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Hair and Beauty Salons are increasingly looking for ways to differentiate themselves in an increasingly competitive market. While the borader salon industry has been contracting at a rate of 2% a year over the last three years, the organic salon segment increased by 16.7% in the same time period. As importantly, organic salon service fees are 12% - 16% higher than their chemical based alternative while the product cost is the same. Your clients want to feel good about looking beautiful. Shouldn't you be providing that for them?
The organic opportunity right in front of your eyes Sco3 Mitchell CEO, Organic Salon Systems Introduc=on • Serial entrepreneur – founder of several public companies traded on the NASDAQ and NYSE • Exper=se in sales, marke=ng, Internet technologies, and organiza=onal development • Founder & Principal of Mitchell Capital Partners • Two Bachelor Degrees: Economics & Psychology • Three Master Degrees: Business Administra=on, Computer Science, Organiza=onal Development • Former Graduate Business Professor • Dedicated to the pursuit of several philanthropic endeavors and causes Building Blocks of a Successful Salon “Most businesses fail because they lack a true diﬀeren6a6ng factor. Many of today’s small businesses largely compete in a “service commodity” industry, where most professionals are trained the same way, have similar skills, and oﬀer similar services. The only way to compete in that type of marketplace is by refusing to allow yourself to be compared to your compe66on by diﬀeren6a6ng your service in such an extreme way that comparison is simply impossible.” Sir Richard Branson Founder – Virgin Group Focused Niche + Marke1ng + Passion = Proﬁt & Growth Why Organic Ma3ers – Focused Niche • The organic salon segment has been growing at 16.7% year-‐ over-‐year for the last three years while the broader salon sector has been contrac=ng by 2%1 • The organic beauty industry has been growing at a shocking average rate of 15% for the last 15 years2 • Although 78% of U.S. adults said they would prefer, and pay a reasonable premium for, organic or natural beauty products3; only 15% of the market caters to this niche2 “Local, socially responsible, environmentally friendly businesses will always compete beJer than big global conglomerates in the natural and organic markets” – John Mackey, CEO of Whole Foods 1. J.P. Morgan 2010 Analyst Report on Emerging Trends in the Health and Beauty Industry 2. Nutri=onal Business Journal on Natural/Organic Trends in Beauty Report, 2010 3. A.C. Nielson and Greenﬁeld online Why Organic Ma3ers -‐ Marke=ng • Loyal to their Salons -‐ du=fully devoted to salons that they share common values, beliefs, and a shared “ethos” with • Less Price Sensi=ve – understand and accept that organic products and services come at a premium and appreciate the value of them • More Focused on Salon Experience – they want to feel good about looking great • Exceedingly Product Focused – ingredients ma3er • Easily Addressed – gravitate towards community ac=vism • Ac=ve Client Referrers – Fiercely commi3ed to helping and enlightening others through referrals to healthier alterna=ves • Tend to be signiﬁcantly more educated, inﬂuen=al, and aﬄuent than the general popula=on • Extremely socially conscious and environmentally responsible • Prefer small local salons over na=onal chains or conglomerates Why Organic Ma3ers -‐ Passion • 76% of U.S. employees ranked “feeling good about the company they worked for” as “extremely important” up 12% from just three years ago • In 2010 Hewi3 Associates reported that the “truly talented” and “truly crea=ve” would prefer to make less but work for a socially conscious company • A 2009 Covey Ins=tute research report demonstrated that consumers can sense when employees are happy with the companies they work for and sa=sﬁed with their jobs • A 2010 survey of recent Harvard Business School graduates indicated that “personal convic=on, growth, and purpose” was the number one factor they will forgo compensa=on for Why Organic Ma3ers -‐ Proﬁts • On average, salons charge between 12% and 16% more for organic services than tradi=onal services • On average, product costs represent less than 10% of overall service fees • Organic treatments typically enable clients to get treated more frequently (e.g. grey re-‐growth) • Adver=sing spend is reduced