Salon Spark Blog

with Phil Jackson

Free Salon Software - too good to be true?

Is free salon software REALLY free? OK. I admit it. I’m a bit of a geek. Latest gadgets? No – they’re must-haves. Digital currency, Alexa, Siri – bring it on. Computer implant behind my ear? Sign me up. I love technology and I can honestly lose hours staring at spreadsheets. So it’s no surprise that when I opened my own salon in 2001, we had a huge lump of a PC sat on reception from the start. Way before it was the norm. And certainly before free salon software was on the radar. Fast forward to today and through my work as a salon business coach I see a lot of different set-ups. From multi-site installations, server-based or cloud-based down to people running their entire salon from an iPad or even their phone. And a noticeable trend towards smaller salons using salon software that doesn’t even cost them. I can understand why! The salon marketplace is overcrowded and competition is fierce. Lots of salon business owners have tried to stay competitive by keeping costs as low as possible. I’ve always looked at the cost of software spread over the number of clients in a month and priced it in, but some don’t see it that way. They see a monthly bill and want to squeeze it. They make the choice to hunt for the cheapest rather than the best. But doesn’t it bother you? Do you wonder just how this software can be free? And free forever? Scratch the surface. I did! I admit I made some crazy assumptions about this. In fact I thought free salon software was only possible if it were engineered by a fellow geek in a back bedroom somewhere. But that’s not the case. Some of these companies are back by huge investment with fierce targets for growth. But if you were giving something away free, why would you want tens of thousands of people to take it? When is a software company not a software company? The thing is companies that provide free salon software for life are often not strictly software companies at their heart at all. At least primarily. Their business model is much closer to Uber, or Deliveroo – they are connecting clients with salons. They’re building a marketplace. The problem is, building a marketplace with any kind of scale is enormously difficult and very expensive. It would be impossible for Uber to attract customers without a fleet of drivers available at short notice. But it’s hard to attract drivers without having a large number of customers signed up and creating demand for rides. Where does free salon software fit in? Let’s use an example. We’ll create a fake company called decide they want to build and launch a marketplace for salons. But we already know, they can’t launch to potential hair and beauty customers straight away – they need a large number of salons ready to offer their services. The way decide to do it is to create a simple, free salon software product for salons to run their business. It won’t have the bells and whistles, but will cover the basics (and hey! it’s free, right?) and we’ll strip back a lot of the support. You install it yourself, train yourself and we’ll limit the customer support too. The beauty is we can onboard thousands of salons really and without any of the annoying human interaction too! I’ve heard over a beer the figure of 100,000 salons being the target number for one free provider. That would make it one of the biggest in the world. So what then? Now we’ve built the software and spent millions on digital marketing, how are we going to make any money?! Time to sweat the asset This is where the marketplace comes in. What we’ve built isn’t a marketplace to sell SMS credits. We have thousands of active salons on our imaginary platform. And even better, we know when they’re busy. We know what they charge. And we know we’re halfway to a successful marketplace. After that we can creating a listing site that links directly with the salon’s appointment book. Genius! Next all we have to do is launch to the public. You can forget your 1c or 2p profit on every SMS – we can take a percentage of every service we sell. The more salons on the platform, the more appointments are available, and we know what increased competition does to salons. They slash their prices! That means our marketplace is really attractive to bargain-hunters too. Why is that a problem? Clients are a good thing, right? Of course! And there are some salons who will relish the idea of a new dimension to their marketing. I have no problem with that. Where I have a problem is that this isn’t what you signed up for. There are already marketplaces out there like Groupon and Treatwell, and for a number of reasons many salons have chosen not to use them. I’ve used both in the past. And I believe they can have their place. But in my experience the customers who came through the door were loyal customers – but not to me. Because their loyalty was firmly with Groupon and Treatwell. The thing is I don’t really care who delivers my take-away provided it’s hot, on time and fairly priced. But I do care about who cuts my hair or gives me a facial. And in my salon I want customers who care about that too. We all know that retention and repeat custom is critical for salon success. But many marketplaces charge the biggest fee for the first appointment. So my imaginary has an incentive to move clients around – and get that “first appointment” commission as many times as possible. Not great for the salon owner. Whose team are you on? Above all, who is here to serve? You – the salon owner who pays them nothing? Or the customers the marketplace sends you, that gives a delicious slice of every cut, every colour, every massage and every brow shape? Who is the priority for the future? Specifically, will be releasing new features for your free salon software? Investing and helping you with more effective marketing and customer retention? Of course not! Why would I want you to use SMS, email, social media and more? Basically, it doesn’t pay for me to help you get and keep customers without my involvement! Every software has a price Don’t be fooled. Do your research, of course. Make sure you understand exactly what your software is costing you. It’s not my job to tell you to spend more – there is room in our industry for more basic budget software through to the premium brands we all know and love. But it is my job to help you understand the choices you are making. Furthermore don’t kid yourself that you can hedge your bets by changing software frequently either. There’s a huge cost involved there too. Because even the best software companies can only bring certain details from your old system. That means a huge slice of rich, important past data is lost with every move. How valuable is that? “My fear is – if you’re not being charged for your software product, you have become the product” In short, if your provider isn’t charging you ask yourself: just how do they make their money? And how much of your business are they controlling to make sure they do? For instance, do they have your data? Your website? And your marketing too? Finally, as always, I’d love your opinions on this. We’re using Phorest – what about you? What are you using and what do you love about it? Why not add to the comments or join the conversation over on the Build Your Salon Facebook page here. Speak soon! Phil