Why The Time Is Right To Target Salons

Looking For Time Savings In Phase I

From scheduling appointments to managing walk-ins, salons and spas present unique POS opportunities. Offering solutions that allow customers to efficiently manage their business while focusing on what’s important — keeping their customers satisfied and spending — is paramount in today’s competitive selling landscape. Recently, Rohan Mani, Director, Reseller Division at Harbortouch, took time to speak with The Business Solutions Network about why you should be targeting the salon market, how to overcome the significant challenges it presents, and more.

Q: What makes the salon market an ideal target for POS sales?

Mani: Salons and spas represent a considerable opportunity for VARs. With over 85,000 locations in the U.S., this vertical is largely underserved in the POS industry and is expected to grow in the coming years. The market is highly fragmented without any dominant POS solution, so there is definitely a void to be filled. Additionally, salons have unique needs that cannot be adequately met with a standalone credit card terminal or cash register. These requirements include appointment setting, walk-in management, multi-station support, and email/text reminders. All of these needs can be easily met with the proper salon and spa software.

Q: What makes this vertical attractive from a payment residual point of view?

Mani: Salons and spas tend to process consistent transaction volume without any significant seasonal fluctuations, so these locations can help provide a stable and lucrative residual stream. Additionally, revenue growth is expected to increase over the next five years, rising at an average annual rate of 3.2 percent to $58.7 billion by 2019.

Q: What key things do VARs need to know in order to succeed in this market?

Mani: Like in most other verticals, budget is paramount. Being able to deliver a feature-rich solution at an affordable price-point will open up a lot of doors within this market. The challenge is finding the right solution to offer that strikes the right balance between cost and functionality. When it comes to the required payment technology for this market, the solution must be able to support tips as well as multi-station locations in which the stylists rent their chairs from the owner and track their payments separately. Additionally, some locations require recurring billing for membership fees.

Q: What are the most significant challenges in this market that VARs are best positioned to address?

Mani: Many salons and spas utilize a multi-station business model, or a chair rental program. This means they need multiple credit card machines or one machine with different logins so each stylist can accept cards under their own individual account. With a POS system, this is consolidated into one account and it's easy for the manager to reconcile each individual's daily sales by running a report. This also reduces the considerable amount of work that would normally be required when a stylist leaves or a new stylist is added. With multiple service providers, countless services, and numerous retail items, even locations that don’t have a multi-station model still have a tremendous need for comprehensive reporting which can be easily solved with a POS system.

Q: Who is the typical decision maker? What is the sales cycle?

Mani: Most salons and spas are independently owned so the key decision maker is usually the individual owner or a small group of partners, with some input from the salon manager. Independently owned salons have a very similar sales cycle to retail stores and restaurants since the ownership situation and decision-making process is typically in line with other small to mid-sized businesses.