With an emphasis on service and customer retention, this organization is using the economic downturn as a tool. Sam Ross founded Fantastic Sams in 1974 in Memphis, Tenn., and for the last 35 years, the organization has continued to grow. Today, with 1,350 full-service salons operating in the US and Canada under the Fantastic Sams name, the corporation staffs a team of 14,000 individuals and has 800 franchise owners dispersed throughout 25 regional areas.
The company’s corporate team regularly monitors its top 100 salons, and although it doesn’t have polling capabilities, the team can compare certain statistics. According to Scott Colabuono, president and CEO, the majority of the organization’s stores have remained stable as of late, despite the economic downturn.
“Looking at our top 100 salons two years ago, approximately 70% of those locations boasted revenues that were up from one year to the next in any given month. This year, it has come down a bit, but roughly 50% of those locations are still up,” he said. “Considering the economy, we feel very good about where we are as a system.”
In recent months, Colabuono said he and his team have seen the average time between visits expand considerably for many customers; rather than visiting the salon every six or seven weeks, many individuals now wait as long as 10 weeks for a subsequent visit. The reasoning, of course, is cost savings. In today’s economy, people, much like businesses, are cutting costs from every possible angle.
Fortunately for the team at Fantastic Sams, Colabuono noted that the extended interval between visits has been accompanied by an influx of new customers. “The extended interval between visits negatively impacts sales numbers, but what we’re also seeing is something that counteracts that,” he said.
“We’re seeing an influx of first-time customers who are moving down from the high-end salons, and they’re filling the gaps made by the extended intervals. This has actually caused our sales numbers to rise at a number of locations,” Colabuono explained.
Now that Fantastic Sams has gained a steady base of new customers, its team has a new goal: retain those individuals. For many retailers and service providers, it might seem as if this economic downturn will to last forever, but the truth of the matter is that it will not.
Eventually, the economic climate will improve, and when it does, many individuals will return to splurging on things like visits to high-end salons. However, Colabuono is confident in his team’s ability to retain many of the new customers it has seen. One of the primary reasons people go to high-end salons, he said, is the customer-service aspect of the experience.
To help retain the customers who are used to the experience of a high-end salon, Fantastic Sams rolled out an increased number of training sessions at all of its locations this year. “If we can have a trial guest visit our salon three times, we are confident in our ability to hold onto that person long after the change in the economy happens,” Colabuono said.
Although the environment at a Fantastic Sams location is different than that of a high-end, independent salon, Colabuono said it’s important for his team to make an effort to replicate the experience.
“We mandate that the stylists and managers at every location go through training, and our owners reinforce that,” he said. “The training sessions include everything from eye contact to conversation between employees and customers to how to conduct proper consultations. Essentially, they’re about how we can best deliver a great experience.”
Initially, the training sessions were rolled out to each of the organization’s 25 North American regions through a tiered structure, and senior regional educators were responsible for delivering the sessions in their appointed markets. Subsequently, pre-recorded instructional webinars were posted on the company’s intranet as a secondary source of support, used for reinforcement training when necessary.
But the customer base isn’t the only thing changing at Fantastic Sams. Recently, Colabuono and his team rolled out a plan that involved rebranding and repackaging the products sold through the company’s private label.
“When we looked at refreshing our private label, we did it in two ways,” Colabuono explains. “First, we worked with our manufacturing company to make sure that when we re-formulated the products, all of the changes in ingredients resulted in improvements. Subsequently, we wanted to refresh the fragrance.”
In terms of packaging, the organization chose to stick to its original vanilla-white color but made alterations to ensure customers could easily determine between products. “We wanted to make it easy for customers to distinguish between a shampoo and a conditioner and identify if a specific product is made for colored hair versus uncolored hair, for example,” Colabuono said.
In addition, Fantastic Sams changed the way it markets its products, encouraging customers to purchase products according to a specific regimen. Now, there are specific product lines available for those in need of “volumizing” capabilities, for example, and those products are packaged in an easily identifiable way that ties them together.
Right now, the private label products are only sold in Fantastic Sams salons, but Colabuono expects to open different sales channels in the years ahead as the brand moves forward.
“Everyone is raving about the new products,” he said. “They are flying off the shelves, and we’re confident we’ll sell pretty good volumes this coming year despite the recession. Looking two or more years out, we do expect to open more sales channels.”
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