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Old 03-07-2006, 12:31 PM   #11 (permalink)
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Re: Unlimited tanning blues

There are also sign up fees. They are hoping that those on the $29/month will upgrade evertime they come in. They are also looking at lotion/accessory sales. Also, Some may tan everyday, but many will not, and there are those that won't tan at all, but they are still getting charged fot it.
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Old 03-07-2006, 12:51 PM   #12 (permalink)
 
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Re: Unlimited tanning blues

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Originally Posted by SunSplash-HI
sunsally,

I understand that some expenses are fixed, though as a whole the more tans I put out, the more it's going to cost. :)
Sounds like you don't need to let anyone tan! If you don't let anyone tan, your expenses are as low as possible and you will keep your losses to a minimum.
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Old 03-07-2006, 12:57 PM   #13 (permalink)
 
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Re: Unlimited tanning blues

:) If I could just find that one person sunsally was talking about that would be willing to pay me $100k for a tan then I would be all set. Maybe just focus on finding that one person a month.
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Old 03-07-2006, 01:10 PM   #14 (permalink)
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Re: Unlimited tanning blues

Sunsplash --

All those things are true - ONCE YOU ARE AT CAPACITY (not yelling at you with my caps, I am just an emphatic speaker and get frustrated by email when I want to be waving my arms and jump on boxes!)

So yes -- once all your equipment is full, you'll need to buy more. That's a happy thing! More marketing? Maybe. But once you are smoking like that, it's probably as much word of mouth as anything else. Hire another employee? Sure -- another $7/hour to babysit a whole salon's worth of equipment and buyers. You are still WAY ahead of things here if this is the situation!

Another way to think of it, is instead of price per tan, how about yearly average per customer. Take your data base. Divide the total yearly money you made for the year, by the total number of customers in your data base. This is the yearly revenue, PER customer, PER year. Let's say it's $65 (about the industry average I believe).

Now - calculate again. This time, calculate what you want to MAKE -- your total estimated expenses, plus the profit you want to make. Divide this by your total number of customers. How much do you need each of them to spend, PER year, to get to this number?? For many -- a GREAT number might be $100/year.

SO - how can you get them to each spend $100/year?

One option, is rather than offering a month for $50 and having them think "wow, that is alot -- I can only do that for my pre-vacation times but not the rest of the year", offer a YEAR for $100. If you can sell them 2 months for $50 now, couldn't you sell them a whole YEAR for $100 instead??

And now that you have that $100 in your pocket, a month or so later, can't you get them to spring for a bottle of lotion to really help get the best color possible? Heck, at this point, they don't really "remember" paying to tan - it seems free at this point. So now they've spent $140 maybe. How about the next month -- think you couldn't get them to do a couple of upgrades for $5/pop to really kick it up a notch and break through a plateau??

That is what the model of EFT's are designed to do. Trying to get MOST of your customers to spend more -- by making it seem like they are spending less.

And at only $29/month --- I"m actually making $350/year on the customer -- BEFORE lotions or upgrades.

How much would you make if each customer in your data base spent $350/year with you? I will bet my salon that it is more than you make now -- more than MOST of us make!!

But again - a LOT Of math and economics here! You're right -- if I have 4 beds, and my monthly expenses (rent, payroll, electricity, bank loans/leases, etc) are $9,000/month, I'm sunk! Because with 4 beds -- at let's say 20 mins/session - for 12 hours/day --- I can only see a MAXIMUM of 4 beds x 2.5 sessions/hour x 12 hrs/day or 120 tans per day. Period. If I have them scheduled back to back, each minute of the day, all day long. Which never happens of course!!

So let's say it's only 100 customers/day I can serve. If the SAME 100 come EVERY DAY, at only $29/month ---- I can only make $2900/mo -- and I'm bankrupt.

If they come, on average - every other day -- still only 200 customers -- and I can only make $5800.

I need them to come no more than every third day -- and booked solid all day - every day of the year -- to even break even.

Or, my expenses need to be lower, or I need to have more equipment (but at the same expenses!) or I need some of the income to be boosted by those upgrades, lotions, etc etc.

Ultimately, each salon has to figure out for themselves what it "costs" them just to open the doors every morning and keep them open. Then they need to figure out how many customers they can attract (your marketing) and how much they can get them to spend (your pricing and sales strategies). And HOPEFULLY they did ALL of that before they ever signed their lease!!!

A LOT tougher than it looks to our clients who think "I oughta open a tanning salon - it looks pretty easy and I bet they are rolling in the dough!" :-)

But - ultimately - ever salon determines their "point" on the supply demand curve. You can charge a lot more, have a lot less demand, but still make as much profit as someone who charges less and has more demand. You just have to make sure it is enough to cover your costs.
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Old 03-07-2006, 01:12 PM   #15 (permalink)
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Re: Unlimited tanning blues

Quote:
Originally Posted by SunSplash-HI
:) If I could just find that one person sunsally was talking about that would be willing to pay me $100k for a tan then I would be all set. Maybe just focus on finding that one person a month.


HEY - no way. It is MY idea and I get that one person!!!

LOL!
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Old 03-07-2006, 01:18 PM   #16 (permalink)
 
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Re: Unlimited tanning blues

You are missing something. $19.99 unlimited for level 1 beds. Level 2 $2 upgrade, level 3 $5 upgrade, and level 4 $9 upgrade. Almost everyone upgrades.
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Old 03-07-2006, 01:20 PM   #17 (permalink)
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Re: Unlimited tanning blues

Yes, you want everyone to upgrade!
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Old 03-07-2006, 01:25 PM   #18 (permalink)
 
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Re: Unlimited tanning blues

My 1-month unlimited is $50. My single tans are $6 for adults and $5 for students.... in a level 1
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Old 03-07-2006, 01:32 PM   #19 (permalink)
 
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Re: Unlimited tanning blues

I agree with everything you said sunsally and am somewhat playing devil's advocate. The reality for us is that we do like most...we underprice some things and know that some will never come and some will use it to full capacity. I wondered if others had some creative logic or other considerations to help me think a bit outside the box.

The tricky part for us is that everything here is soooo expensive that even based soley on variable expenses (electricity, bulb use, credit card processing fees, etc.) we're at something like $2 a tan and that's without marketing, labor, rent, blah blah blah. So in walks customer bob and he's like, "I tan at salon y and it's so cheap." You know the salon...every city has one. They charge some crazy low price that doesn't make any sense. In our case, the nation-wide gym that owns it must subsidize the tanning because even with my 8 years of college, I can't make sense of how the volume and revenue would match for them.

Anyway....thanks for the feedback all. It's very much appreciated.
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Old 03-07-2006, 09:35 PM   #20 (permalink)
 
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Re: Unlimited tanning blues

My regular price for unlimited tanning is $75.00. I realize this is pricey and decided that when we recently upgraded our regular beds we'd increase the no-limit charge some. We do however usually have a promotion with it (not everything else) Depending on the time of year we may put on sale at $59-$64 or add 1-2 weeks free. The perceived value is greater. I have no interest in competing with the Hollywood Tans of the industry. We offer special student pricing also. Again this is just unlimited for our reg. beds. Upgrade charges range from $5-$27.
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