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Management Lessons Of A Barber Shop

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A barber shop would seem an unlikely place to collect business wisdom.  Yet I have a story to tell of a little barber shop with lessons for any “commodity” business that wonders how they can differentiate and succeed.

My story begins 15 years ago when I first moved to San Jose and found a barber shop in my neighborhood with a good basic haircut at a reasonable price.  I became a regular, typically going on weekdays to avoid the wait.  I soon noticed that things started to change after the 2008 recession.  Traffic dropped to the point where a Saturday morning visit required no wait and then to the point where I wondered if men no longer needed haircuts!  The shop eventually closed.

In the months that followed, I tried different local hairdresser salons which catered to a mixed male and female clientele and offered both low prices as well as services not typically found at barber shops – like shampooing and blow drying.

One day while driving by my old barber shop, I noticed an “Open” sign.  Intrigued, I walked in to find the shop had been taken over by a new barber named Tony.  At first, when I started going to the shop, there was little traffic, but soon I noticed Tony’s shop was busy all the time, including on weekdays.  Initially Tony worked alone, using one chair.  Over time, Tony expanded to include four chairs and three employees. Even with the additional capacity, Tony’s shop was always full.  Tony charged $17 for his haircuts, quite a bit more than the $12 the former owner charged, and much higher than the $7 I could find in the hairdresser salons.  All of which just had to have me stop and ask:

“How is it that a barber shop in the same exact location and circumstances, offering the same commodity service (with the same quality), but with pricing so much more than either the previous owners or the local competition was doing such great business?” 

My first thought was Tony must have invested a lot in advertising and marketing, or maybe even daily deal promotions.  That turned out to be absolutely not the case.  As Tony himself explained to me, he did not spend a dime on advertising, marketing or promotions.  He didn’t need to, he said.

What he did do was the following:

1. Humanize your business

The first time I had a haircut with Tony, he told me his life story.  He told me how he came to the U.S. as a refugee escaping the killing fields of Cambodia and how he had only survived – even as his friends did not – because of his skill cutting the hair of the Khmer Rouge officers.  One day, he said, he made his escape and eventually came to America.   He told me of his struggles when he first arrived, but how he scraped together the money to start a barber shop and now how he was successful enough to finally expand to new locations.  This shop was the culmination of his dreams, he said, for now he owned more than one shop.

By the end of Tony’s story, I felt a kinship with him.  It made me interested in being part of Tony’s success, and coming back to his store.

This is a lesson for all businesses.  Too often, the conduct of business between a provider and a customer is an impersonal transaction.  But what if businesses took the time to tell their stories and to humanize the relationship?  Now it may be impractical to tell a story to each customer (Tony was lucky in that he had a captive audience!), but a simple way may be to write it up and post it on the premises.  This way customers can peruse the story, get to know, and maybe develop a kinship with the owner.  This approach builds customer loyalty without being contrived – as all of those automated “birthday wishes” cards I get from my dentist and optometrist seem to be.

2. Take advantage of customer engagement time

Here’s the real secret of Tony’s success:  He transformed his barber shop into a “man cave.”  On the walls he placed posters of football and basketball stars, he installed a large screen TV with ESPN playing continuously, and the magazines were all intended for men – Sports Illustrated, Men’s Health, Iron Man, Maxim.  Tony made his barber shop a place where men – his primary client base – felt comfortable as soon as they entered.  This was not a place to get a shampoo or blow dry with your haircut.  This was a place where men could be men and get their beards trimmed with a straight razor.  In effect, Tony provided a differentiated experience – one that appealed emotionally beyond getting a haircut.

So what’s the lesson for other businesses?  Map the full engagement opportunity you have with customers, see what you can appeal to beyond the core offering, and then design your total solution accordingly. Watch this short video to learn how to gain a competitive edge through a differentiated customer experience.

Few businesses build a “solution” that takes advantage of the full engagement opportunity with customers.  Take a busy restaurant, for example.  How often do you find yourself summarily dismissed and told to wait after giving your name for a table? Why do restaurants do this?  They typically don’t consider anything beyond the “primary” product to be important.  Too often I have seen restaurants  that forget about the 30 minutes I spent outside in the cold waiting, but once my turn came then I’d be warmly greeted and shown all the hospitality in the world.   It is as if the “clock” started only when I was shown my table.  What would happen if, instead, a restaurant built their “solution” to start from the time customers walked in the door to include the wait time?  What if they provided entertainment or surroundings that made the wait time go by more quickly and comfortably?  It would build a lot more loyalty than the competition.

3.  Details matter

If you look at what makes Tony’s barber shop so successful, it is the small things.  It is the stories Tony told and it is the posters and the big screen TV that helped convert his barber shop into a “man cave.”  These “small” additions don’t cost a lot relative to the core product (e.g. rent, labor, supplies).  But these “small things” make a big difference in defining the overall customer experience.

If Tony can turn a “commodity” business like a barber shop into a standout success, then surely any business can win, no matter how difficult the competition.

By Rahul Asthana, Director, Solution Marketing, SAP

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