TANNING: A \"Commodity\" Or A \"Value Added\" Service? - tanTALK

Don Smith · 06-18-2002, 06:41 AM

[Note: This is the first of a series of "thoughts" I will share with you regarding the fundamental "nature" of our business.]

In order to "thrive" and not merely "survive", it is important to understand and discuss the "most basic strategic issue" regarding the successful operation of an indoor tanning salon.

And "cost vs differentiation" is that "seminal" issue.

If your product or service is perceived as a "commodity" by your clients, you have to be "cheaper" than your competitors in order to thrive and/or survive. If, however, you can "differentiate" your product by creating "added value" in the clients mind, you can charge more for the value you add and prosper accordingly.

The "bottom line" is that convincing yourself that you are "adding value" is pointless if your client base believes that you are simply providing an "interchangeable" commodity (especially since sunlight is free and you probably have competitors offering lower prices!).

Therefore, before discussing a "strategy" to create the perception of "added value" in your client's mind, we must discuss how the indoor tanning industry is perceived by YOUR clients.

Question 1: Do YOU think that YOUR clients view the service (tanning) offered by YOUR salon as a "commodity"?

Question 2: Or are YOUR clients willing to pay more for the "perceived" added value YOU provide?

Question 3: If YOUR clients ARE willing to pay more for the added value you provide, what (in your opinion) constitutes this added value in YOUR client's mind?

Question 4: If YOUR clients are willing to pay more for the added value you provide, HOW MUCH more are they willing to pay?

[Note: After we get some "responses" to my questions (Ask Don can ask questions, not just answer them - LOL), I will continue with this discussion.]

Don

Soakinuptherays · 06-18-2002, 07:28 AM

Very intresting points to consider, your answers form the basis to shaping your business.

BooBop · 06-18-2002, 07:42 PM

Question 1: Do YOU think that YOUR clients view the service (tanning) offered by YOUR salon as a "commodity"?
Some do. Once they come in and figure out that we do the work and all they have to do is relax while they tan, they realize they are special.

Question 2: Or are YOUR clients willing to pay more for the "perceived" added value YOU provide?
Some are. How do you get it across to the others?

Question 3: If YOUR clients ARE willing to pay more for the added value you provide, what (in your opinion) constitutes this added value in YOUR client's mind?
For the ones that really get it, we really cater to them. They feel that if they only have to relax and tan then it is worth the extra $ to tan with us. Some just don't get it.

Question 4: If YOUR clients are willing to pay more for the added value you provide, HOW MUCH more are they willing to pay
Not really sure at this point. Some would most likely pay more than I charge, but would their be enough of them to keep me going? I don't know.

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06-18-2002, 06:41 AM	#1 (permalink)
Don Smith Join Date: Feb 25 2000 Location: Tucson, AZ Posts: 1,643 Rep Power: 26	[Note: This is the first of a series of "thoughts" I will share with you regarding the fundamental "nature" of our business.] In order to "thrive" and not merely "survive", it is important to understand and discuss the "most basic strategic issue" regarding the successful operation of an indoor tanning salon. And "cost vs differentiation" is that "seminal" issue. If your product or service is perceived as a "commodity" by your clients, you have to be "cheaper" than your competitors in order to thrive and/or survive. If, however, you can "differentiate" your product by creating "added value" in the clients mind, you can charge more for the value you add and prosper accordingly. The "bottom line" is that convincing yourself that you are "adding value" is pointless if your client base believes that you are simply providing an "interchangeable" commodity (especially since sunlight is free and you probably have competitors offering lower prices!). Therefore, before discussing a "strategy" to create the perception of "added value" in your client's mind, we must discuss how the indoor tanning industry is perceived by YOUR clients. Question 1: Do YOU think that YOUR clients view the service (tanning) offered by YOUR salon as a "commodity"? Question 2: Or are YOUR clients willing to pay more for the "perceived" added value YOU provide? Question 3: If YOUR clients ARE willing to pay more for the added value you provide, what (in your opinion) constitutes this added value in YOUR client's mind? Question 4: If YOUR clients are willing to pay more for the added value you provide, HOW MUCH more are they willing to pay? [Note: After we get some "responses" to my questions (Ask Don can ask questions, not just answer them - LOL), I will continue with this discussion.] Don

06-18-2002, 07:28 AM	#2 (permalink)
Soakinuptherays I love Derf!! Join Date: Oct 19 2000 Location: Tampa, Florida Posts: 1,160 Rep Power: 24	Very intresting points to consider, your answers form the basis to shaping your business.

06-18-2002, 07:42 PM	#3 (permalink)
BooBop I love Derf!! Join Date: Apr 5 2001 Age: 66 Posts: 7,766 Rep Power: 28	Question 1: Do YOU think that YOUR clients view the service (tanning) offered by YOUR salon as a "commodity"? Some do. Once they come in and figure out that we do the work and all they have to do is relax while they tan, they realize they are special. Question 2: Or are YOUR clients willing to pay more for the "perceived" added value YOU provide? Some are. How do you get it across to the others? Question 3: If YOUR clients ARE willing to pay more for the added value you provide, what (in your opinion) constitutes this added value in YOUR client's mind? For the ones that really get it, we really cater to them. They feel that if they only have to relax and tan then it is worth the extra $ to tan with us. Some just don't get it. Question 4: If YOUR clients are willing to pay more for the added value you provide, HOW MUCH more are they willing to pay Not really sure at this point. Some would most likely pay more than I charge, but would their be enough of them to keep me going? I don't know.

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