Welcome back to another episode of the Hair B&B Podcast, where I help you level up your skills and your business. I'm your host, Mirella, and today we’re diving into a topic that’s on everyone’s mind – navigating through a recession as a hairstylist.
Recessions can be a scary time for any industry, but for us in the beauty industry, it can feel particularly daunting. Now everybody says that the beauty industry is recession proof, but as someone who has lived and worked as a hairstylist through one of the largest economic crashes, and I’m talking the Great Recession of 2008, I saw a completely different story.
And I’m going to be honest. Some of you listening to this are not going to be hairstylists in the next six months to a year. Some of you will allow this coming recession to dictate your future career path. If you don’t implement the things you should be doing in your business today, you will see a down turn in clients, retention, and sales. I want to prepare you for what’s possible to come so you can get in front of it.
Now awhile ago I shared an episode titled 5 ways to prepare for the recession as a hairstylist so after you listen to this one, I want you to go back and take notes on what you need to implement today. I will also link it down below in the show notes so you can find it because I do think there are some valuable takeaways and ideas.
In this episode, I want to share with you my own experiences from the 2008 recession, a time when I was working at Ulta as a salon manager. I saw firsthand how different segments of our industry responded to the economic downturn, and I learned valuable lessons that can help you thrive even in tough times.
Let’s get into it.
Back in 2008, the economic landscape was incredibly challenging. Many independent salons were hit hard. I saw so many talented hairstylists feeling the pressure, their client bases dwindling as people cut back on discretionary spending. Some had to close their businesses or switch careers entirely. It was heartbreaking to see, especially knowing how much passion and effort goes into building a salon from the ground up.
If you're wondering if the beauty industry is recession proof, my short answer is yes and no.
Something you need to understand is if people don’t have money or jobs, they are not going to spend money, even on their beauty services. And what we went through in 2020 is completely different than what we went through in 2008.
According to Forbes: “The Great Recession of 2008 to 2009 was the worst economic downturn in the U.S. since the Great Depression. Domestic product declined 4.3%, the unemployment rate doubled to more than 10%, home prices fell roughly 30% and at its worst point, the S&P 500 was down 57% from its highs.”
People lost a ton of money in the stock market, people's 401Ks took a huge hit and people who could afford luxury services lost their jobs.
So I want to share a story with you. I vividly remember the day that the stock market crashed. I had a client that sat in my chair who was in her 60s and she was getting ready to retire. I remember that entire year before she would share how excited she was about retiring. She would share all her plans, her bucket list vacations and places that she wanted to see. But that day when the market crashed her whole future retirement plans changed.
As she was getting her hair done with me I remember she pulled out her phone and was looking at the news and then the stocks. And she couldn't believe what was happening. I remember the panic in her eyes and she was like no way is this happening. She then opened up another app on her phone that showed the status of her 401k. Almost 50% of her 401K savings gone within seconds. With Tears In Her Eyes she had the realization that she was not going to be able to retire like she planned. This was Devastating.
Not only did half of her life savings go away in a blink of an eye but home prices started to depreciate meaning all of the equity that she also built from the home she owned was also not worth what it once was. Again, affecting her retirement plans of selling her home and cashing out on everything that she built. Her American dream was completely shattered.
Decades of time that she worked and invested completely worth nothing. That is the impact that the 2008 recession had. As a hairstylist I had to witness this time and time again. But to be completely honest I couldn't relate to some of the things that they were experiencing. I didn't own a home, I didn't invest in a 401k, But I was $40,000 in credit card debt living paycheck to paycheck watching my hairsylist friends struggle to keep their clients, and me wondering if I was next. Now how I got out of that debt to owning a home and building a 7 figure business is a completely different story.
Now a lot of my friends who were working at independent salons in southern California were struggling. California has more hair salons per capita than any other state. We love feeling beautiful! What they saw is a huge decline in blonding services, holes in their days, a rise in no-shows, people skipping hair appointments, and some even started sharing chairs so they could afford the booth rent. I even saw booth rent salon owners offering single day rate chair rental just so they can keep the lights on. Shit was tough! And hairstylists didn’t even know how to navigate through it!
