Thinking Innovatively is More Than New Ideas
Chicagoans, and many from further afield, have been flocking to Mario Tricoci for more than 40 years. You’d think we were pretty confident we know enough about hair and beauty to be able to sit back and relax. But we aren’t and we don’t. Instead we constantly look for ways to enhance the guest experience to drive up revenue and increase margins. That’s what makes us successful.
Last year, Salon Today Editor-in-Chief Stacey Soble invited me to the Data Driven conference, an industry event produced by Modern Salon Media, to sit on a panel with other multi-unit executives discussing how we use data and metrics to scale. Many of the attendees at this conference, in contrast to the ISBN Conference, were successful independent salons. Many of which are looking to grow, or have already started adding more locations. This is where I met Valorie Tate, Executive Director of ISBN, who was moderating the panel and it was a fascinating conversation which quickly developed beyond the two-dimensional conversation about metrics and data.
We dove into how we used data for discovery, but not a conclusion. My example was the build-out of our location on North Michigan Avenue – the Chicago equivalent in stature and rents to Fifth Avenue. It is home to retailers that offset the high costs and lower margins of the location with the recognition it brings to their brands.
But, few beauty salon owners can afford to think like that, not when we are such a labor-intensive industry. Unlike other retail sectors that have lower operating expenses and where products fly off the shelves, we know that in beauty our costs-to-income ratio is too high.
One way many salon owners address the imbalance is to cut back on labor costs. Speeding up the training of new recruits and transitioning them onto the floor faster brings an increase in revenue, but it’s not always an option. A high-end business-like Mario Tricoci can’t compromise on service, nor do we plan to relocate any of our 14 hair salons and day spas to unfavorable areas even if they have low occupancy costs.
So, we focused on factors that could squeeze this ratio without impacting our service levels. The obvious starting place was taking advantage of technology that create operational efficiencies. Our booking is faster and easier now through our own customer mobile app. Guests can rebook an appointment with only a few clicks or check themselves in for their appointment. This has reduced pressure on the front desk, cutting staffing needs.
Our next step, coming live shortly, will be to roll out transactional capabilities to the service provider. Using a hand-held device they will be able to add retail to the guest invoice directly and rebook their guest’s next appointment. No need to spend extra time at checkout booking appointments and adding retail, although we still give our guest the option to check out at the front desk or pay through their app. The app checkout allows the guest to add a gratuity as desired, and later it will then prompt guests to rate their service. We are already noticing more efficiency and productivity with our front desk team.
On the flip side of cutting costs is increasing revenue so we continue to launch products into our private label, something we did many years ago. But this also means constantly innovating. Each year we will retire one or two items from the range and introduce new ones to keep the brand current. Plus, we have historically rebranded when necessary to keep the line fresh.
But, possibly the greatest example of ‘thinking out of the box’ was the way we got ‘more for less’ in North Michigan Avenue. We took over an old movie cinema that had character and the potential to reduce costs-to-income because of the high ceilings in the space. They allowed us to build platforms that gave us an additional 2000 sq ft, none of which came with additional rent. It made choosing such a prestigious location financially viable.
Creative problem solving and finding ways to stay true to the brand without skewing the financial metrics you know spell out success was definitely the key to successfully taking up residence in the most prestigious area of the city.