a fair few years before I became a salon coach.

I came into the industry in 1999, which I know if you've ever seen a picture of me, it's very hard to believe this amazing specimen of well-preserved Botox-infused flesh. I came into the industry the long way round, I'd already been through university. I mean, can you imagine my mother's face after running up all of that debt, that student debt going through university, and then I told her I wanted to be a hairdresser. I'd love to say that she's always been 100% supportive of everything I did, but yeah, she did roll her eyes a bit. She did suck her teeth a bit when I said I was going to go back to college and start hairdressing. But I came into the industry in 1999, and then being an arrogant little shit, it was only a couple of years before I decided that we needed our own salon, we needed our own space to do our own thing. I'm not very good at working for other people. I think that's a feature of lots of us small business owners, isn't it? So, about 2001, no, it was 2001, September 2001, we opened my salon in Newbury, in Berkshire, here in the south of England. Beautiful town, lots of money, it's a nice rich town in the south of England, and for a lot of years we were doing okay, to be honest with you. We weren't setting the world ablaze, I never won British hairdresser of the year, but we were driving nice cars and having nice holidays, and life was good, to be honest with you. We built a team very quickly, I realised that even though I was an okay hairdresser, I was a much better manager, and I think we were doing okay also because the business side of it didn't really scare me. Because I'd been through university, my degree is banking and finance, and I'd done a postgraduate degree in law. The business bit of it didn't really scare me very much, and I think it does scare lots of salon owners, and I kind of see that as my role as a salon business coach, to help you make friends with the figures, and start to make friends with the business side of what we do. But the wheels fell off in 2011, so we've been open for 10 years, and 2011, we'd managed to make it through the awful financial crisis, 2007, 8, 9, and 2011 was the year that we adopted my eldest son. Now, I don't want you to think for one second that adopting my eldest son was a mistake, but I didn't do an awful lot of very thorough preparation, let's put it that way, because I'm a big planner, and I know lots of you can relate to that.

I love a new project, I love a new avenue to explore, I love the excuse to go down to my favourite stationers in Salisbury, there's a wonderful stationers, and I love the smell of stationery, don't you, all that paper, and I love the excuse to buy a new book, or a new journal, and of course you've got to buy a new pen, because you can't write in a new journal with an old pen, because that is the act of a psychopath. And I love that brainstorming, planning, building the outline of a project, and I find that part of what I do very exciting, and I guess that's actually why I enjoy coaching so much, because that's what I'm helping people with, helping them take their dreams and turn them into implementable projects. So I love that planning process, and I had planned parenting, and let me tell you, if you have children, you're probably already sniggering at that, but if you don't have children, and you think you might have one day, let me tell you, you can't plan parenting, because most of the time, they don't follow the plan. In fact, I would say that children, most of the time, act like there isn't a bloody plan at all, darling. They really do do their own thing, and I'd planned to take six weeks adoption leave. So my little dude is now a teenager, a very stroppy teenager, it's got to be said, 13 years old, so he stinks as well, and lots of attitude, and lots of rolling his eyes, and kind of grumping, and flopping around the house, making everyone feel cross. But at the time we adopted him, he was gorgeous, two and a half years old, and salon owners are my favourite people in the world, but a very close second is foster carers, and he'd had brilliant foster care. He'd been with the same foster carer for an awful long time, while that whole legal process of figuring out whether he could be adopted or not was going on in the background. And the problem was, even though he'd had good foster care, he'd been moved around a lot, and in fact, two and a half years old, I think he'd lived in seven different houses, which is, you know, he was unsettled. So I'd planned to take six weeks off to help this wonderful bundle of joy move into our new home and build a new life, but it became really clear very quickly that six weeks was not going to be anywhere near enough time. And in fact, it became a condition of his adoption that I took six months off work to help him settle in. And that was six months barely going into the salon at all. I think I went in probably once a month for six months. Now, the problem was, six weeks was fine. For six weeks, my regular customers were quite happy to either rearrange their appointments, reschedule with me, or to see somebody else just for one visit.