signiﬁcantly by the stronger tendency for clients to refer others and the ease of addressing a targeted audience rather than the broader public • Clients are much more eager to visit the salon more omen if scalp irrita=on, toxic fumes, and other un-‐pleasantries are avoided • Although slightly more costly to produce, organic products produce a healthier, superior result without damaging the cu=cle or sacriﬁcing the integrity of the hair’s structure Building Blocks of a Successful Salon Focused Niche – Fasted growing segment in an otherwise contrac=ng industry Marke=ng – Vacuum of demand exists in a growing market of exceeding desirable demographics that is easy to access and has the ﬁnancial means to drive your salon’s prosperity and growth Passion – Making a diﬀerence in the world in a meaningful way by enabling people to feel good by you making them look and feel beau=ful Proﬁt & Growth –Servicing a market that welcomes higher price points while u=lizing compe==vely priced products which enable you to service your clients as omen as they would like rather than as omen as their damaged hair will allow! Focused Niche + Marke=ng + Passion = Proﬁt & Growth Organic Salon Conversion Example Business Case – Corner Salon (A Good Salon Business) • 5 Stylist, 1 Owner/Manager/Stylist • Each see 6 (36 total) clients per day • Salon is open 5 days per week • Average =cket per client is $55 with average 15% in =p • Cost structure includes (as a % of revenue) – 10% for product – 15% for adver=sing – 40% for payroll – 25% for overhead • Salon client base is growing at 5% year over year Organic Salon Conversion Example Improvement Assump1ons – 5 Year Organic Plan • Because some stylist are interested in working in an organic salon for health reasons, the salon is able to add 1 stylist in 2012 and 1 in 2014 • Instead of a 5% client growth (actual industry metric for non-‐organic salons is -‐2%), the salon begins to realize a 15% client growth rate (actual organic metric is 16.7%) • Instead of averaging 15% in =ps, the =ps begin to average 20% because the demographic is more aﬄuent and be3er connected to the salon • The salon’s service prices increase by 12% over =me to account for the organic treatments (average increase ranges between 12% and 16%) • Cost structure remains the same except adver=sing spend decreases slightly (from 15% to 10%) because of an increase in client loyalty and a reliance on the stronger referral network Net Proﬁt Compara=ve Analysis Conclusion: The owners of Corner Salon could make almost $900,000 more net proﬁt over the next 5 years by conver=ng to Corner Organic Salon. In this real estate market, you can buy quite a vaca=on home with that money! Don’t Spend That Money Too Soon T hese are lomy assump=ons! B ut what if…… W e were able to help realize even some of them? T hat would make a BIG diﬀerence! I f you don’t…. Then what’s your plan? I f you don’t…. How long will it take for your compe==on to make the change? We’re Here to Help! • In Salon Promo=on Program – gim cer=ﬁcates, prescrip=on pads, referral cards, client loyalty program, pre-‐booking cards, window clings, shelf talkers, aprons, caps, pins, t-‐shirts, cloth retail bags, posters, etc. • Coopera=ve Adver=sing • Proprietary Organic “Salon Liaison” program • Online Salon Presence and Search Engine Op=miza=on Program • Salon Marke=ng Educa=on and Consulta=on We Want to be on Your Team! I’d love to introduce you to our company, our products, and our team! Let’s get started…. Organic Salon Systems Mission To provide professional hairdressers with high performance hair products which maximize the use of gentle, nourishing and natural ingredients while minimizing the necessity for harsh or damaging chemicals. With these healthier products and be3er informa=on, we hope to bring about superior results, increased competence and a safer salon environment for all concerned. To accomplish our mission, we vigorously embrace our company ethos. Organic Salon Systems Ethos • To only distribute the highest performance, healthiest, most natural, and gentlest products available; and • To con=nually recognize that the best way to grow our business is by helping our clients grow theirs; and • To fully disclose all product ingredients and act with transparency, honesty, and integrity; and • To never divert our product lines or allow them to be sold to non-‐ professionals; and • To maintain