 Whether you are my competition reading this, a fellow salon owner from abroad, a friend, or a customer, you have probably wondered; "Why the HELL does he give Tanning lotion away for FREE? No other salon does that!" Lets take a look at what it costs me to give away free lotion. So the matrix is booked up 12 hours per day between two of them lets say, and ignore the regular tanning units. 12 Hours x 3 sessions per hour = 36 sessions per day. Now imagine that every client goes once per week, 5 days per week. 36 Clients per day x 5 days = 180 Clients per Week. Lets say every client buys the same lotion. A $60 bottle that is 8.5 Oz in size, resulting in approximately 10-12 tans. If each client tans once per week. Every client replaces their bottle every 3 months. 180 Clients x $60 every 3 Months = $10,800 So its safe to say that I spend $10,800 in LOST REVENUE on giving away free lotion to our members. I say lost revenue because my competition gets to make this money, whereas I do not. Why would I be so stupid? Well, lets take a look at what it takes to run a business. Every business has operating costs, rent, staff, taxes, equipment maintenance, banking fees, utilities, licenses and permits, and ADVERTISING. Most of what I do in business, I learn from books, and this idea came from a few select books that combined to give me this idea, Purple Cow (By Seth Godin) and FREE: The Future of a Radical Price (By Chris Anderson). Just skip to the next bold portion if you'd rather be spared the details! In FREE, they talk about how Amazon.com used to spend millions of dollars per month on advertising in magazines, web ads, television ads, and news print. However, in many cases the message gets lost amongst millions of other ads and at the time, people were afraid and unsure of buying online. It was viewed as trading off getting the product now, for later, for not much cheaper, and you had to pay for shipping. Amazon basically sat down and thought, what can we do to fix the online purchasing businesses faults, and discovered that they could afford to use the advertising budget to offer FREE shipping to its clients, and still afford to do SOME advertising. A new concept in online shopping was born, No Cost shipping. Now with this, and inconvenience in the experience of switching to Amazon was solved, and it was enough to take the company to new heights in its success. Because PEOPLE the customers, enjoyed telling everyone about the free shipping and they did more of the advertising for Amazon, then they ever could with ads and radio spots. The "FREE LOTION" membership was all done in an effort to evolve GOLD'N TAN into a "Purple Cow". In a sea of black and brown cows, its hard to stand out, unless you are a purple cow, then its pretty easy. An example that will always resonate with me was an example of UPS. In big cities like New York, interns and assistants courier paperwork all day long. A common complaint in New York is that if you go to the street, you cant go one block without seeing 10 trucks for FedEx or UPS, but sometimes finding the closest retail location for shipping was a huge pain, especially when all they needed to do was put it into a mailbox with their companies billing info on it. No money or information had to be exchanged. Everyone thought "Why can't I just give this to the driver, that would be so easy." One member at UPS thought this idea had some merit. After a long bout with everyone in the company, the idea finally got pushed through to have a small mail deposit box on the side of each UPS truck. Now it was like having 1000 retail locations in the city, rather than 10, if you were an intern, or assistant, or otherwise had to deliver a package in downtown New York, which companies envelope do you think you would grab? The one that was easy to deliver, or the one that was more difficult? Do you think that a 15% discount would be enough to sway you away? What about a really fancy television ad with Couriers dodging football players to show their tenacity in on time delivery? Clearly, UPS rocked the market with this choice to innovate, rather than advertise. Of course advertising will always have its place in a business, but sometimes you need to spend a little more time and money on innovation, and creativity, and a little less on the advertising itself. With a truly unique customer focuses offering, the advertising should be more effective even if its less frequent or expensive. This was the purpose of the FREE LOTION, I could either spend $3000 a month on radio ads that say "FABOOTIN" or "BEST BEDS BEST PRICES" in my "CONTEMPO SPA" or I could find a way to save clients time, and money with the same money. By offering them a no hassle experience to tanning. No dragging your bottle every where, no having it freeze and get wrecked in your car during the winter. No spending $60, $80, or $140 on a quality lotion every time you run out, which ALWAYS happens to be the day the cell phone bill has to be paid or rent. The purpose was to find a way to put money in our CLIENTS pockets, rather than the local ad companies. The idea was to create something amazing and unique that would turn customers, into RAVING FANS. So if you like the free lotion membership, Tell someone! It would really help me out in my mission to make you a happy satisified RAVING FAN of GOLD'N TAN. Thanks for reading, have a great day! :) |
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