And I love it. Don't you love it? When they're not exactly friends, are they, our salon customers? But they're a bit more than just customers. They're in that funny middle ground. And they start to buy in, not only to you and your service, but they buy into the kind of life that you're building and some of your life goals too. And my clients were so happy that we were building a family and adopting this little boy. So six weeks was not a problem. But six months, well, that was a different matter because I'd put nothing in place. So I was one of the biggest hitters financially in the salon. But I was also the salon manager. I was the person who took care of all the day-to-day management decisions. I was the one who set the targets for the team, carried out the one-to-ones, made sure everyone was performing properly, made sure everyone was happy. I was doing all the marketing in the salon. And I did none of that for six months. I fully embraced being a parent. And I loved it. I loved staying at home and watching kids' TV and building Legos all day, every day. And that's literally what we did for six months, was just bonded and played and enjoyed each other's company. So very quickly, things started to go wrong at the salon. We started losing money, which was a bit perplexing. A bit of money. It wasn't awful to start with. But, you know, things progressively got worse because we started losing clients. And then we started losing team members. And that was when things went horribly, horribly wrong. And I don't know how long you've had your business for. And I don't know whether you've ever encountered this situation. But I took a phone call at home from my accountant. And let me tell you now, if you ever get a phone call at home from your accountant, it's not probably going to be good news. They usually call when there's something wrong. They're not calling to say they've suddenly found an unclaimed pot of £10,000 hidden in an account you'd forgotten about somewhere. It's normally because the wheels are falling off. And I was standing in the kitchen and my little dude still has this addiction to mini cheddars. You know, the little cheese crackers. And he was pestering me for a snack. It must have been mid-morning. And I was standing in the kitchen. I don't think we were even dressed. I seem to remember being cold anyway. But my kitchen's always cold. Tiled floor. No underfloor heating. Big mistake. But I was standing in the kitchen and while he was nagging me for a packet of mini cheddars. And I kind of was taking care of him with one hand and I had the phone in the other sort of propped on my shoulder. And my accountant told me that we had six months left. And that was six months to make the team redundant, to sell off whatever stock and fixtures and fittings we could,

to try and find someone to take the lease over on the salon building. Six months basically to bankrupt the business. And I ended that call really quickly, which is my kind of default for Unexpected News. I kind of go, okay, I need to hang up now and process and then we'll speak again. And I put the phone down and just sat on this cold kitchen floor and cradled this little boy, this very definition of a blessing. This little lad that I was supposed to be saving from all this chaos. And that's the first time that my boy ever saw me cry. But something snapped that day, as it very often does. We sometimes need to hit these lows before we can start to soar again, before we can start to rebuild. Because the problem was I was trying to protect this little lad, trying to save him from all this chaos. And I was letting him down so badly. I was opening him up to a whole new world of pain, a whole new world of uncertainty. But the biggest problem was we didn't have an alternative. I couldn't get a job somewhere else because I still couldn't go back to work. I didn't have a plan B. There was nothing else I could do, really. So I made a decision there and then that the business would not fail. And I started tearing the business apart. And what perplexed me was we were busy. The guys that I had left were booked up. And we weren't ever the cheapest salon in town. And I couldn't understand where the money was going. And the biggest problem that I found as I was tearing the business apart, and I really did. I went through every single report that that bloody salon software system could produce for me. And my goodness, they love producing a new report, don't they? And I went through every bank statement and all of our supplier arrangements and all of our contracts trying to find what the problem was. And the biggest problem was this unpredictability. We were swinging so far from our average takings month after month. So the cycle was basically that we would run up a huge overdraft one month, and then the next month we'd pay some of that off. And the month after that, we'd be back in debt again, and then we'd start to pay something off. And it just made everything feel so uncertain, made everything so difficult. I couldn't figure out when it was safe to invest in the team, when it was safe to invest in new services and training, when it was okay to refurb the salon, when I could invest heavily in marketing. I just was riding this roller coaster of takings month after month after month.