an ethical environmental policy; and • To not tolerate any products ever tested on animals; and • To train, educate, and provide informa=on which will enable the industry and our clients to become healthier while improving their service quality; and • To provide world-‐class service to our clients and always strive to become the best at what we do in every regard. Our Stance Against Diversion • Diversion enables companies to charge a high premium to salon professionals for the “privilege” of being robbed of any equitable value in their business by those very companies • Any manufacturer denying direct responsibility and knowledge of diverted product is simply incredulous • “Big Beauty” companies prey on the trus=ng salon professional to build their brands up, while making a hemy proﬁt, only to inten=onally divert their products to the consumer market thereby jeopardizing the clients of the salon professional and causing the long-‐ term value of their business to quickly deteriorate Organic Salon Systems Products • Free from ammonia, parabens, formaldehyde, resorcinol, and thioglycolates. • Contain Cer=ﬁed Organic Ingredients (cer=ﬁed by the United Kingdom Soil Associa=on) • Exceeding all European Union standards regula=ng cosme=cs and beauty products • PETA cer=ﬁed as being 100% cruelty-‐free and vegan • Fair-‐Trade accredited and cer=ﬁed Organic Color Systems (Color) • 65 intermixable colors • Superior grey coverage, cleaner blondes, & beau=ful reds that fade on tone • No damage to the hair cu=cle allowing for a far healthier and lavish result • Up to 3 levels of lim with color & 7 levels of lim with lightener • True to color chart results • Semi, demi or permanent results • Longer las=ng tonal values Organic Curl Systems Organic Curl Systems is an innova=ve perm, straightener, and relaxer that is both ammonia and thioglycolate free, while containing cer=ﬁed organic extracts. It produces a bounce and curl forma=on that is healthy and looks natural. Organic Care Systems Organic Care Systems not only is the perfect back bar for the color line but, your clients will also love to take them home to maintain their hair between visits. These products contain no animal products, parabens or SLS. They are never tested on animals and are made with cer=ﬁed organic ingredients. The Organic Control and Connect lines give all the styling hold and manipula=on you have come to expect without the use of heavy chemicals or plas=cs. They give great shine and a natural feel, never drying bri3le or hard. KeraGreen KeraGreen is a revolu=onary new formaldehyde-‐free organic kera=n system. It includes a full line of treatments, shampoos, condi=oners, and serums providing a more natural, organic, healthier and be3er-‐performing alterna=ve to formaldehyde-‐ based Brazilian Kera=n Treatments. Hairmonics Hairmonics Turbo Ac=vators from Organic Salon Systems oﬀer superior color load and cu=cle penetra=on. They help to achieve longer las=ng color with improved tonal value and color reten=on. This product is great for gray hair and also allows you to process normal color in about half the =me. Available in 5, 10, 20, 30 and 40 volume. Malibu Wellness Malibu Wellness products use a patented, fresh dried vitamin complex that is water ac=vated to normalize the ph of the hair and scalp and remove minerals and oxidizers to ensure consistent and superior salon services. Great for areas and salons with hard water condi=ons. What Makes Us Diﬀerent • Centralized Business Model • Unprecedented educa=on program • Truly Non-‐Diverted • Aligned Interest “Partnership” – truly want to grow and build embedded value in your salon business • Relentlessly Innova=ve • Excep=onally Strong Company Ethos • High Performance Bou=que Niche in Fastest Growing Salon Segment • Excep=onal leadership Get Started Now • Starter Packages – Risk Free with a 30-‐Day Money Back Guarantee – Try our full color line including retail sizes of our care and control lines or our complete KeraGreen package – Call and place your order today and get 40% oﬀ on packages and try it for 30 days. If you don’t LOVE it for any reason, send it back and I will send you a full refund regardless of what you used Organic Salon Systems Online: h3p://www.OrganicSalonSystems.com Toll Free: (888) 312-‐4744 ext 903 Fax: (727) 585-‐2300 Support: h3p://www.OrganicColorSystems.com
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