Historically every decade-ish, we have some kind of recession. In August 2019, the Dow dropped 800 points, and everybody thought the recession was coming. From time to time, we see a dip in the market or something internationally occurs, making everybody very nervous.
The term that keeps popping up now is that we’re overdue, right? We’re on borrowed time. Like at any possible moment, the ground beneath us will give.
But if we know we’re on borrowed time, that’s an amazing gift because we see the recession coming and be able actually to plan for it. We’ll talk about how to do that today and find the right mindset so that when it does happen, you’re prepared.
Crash Course in Recessions
Let’s take a quick look at the recessions in the last 30 years:
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We had a dip in both the early eighties and early nineties
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There was the late nineties dot-com crash
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We had a brief recession due to the attacks on September 11, 2001
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And in 2008, we had the Great Recession
The Great Recession was huge and hit much harder than previous ones. It was caused by the subprime mortgage crisis where many under-qualified people bought homes because banks were loaning out money left and right. People lost their homes, jobs, retirement savings, and even their lives.
In our industry, there was an overwhelming feeling of panic and victimization. Senior stylists panicked and even left the industry for early retirement or more traditional jobs. It felt like everything was out of control, and we were just riding this wave, waiting to see what would happen.
So many of us panicked and scrambled to put something – like deep discounts, specials, offers, price breaks, price negotiations, crazy hours (aka reactive marketing) – in place to stay afloat. It’s a stress scenario waiting to happen, right?
And, in November 2008, when sites like Groupon came out, the entire conversation changed. It was no longer about how much you spent, but about how much you saved.
Even a decade later, that mentality hasn’t died out. People still look to get their money’s worth. It’s not that they’re looking for a discount, but they want to make sure the value is there.
Let’s go through six ways to proactively set up for success and make clients feel comfortable staying in our chair when another recession hits.
Be proactive when it comes to marketing
Always be proactive, not reactionary, when it comes to your marketing. Reactionary looks like:
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Panicking to fill your chair when you realize you’re slow this month
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Realizing you don’t have a post-maternity leave plan to make sure business is booming when you get back.
Don’t put a band-aid on the boo-boo. You have a marketing system put in place so that the boo-boo never even comes up. It’ll be a thousand times easier to maintain existing marketing efforts than starting from ground zero when everything hits the fan.
When times get tough, consumers align with confident businesses, not overcharging ones or those who look like they’re on the edge of closing their doors. Instead, have a confident, constructive system in place now, so when things go sideways, you keep on keeping on.
You need to be that stylist for your clients because when a recession hits, 90% of our industry will panic, offer coupons, or take the financial loss discount. You can have systems in your business help you go through hard times and come out on the other side.
Remember that not everybody is affected by recessions
When we hear the word recession, we think nobody has money to spend, and everybody’s wallet is closed. But everybody’s affected differently. Some people lose their homes, jobs, life, retirement, everything. Others are prepared and fare differently when the market turns sour.
A big part of the problem from the 2008 recession is that credit stalled, which is pretty typical. It was harder to open a regular line of credit, and you definitely couldn’t get a home loan unless you were extremely qualified. Consumers who relied on credit will really felt it, but those who were set up financially, life moved forward.
Know that 100% of your clients aren’t necessarily hosed. Some will be, and there are things we can do to make that guest feel more comfortable. But some clientele won’t feel this crunch in the same way, and they’ll want to align themselves with confident businesses who are not in a panic. If you turn into the stylist who hands out coupons and discounts constantly, they’ll leave you because they don’t want that kind of energy around them. They want to be around people who prepared for this.
Our industry is safer than many others
In a lot of ways, our business is recession-proof. We don’t sell luxury items, and our services won’t go out of style because most people won’t let their hair go shaggy. They’re not necessarily considered a luxury, whereas five-star hotels, airlines, places like that need to panic when a recession hits.
Hair is one of the things that a lot of people want to maintain, but it doesn’t mean that they won’t change their service. Consumers will change to more low maintenance styles, but it doesn’t mean they’ll give up on doing their hair altogether. Recession coloring techniques like the ombré (the one with four or five inches of roots) will come up again because it was a money saver, and that look is still in style.
Guest experience will be key
Companies like Madison Reed, who ship your hair color to you if you can’t make it to the salon, were born and thrived in the last recession. If we’re going to compete with them, guest experience is your secret sauce.
Sure, your guests get your intelligence, your warm, friendly hugs, and your amazing personality, but it needs to be a little bit bigger and better than that. Clients come to the salon for the experience, to feel confident about themselves, the conversation, and the feeling of being spoiled rotten. Good color is easy to come by. A killer experience is the secret sauce.
Unless your guest experience is better than any other stylist in town, you will struggle and suffer. It can’t just be fun. It has to be so good that if clients cut expenses, you aren’t even a consideration because you’re a key part of their lifestyle.
High end services might suffer
If your business is 100% extensions or balayage, know that not everybody is going to be able to maintain that service during a recession. Ask yourself if your extension client says they can’t afford it, what can you do to make it still work?
Some of you reading this are spray tan technicians, makeup artists, massage therapists, extension specialists, color correction specialists, texture service specialists. You might want to be a little nervous during a recession because those services could be considered luxuries, not necessities.
Shift your service offering to make yourself more accessible. For example, market more therapeutic healing massage versus luxury massage now to make your services feel like a necessity. Are there some things that you can do to put yourself into that necessity category? What can you add to your service menu that makes you a little bit of necessity versus luxury?
If you don’t want to change anything, make sure you have enough cut and color guests to float your boat until we get to the other side.
Have a marketing funnel in place
Picture this: a client sees you on Instagram because you tagged her friend in a photo, used a hashtag well, or maybe you even paid for advertising. She likes your work and clicks the link in your bio to check out your website. She likes what she sees and books an appointment.
Very rarely will that client just pick up the phone and call. She’s going to Google you, check out your social media, browse your website and then decide if she’s going to call or not.
Having a marketing funnel in place means an endless stream of referrals coming in, even during a recession. It’s not a referral program; it’s something totally different than that and helps you increase your income without working harder.
Don’t panic about a recession; be proactive. Work on building that long term strategy, so when the recession happens, you don’t take much of a loss because you are properly prepared if the market takes a dip.