And it was exhausting and it was overwhelming. And bear in mind, I've got a degree in banking and finance. I know this stuff. And I was getting it horribly, horribly wrong. Now, I've always invested in myself. I've always said, always have a coach, always be a mentor, because you will learn just as much from mentoring as you will through having a coach. But even in those times, even in those dire straits, I still managed to scrape the money together to have a business coach. And he was very keen on local business networking. Now, let me tell you, I've already shared that salon owners are my favourite people in the world. You literally saved my life. But that's a story for another day, darling. So salon industry networking is a pure joy to me. To go to a trade show and hang out at the bar later and swap stories and gossip. And I love the salon industry. I love the fact that we like a good gossip. I love the fact that, oh my goodness, we're trying to guess who's got the hangover on a Saturday morning. I love people turning up for work with inappropriate dress and an inappropriate amount of makeup for 8.30am. I just love it. And I love the energy. I love the youth and the vibrancy that the salon industry brings. But hanging out with local business owners is a different kettle of fish. I find it really hard to paint on a smile when I'm stood in a room drinking lukewarm coffee with two web designers and three lawyers and a couple of accountants. And I can see people just working the room. It's not about networking at all. It's who can I flog a website to? Who can I start doing bookkeeping for? And a little bit of my soul just dies every time I go local business networking. But anyway, I'm very obedient. I love someone telling me what to do. So I went to the bloody networking event. And even worse, oh my God, I'm ranting. Can you hear it? Even worse is when they expect you to be pleasant to these people at half past bloody six in the morning because you're having breakfast together. Good God alive. I'm a morning person, but don't count me as social in the mornings. Leave me alone till 10. Anyway, to cut a long story medium length, I was sat next to a gym owner. And very rarely in our town, it was an independent gym. So most of the gyms in our area are franchises and chains. But this was an independent gym. So this guy knew his business inside and out. And I got really interested in his income model. And maybe it was because I was feeling raw. Maybe it's because I was feeling vulnerable because I had these huge peaks and troughs in my turnover. But this guy could tell me with relative certainty how much he was going to make next month. And in fact, he could probably go forward three, six, maybe even 12 months and save a few cancellations here along the way.

He could tell me with relative certainty what he was going to be making. So those difficulties that I had in forecasting and planning and knowing when it was okay to spend and knowing when it was okay to invest. He didn't have any of those problems. This guy was chilled. So I basically stole his income model. I basically repurposed. Bless his heart, he was great for sharing. And basically repurposed the gym membership model for salons. In fact, my first salon membership agreement was a rehashed version of his membership agreement. He even shared that with me, which was wonderful. And it worked beautifully. Straight away, we had this predictable level of income. And we had a little bit of money that I could rely on month in and month out. And way back at the beginning, we used to collect all of our payments on the first of the month. All of our membership payments were scheduled for the first of the month. And which is also, of course, the day which I used to dread. I used to call it first of the month anxiety because when all the direct debits and the standing orders come out of your bank account. And so I used to call it first of the month anxiety because I never knew if there was enough money to pay the team, pay all the standing orders, pay all the direct debits and still keep us in credit or at least within our overdraft limit. So straight away, that first of the month anxiety started to fade. And in fact, over the years, we've built our salon membership income to the level where all of those first of the month expenses are covered. All of our fixed costs are covered. So that's our rent, business rates, the fixed part of all of our wages. All of that covered by regular payments from our salon membership clients. And don't go thinking this is a discount club. My salon membership clients are the best clients we have. They spend more than anybody else in the salon. Plus, they're the first to take up sales on service. Plus, they're the ones that buy the most retail products. Plus, they're the most loyal and the ones most likely to recommend us to others as well. They really are our perfect clients. And I think you could use some of that too. In fact, I don't know a business on earth that could not use some of that too, especially right now, especially given what we've been through the last couple of years, especially what we're facing in economic terms this year as well. Off the back of salon memberships, I won a couple of awards, a couple of innovation awards, because way back in 2011, there was nobody to copy. Nobody else was doing this stuff. And I got some stuff wrong. Of course, I got some stuff wrong. My goodness, here's a couple for you.

