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Four Reasons Why Some Hair Salons Are More Profitable Than Others

In New Zealand hair salons are often profitable businesses. The number of hairdressers and barbers in the country has grown in recent years and this trend is expected to continue in the future. There is always a demand for professional hairdressers that perform quality work and many entrepreneurs choose to purchase salons; whether they’re small businesses or a franchise, in order to profit from and grow the company.

Hairdressers are required to meet certain qualifications in order to practice in the field in New Zealand and employment prospects are relatively good because the demand for the service continues to be stable.

While many salons are considered profitable, there are a few factors that contribute toward some salons being more profitable than others. Here are four reasons why some hair salons yield more profit than others.

Client Retention

Successful salons have a solid group of clients that keep coming back. Something that the business offers keeps them returning every few months or weeks. That can include friendly service, professional hair care, unique hair products or the fact that they always feel great when they leave.

Businesses must cater to the needs of their clients to ensure repeat business and help maintain profitability. Hiring capable, friendly front desk staff is a great way to improve client retention. They’re the first face that the clients see when they arrive and the last face they see when they leave. Many salons underestimate the value of a capable front desk staff. Creative incentives and loyalty programs are also useful for improving client retention, and obviously qualified stylist who provide excellent work are essential.

Solid Marketing Campaigns

Profitable salons are not only thinking about how to retain the customers they have, but they're also seeking new customers. Having a clear marketing strategy is critical. New customers may be looking for first-time customer discounts, competitive prices or some other incentive. Some salons market that they use all-natural hair products or specialise in a certain hair colouring process. For a small salon, individualised attention might be a great reason for new customers to schedule an appointment. Whatever it is, a successful marketing campaign can help increase a salon’s profitability.

Loyal clients or other happy customers can provide marketing of their own if they leave a review on websites such as Beauty Review or Yelp. People who are searching for a new salon may decide to give them business if they notice lots of positive reviews from existing customers, so word-of-mouth marketing is also important to cultivate.

Brand Recognition

This mainly applies to franchised salons, but brand recognition also matters in terms of profitability. A franchised hair salon is going to have a support network in place as well as an established management team that can apply the right methods to ensure success for the business. More Kiwis are purchasing franchises these days in different industries, including hair care, because an existing network of skilled individuals and brand recognition helps increase profits.

Services Offered Match Client Needs

Another reason some salons are more profitable than others is that the services they offer better match the needs of the target audience or neighbourhood. For a salon situated in an affluent neighbourhood, clientele may expect a superior level of service they can’t find anywhere else, for example, and they’ll be prepared to pay for it. Doing the market research and applying those principles to a salon business you've just purchased, or one you've run for years, can make a big difference in profitability.


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