Meanwhile, I was working at Ulta as a salon manager, which is a corporate chain salon, and our story was quite different. Despite the recession, we were kinda thriving. Now, why was that? What made the difference?
First, let’s talk about the benefits of working for a corporate chain during tough times and how we can learn from them:
1. Marketing and Promotions:
One thing that Ulta had was the resources to run significant marketing campaigns and promotions. Keep in mind this is pre instagram days so marketing yourself looked completely different. And today, we have a HUGE ADVANTAGE.
Ulta’s marketing campaigns brought in a steady stream of clients looking for affordable luxury. Something that independent salons did not offer or couldn’t offer because they closed their doors or hairstylists moved. People might have cut back on other expenses, but many still sought small indulgences, like a haircut or a new hair color, especially if it was part of a promotion.
Some of these promos were a free haircut with color retouch services or a free gloss with retouch for first time clients, or BOGO offers like bring a friend and one friend gets 50% off their color service.
The other thing that Ulta did so well was reward existing clients with their points. Clients would rack up their points and cash them in for free services. This built loyalty with our clients and rewarded them for coming back and in turn they didn’t feel like they were breaking the bank.
What clients saw was value and if you were a good hairstylist working at Ulta, you definitely were building quickly.
In 2008 I was racking in $2000 a week in services working 4 days a week and that’s not including tips. My stylists, even the new ones, were almost doing the same. Between 2008-2013 was the time I grew my salons to be one of the top 5 salons in the company, during a recession!
Now I’m not sharing this info to tell you to cut back on your prices or create these crazy promos. But what I am sharing is some incite so you understand value. What you have to do is evolve with what’s happening around us. Marketing and promos is something Ulta got right. But Don’t get it twisted. Value does not equal price. Price is what you pay but value is what you get. Let me say that again.
PRICE IS WHAT YOU PAY, AND VALUE IS WHAT YOU GET.
What you get could be a 5 minute head massage during the conditioner, a warm towel with essential oils, a seamless check in & checkout process, a valuable points system or email promos to reward existing clients. There are so many ways you can add value without cutting profit.
2. Product Availability:
Now the next thing that Ulta did so well was having an abundance of Product Availability. Being part of a large chain meant we had access to a wide range of products and could offer competitive prices. Clients appreciated the convenience and the perceived value they were getting, which kept them coming back.
What’s crazy is I can’t tell you how many times clients would come in from another salon, where they just got their hair done, and ask if we had a particular product. Sometimes I would ask them why they didn’t buy it at the salon they were just at, and many of the responses were “they didn’t offer it to me”.
Do you know how crazy that sounds? Your client drove to Ulta to buy a hair product because you didn’t grab the product off the shelf and tell them to buy it! Lesson here is your client shouldn’t have to ask you about the products you are using. You should be telling them all about it during the service and have those products available at the front and offer it to them SO THEY KNOW YOU SELL THOSE PRODUCTS!
I want to share another crazy story: This one time I had a customer walk-in looking to purchase the product that was used by her stylist from a salon down the street. She just got her hair done and it was evident because she had these crazy color stains all around her hairline. I remember asking her why she didn't purchase the product from her stylist and she blatantly told me that she wasn't even sure that she carried the product at her salon.
What was even crazier is that she was completely aware of the color stains on her skin because she was slightly embarrassed at the fact that she was walking around looking like she freshly got her Gray's touched up. Now this gave me the perfect opportunity to offer her something that her stylist couldn't. And that was bring her back to my salon and simply take a color remover wipe to remove the hair color stain around her hairline.
She was so excited that she didn't even know that color wipes even existed because her stylist never offered that. She would just try to shampoo it off and it never worked. So she just assumed that in order to get her hair color done, she had to suffer through a few days of stained skin.