Firstly, I called our membership tiers bronze, silver and gold. I'm part of the most creative industry in the world. And the best I could come up with was bronze, silver and gold. So it was dull, to be honest with you. And it didn't sound like us either. We're not that kind of salon. We're a bit cheeky and a bit saucy. And we can get away with stuff in our marketing that many businesses couldn't. So bronze, silver and gold didn't even sound like us. And get a load of this. Our top level membership in year one included unlimited retail products. What an idiot. It was one of those things that I did where we put it out to the world and sold out very quickly of that level of membership, I have to tell you. And then I started having anxiety attacks. And I had visions of people grabbing a supermarket trolley, coming into the salon and clearing my shelves and selling all my products down the car boot sale on a Sunday. But they didn't. And we got away with that one. But those early day mistakes, my goodness, they were very, very plentiful, I can tell you. But we get success or we get lessons. And I learned very quickly that there was something in this. It just needed polishing and refining a few times. Won those awards for innovation for our work. Off the back of that, I used to get lots of phone calls from other salon owners. Got a bit of attention, you see. And salon owners wanted my help. They could see the value in it. They could see that they wanted some of this membership income too. So I wrote my first book and I began coaching. And Salon Membership Masterplan is my online program to help salon owners put memberships together. And it was the first program I built way back in 2015. And I'm super proud of it now. It's been through so many iterations and so many versions because I'm seeing people put memberships together. I'm seeing what works in their businesses time after time after time. So I'm continually polishing, refining. Of course, the big leap for me was making the leap from hairdressing memberships into beauty memberships. Because about 80% of the salons that I coach now are beauty salons, not hair salons. And it works beautifully in beauty. It works very nicely in beauty salons as well. And in fact, some of the most successful memberships that I've put together have been around beauty services. So I really do think every beauty salon, hair salon, aesthetics business in our industry could use some predictable right now.

To a greater or lesser degree. I would love to see a salon or two go all in on memberships and make it 100% memberships. Completely non-negotiable in the same way as a gym runs sometimes on 100% membership model. I haven't quite got anyone brave enough to jump in yet. And if you feel like you're brave enough, then please reach out phil at buildyoursalon.com. I would love to help. But for everybody else, just figure out how much it would mean to you to have that bit of predictable. To have that better sleep at night knowing that you haven't got that first of the month anxiety. How much would it mean to you to be able to plan financially and project forward a little bit and know when it's safe to invest. Know when it's safe to grow. Hell, maybe even know when it's safe to take a bit more profit out of your salon business. And of course, the best way that I have to help you is my Salon Memberships Masterplan programme. You can get all the details and a saucy discount as well, darling, by heading over to queenofmemberships.com. That's where the programme lives right now. And at the moment, we've got a little cheeky podcast discount for you. You can get a whopping £100 off your investment in Salon Memberships Masterplan with the discount code QUEEN. So head to queenofmemberships.com, use discount code QUEEN and save £100 on your investment. And also included at the moment is a little one-to-one session with me, darling. Yes, we can have a chat. Not quite in person, but one-to-one anyway, away from the noise of social media and podcasting. And basically, I've put that one-to-one call in there because some people just need a bit of handholding or a sanity check on what they've put together. So my idea is that you would go through the training, put your membership together, and then just before launch, we would have a quick chat. And you'd basically pitch it to me. So tell me what you've put together, what the pricing is, what you think's going to be great to be included. And I can give you a few ideas or even just say, yes, you've got it right. Push go. But actually, you can use that one-to-one call for anything you like, anything that's standing in the way of your incredible success. Your old Uncle Phil knows a thing or two. I've been around the block a few times now. There's not much that I couldn't offer at least a little bit of advice with. And it'd be great to speak to some of you on a call one-to-one. So that's my journey with salon memberships. I'd love to know how you're going to implement that and put things in place. Reach out to me, Phil, at buildyoursalon.com. I love hearing from my salon owners. And when you're putting my ideas in place, it warms the cockles of my heart to think that I'm helping another salon through some tricky times.

And not just salons locally, not even in the UK. In fact, a big shout-out to our listeners in California. Yes, I managed to find the Insights tab, which tells me where you're listening from. And this last week, California, you're my favourite people. You've been listening more than everybody else. Well, I assume it's more than one person anyway. Or it's one very sad person listening to me again and again and again. Either way, I appreciate the listens. And if this broadcast has been useful to you, then please, of course, don't forget to leave me a little review. Hit five stars, because they look the nicest on the screen. And then share with the world how you've enjoyed this little episode. Just seven short days until I'm coming in your ears again, my darlings. Until then, take care. Sit down and see what's going on with the queen of salons. Hair, beauty, and more successful tips for business owners. All on Build Your Salon.