The Discounting Dilemma

Lisa Conway, the founder of Zing Business Coaching, will reveal the pros and cons of discounting products and services at next month’s BEAUTY & SPA Insiders summit.

Lisa, who has worked in, managed and owned salons for over 30 years, is now sharing her knowledge with the industry to help take “salons everywhere from ‘good to great’”.

During her talk on ‘The Discounting Dilemma’, Lisa, who is also the author of three books (The Naked Salon, Your Salon Team and Your Salon Retail) is bound to inspire a lot of discussion as despite its popularity, discounting remains one of the industry’s most controversial subjects.

Therefore in the lead up to her appearance at BEAUTY & SPA Insiders, we asked Lisa a few questions to get to know her better – and gain a little insight into her thoughts on price cutting.

What is your background in the beauty industry?
“I started out as a hairdresser at the age of 19. I worked for one man for 16 years then left and opened my first salon 50km out of Melbourne and started on my own thinking I’ll work close to the kids. I sold it nine years later with seven hairdressers and two receptionists. I went to the city and opened a salon however I wasn’t on the floor as I had started coaching.  I sold that salon to focus on full time coaching and developed the franchise model we now have which has seven full time coaches.”

Do you think the skillset to run a profitable salon have changed much since the start of your career? If so, how?
“I think at the start of my career there was a lot of cash around so a lot of salons survived on probably not declaring everything they earned so it was a very lifestyle business. Now everything is accounted for and everything needs to be above the line because there is so much electronic money so I think in that sense it’s changed. However I know it hasn’t changed one bit when it comes to customer care and customer service. If you can build trust and rapport with your client, you have their best interest at heart and you’re prepared to step out of your comfort zone and tell them what they need, it hasn’t changed at all. I think business is business and people buy from people. Nobody cares how much you know until they know how much you care.”

Why do you think so many salons struggle despite the rapid growth in consumer demand for beauty services/products?
“I think they struggle because they don’t understand the business side. It’s not what they love and so they struggle understanding where the money is actually made in the business and which team members are making it. I also think they struggle because in many ways it’s more competitive than ever before so they struggle with getting a team and being a leader. If they understood they can have complete control over their business by becoming a better leader, then they would be in a much better place.”

What is the biggest pro of discounting?
“There isn’t any. You set yourself up to succeed, right?  Most people make 20 percent their profit margin. When you deliver something for 20 percent less then you make nothing at all. And that makes no sense. I don’t believe there should be any reason to discount at all.”

What is the biggest negative of discounting? 
“I think the negative with discounting is that you set the scene of  ‘it’s actually not that price and I can do it for less”. I struggle with discounting because I think that’s the price so if you’ve made your price because you understand what it costs you to deliver it then why are you discounting?  I’d prefer to add value by adding on another service or something of value that you can add to it. It’s like a hotel room for the night…that’s what the bed costs but we can throw in breakfast…. so that’s ‘adding in value’.”

For more information on the BEAUTY & Spa Insiders summit, which will be held in Sydney on May 27, click here.

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