This customer not only purchased the product that she was looking for but I offered her something that was valuable to her and that was leaving the salon not looking like she just got her hair color done. she left Ulta with my card and lo and behold she had an appointment on my books a few weeks later. What her long time hair stylist couldn't offer her was something so simple like a color remover wipe to remove the color stains. This provided added value to the client because now she felt confident in the hair that was just done for her.
Lesson here is offer the products. Educate your clients about the products. And do your client’s a favor: Don’t let them leave the salon with color stains. Thank you!
3. Training and Development
The last thing that Ulta did right is they invested in its employees by providing ongoing training and development opportunities. This not only helped me improve my skills but also gave me inspiration and the confidence to offer the best services to my clients.
One thing I've learned is after taking a color or cutting class and have all these brand new ideas, I am so excited to come back to the salon and offer these new skills to my clients. And what this does is it makes my clients excited too and they are looking forward to changing things up a little bit.
Because let's be real, clients get bored easily and when they get bored and you’re doing the same services again and again, they might go somewhere else. This is why it's so important for you to continuously ask your clients how they're feeling about their hair. This is going to guide you on what types of add-on services you can offer. The worst thing that they are going to say when offering those services is no.
When times get tough is when you start investing in your skills. Take education! Taking education doesn't mean you have to spend thousands of dollars either. One thing that I did early in my career is I spent every Sunday and Monday taking free or low cost classes at my local distributor store. Most of them were topics on product knowledge or simple technique classes but a lot of these same classes that I took at the distributor are now available for free online through your favorite brands.
Another great free option is my YouTube channel. You can take advantage of the free hair tutorials that I have available online, and if you're ready to level up your skills and business I created Hair B&B University which is an affordable subscription-based platform built specifically for hairstylists. Open enrollment happens a few times a year but it's a great space to not only have in-depth hair tutorials on color correction highlighting updo styling social media and business but there's a community of other hair stylists just like you built right inside who you can learn from. if you want to learn more about this amazing platform you can head to hairbnb.com and head down below to the show notes to grab the link.
So, what can we learn from the 2008 recession that applies to today? Here are some key takeaways:
1. Diversify Your Income Streams: Whether you’re in an independent salon or hairstylist, finding multiple revenue streams can provide a safety net. This could be through retail sales, offering new micro services, or even creating digital content on multiple platforms to promote your products.
2. Build Strong Client Relationships: In tough times, your relationship with your clients is more important than ever. Offer personalized experiences, follow up with them, and make them feel valued. And invest in some color wipes people and offer them the damn product. The worst thing they will say is NO. A loyal client is more likely to continue supporting you even when they’re cutting back on other expenses.
3. Invest in Your Skills: Never stop learning. The more versatile and skilled you are, the more valuable you become. Clients are willing to pay for expertise, especially if it’s something they can’t easily replicate at home.
4. Leverage Technology: Use social media and online booking systems to your advantage. They can help you reach a broader audience and streamline your operations. During the 2008 recession, we didn’t have as many digital tools at our disposal, but today, these can be game-changers.
5. Stay Positive and Adaptable: Attitude is everything. Stay positive and be ready to adapt to changing circumstances. Flexibility can make a significant difference in how you weather the storm.
Recessions are tough, but they also present opportunities for growth and innovation. By learning from past experiences and staying proactive, you can navigate through challenging times and come out stronger on the other side.
**[Closing Music]**
Thanks for joining me on HairB&B I hope you found my podcast helpful! Get more FREE education on my website mirellamanelli.com as well as YouTube, Instagram, and TikTok. But if you are looking for more education on Hair & Business, checkout Hair B&B University - The Ultimate Business Makeover specifically for hairstylists! It’s a place where you can learn at your own pace, turn your passion into profit and gain confidence behind the chair. All you have to do is tap on the link in the description notes and sign up for the waitlist to be the first to know about open enrollment.
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Now I'll see you in the next episode and be ready to simplify your hair, beauty, and business goals on HairB&B. Cheers!