TWO BITS......

The other day, I consulted with a service-marketing veteran to develop my knowledgebase.

Our discussion centered on best practices in profitable marketing and management of personal or professional service businesses.

I listened intently to her perspective, honed from years of analysis and practical experience. She carefully outlined two core techniques: a throughput focus and a retention focus.

She used a hair salon as her illustration.

Cost accounting says the more haircuts in a day, the more money in the register at the end of the night. So, the increased through-put approach emphasizes efficiency would set a strict limit on the amount of time a stylist spends per customer. Quality is second to speed. The downside of this approach is often lower customer service ratings and higher employee burnout.

Marketing says the more repeat business, the lower the cost of marketing and the bigger the bottom line at the end of the year. That’s why the customer retention strategy would stress carefully listening, asking questions, and taking extra time to build relationships with clients. The downside of this approach can be higher service costs.

In her final analysis, the best practice is a blended method that emphasizes long-term relationship-building and system efficiency over raw speed. In a price-sensitive niche, this approach keeps customers from buying on price alone. In a quality-sensitive niche, it produces a greater sense of service quality. In either case, by lowering customer attrition, the business reduces expensive new customer marketing costs. And by building relationships, the happy salesperson/stylist builds a steady stream of commissions and a solid client roster.

The consultant also explained how incremental add-on sales, in our example shampoo or styling gel, can impact the bottom line with little or no increase in service costs.

When my time was over, I thanked Tamara for her sage wisdom and paid her consulting fee on the spot. Her hourly rate was modest -- and I got a free haircut to boot.

- Phil Sasso