As personalization and technology are becoming increasingly important in the beauty industry, Laurie O’Neill, owner of Salon@Church, shares her journey to salon ownership and the innovative strategies she’s implemented. Join us as we explore her approach to success, the importance of transparency in pricing, and how tools like Aura Salonware and SalonScale have transformed her salon experience.
How and when did you venture into salon ownership?
Laurie: The previous salon that I was at went through a change of ownership. I took this as a sign to go out on my own. We purchased our building in October 2019, with hopes of opening in May 2020, and then the world shut down in March 2020. So, obviously, that didn’t happen. I finally opened Salon@Church in September of 2020.
What the lockdowns did for me was that I had ample time to do a ton of research on opening my business. During that time, I looked into every possible software. I think I had about 15 different demos with different software and different companies. I had to look for what was best suited for me and what I wanted to bring to the company. I wanted to be technology-forward, and I wanted something that was growing, and that could grow with me as well.
Why Aura?
Laurie: It was a very personal approach, and they treated me amazingly. And it wasn’t dated software. It was new and innovative, and I just found that everything that was shown to me made sense. It had all of the reporting that I wanted, it had the text marketing, and it all just made sense.
What are your favorite Aura features?
My favorite part is the comparisons—the year-over-year or month report where we can see if we are increasing or decreasing in business. It also allows me to plan for staffing and promotions. I am obsessed with that report. I love it for my staff and for the business, especially for those stylists who think they are not growing, and I can say, “Look where you were last year.”
What prompted you to seek the parts and labor pricing model?
Laurie: I knew right away that I wanted to do the parts and labor thing. That was a new “thing” in 2018 and 2019 when I started hearing about it. We wanted to implement it in the other salon I worked for before, and it was not the right time. It was a bigger salon, and it would have been a hard move for them. But I knew that opening my own salon would be a fresh start. It was an easy way to implement it right away.
I decided to go with SalonScale and implement the parts and labor right away. There were obviously learning curves with that. When we opened, I didn’t mark up the product right away. I wanted to see where it was, and when I looked into the pricing for our services, I knew we had to stay competitive in the area. When I assessed the numbers, we were able to increase the markup. Our back bar maintains a significant profit margin, which is typically a huge liability for salons. That was huge.
How do Aura and SalonScale work together for you?
Laurie: I married the two of them – Aura and SalonScale – and it goes under retail for the staff, so they get paid a commission, up to 20% on their hair colors. As a salon owner, if it were a backbar fee, the staff would see that as something they’re not getting paid for. Instead, it turns it around as something they are getting paid for. Even though it’s not structured like their service commission. The lower percentage helps the company maintain profit and reinvest in education, and they see it as an add-on bonus money versus what they should be making as their service sales.
What about the parts and labor method made you want to introduce that?
Laurie: Cost savings and personalized pricing. With the previous pricing structure, somebody with short hair like myself paid the same amount as someone with hair down to their waist. I like transparency. I like personalized pricing. With what we do as hairstylists, everything is customized; so, I think pricing should be customized as well.
We’re seeing more consumers wanting customization and a personalized experience. How do you communicate your parts and labor pricing structure to your clients?
Laurie: It’s on our website, but they might not know what that means. Every single person, new and revisiting, gets a quote of how much it will be, and we explain that we are parts and labor.
If they look at us like we have three heads or ask what we mean, I bring it back to an oil change analogy. If you take your car to the mechanic for an oil change, they’re charging for somebody to do that oil change, plus for the oil, filter, and any product used. As soon as we explain that, they say, “Oh, that makes sense.”
Most people have had their hair done before, so they can say, “Oh, yeah, they always take more time on me,” or “Yes, they always need to remix more lightener. “We respond that we only charge for what we use on you. It’s not like we’re charging you $500 and only using x amount. And then they seem to understand. Sometimes, we get flack, but the majority understand.
Is your pricing policy also mentioned on the client app? So, when customers go to book online, is it listed there?
Laurie: We have it in the description of services. If it lists a partial highlight, it says we are a SalonScale company and the cost of color will be added to their investment.
When you say you’re a SalonScale company, do people ask what that is?
Laurie: We also send receipts with every transaction, and sometimes, I get an email back asking what SalonSalon is. I clearly state that this is the cost of the color used on you.
How did you implement this in your team, or did you already have it while building your team? Was it just a part of their onboarding when they came in?
Laurie: So when I opened there was me plus two. When I opened, they were educated right away, and kind of built it with me. We went through the hiccups, like client fixes and what to do with that and how much we should mark things up, and now it’s part of the onboarding system.
What is your perspective on why we have not fully embraced the idea of clearly communicating the costs associated with providing services—such as the materials we purchase and the compensation for our team? What do you think keeps people from adopting this approach?
Laurie: The salon business is hard and knowing and dissecting numbers is hard. I think it’s unfortunate that a lot of people don’t know their numbers let alone their profit margin. Not knowing would make implementing something that is more detail-oriented can be scary. It can definitely be overwhelming to try and break that down and understand it to see where your money goes. It’s easier to charge a flat rate of x amount and figure it out afterward, instead of first.
What are some of the reports in Aura that you use to track your profit margins, costs, and all of those details?
Laurie: In the retail sales report, we do count SalonScale as a retail sale. Then, in my spreadsheets, I break it down further: our actual hair care products versus SalonScale, and then the appropriate mark-ups. In the report, I can see where the top SKUs are with products. The majority of the report is a retail report; however, the service report is another I frequent to dissect our productivity.
Adding it in is a retail item, doesn’t that impact your retail-to-service percentage?
Laurie: Yes, it does, but I use my own spreadsheet to break it down further. I think our year-to-date is 40.5%; it’s typically maybe 10-15% in the industry. So, I take our total retail minus the SalonScale, and then I have my appropriate retail-to-sales percentage, which is still sitting at 22% for the year.
Do you think people who receive color services buy more retail versus somebody who comes in for a cut for other services?
Laurie: People who receive color services tend to purchase a higher amount of take-home products. They probably have two or three products, but someone who comes in for a haircut leaves with just one.
How would you say SalonScale impacts your business financially?
Laurie: I had it set up appropriately, and by having it right away, I could see my profitability and the cost. If I opened, having everything included in the pricing, I would not have been able to last through COVID-19. Now four years later, the backbar is able to maintain being profitable as well as I’m able to reinvest in incentives for the stylists.
Is your team checking clients out chairside? If so, do you feel confident that they are adding the SalonScale amount and putting that number incorrectly?
Laurie: Yes, we’re all doing the checkout, which I love about Aura.
I would say 98% are entering the amounts and doing it right. I also hold them accountable each week. They check SalonScale and Aura to balance their totals. If those don’t match, they know I’m going to bug them on Sunday, and they do not want to be bugged on Sunday. (said laughing)
