In the July 2002 issue of Tanning Trends magazine, writer Karen Austin spoke with ULTRATAN owner, Jim Mastronardi, about competition. His take? To find the best ground, you’be got to take the high road.
When people talk about industry competition, they invariable describe it using words that bring battle to mind. In the indoor tanning industry it’s common to hear phrases such as “beat the competition”, “bash the other guy”, “fight uneducated salons”, “avoid a price war”. In fact, it’s safe to say that such fighting words are a part of the industry’s culture.
Well, the industry’s changing. Salons that are on top of success hill have found the metaphorical high ground so coveted in battle. And they got there by taking the high road.
What does that mean? Salon owner Jim Mastronardi describe his competitive started this way: “Honestly, I personally never worried about what other people are doing. I just tried to make us the best we could be.”
Bigger, Better, Faster, Smarter
Mastronardi, owner of Ultra Tan in South Carolina, started with one five-unit salon in 1990. he now owns 25 salons, has four under construction and employs nearly 300 people. Competition strategies like his are gaining popularity, even in the tanning industry, which is traditionally reactive in competitive situations.
Because – again – the industry is changing. Franchises are increasing. Mega-salons are gaining market share. Education and professionalism are mandatory. The sort of sleepy cottage industry atmosphere that dictated the first 20 years of indoor tanning is disappearing for an atmosphere that requires bigger, better, faster, smarter.
That atmosphere wants action different than beat, bash, fight, and war. It wants new energy, and salon owners who understand the new competition are finding ways to create that energy.
The New Competition
As the industry becomes more popular, it will see more and more competitiors. Remember that old cliche’, “If you can’t beat ’em, join ’em”? It’s a workable competitive strategy.
“The best players look at competitors as potential allies, ” says management expert Oren Harari, author or co-author of six books, including, “The Leadership secrets of Colin Powell”, “Beep! Beep! Competing In the Age Of The Road Runner”, “Leapfrogging the Competition” and “Jumping the Curve”. “You might take, for example, two companies that are really strong competitors, let’s say IBM and Sun Microsystems. The fact that they are competitors doesn’t prevent them from working together on selected projects, say like the development and application of the JAVA language.”
Such a project, developed together by competitors, thus benefits the entire industry.
Harari continues. “The best players understand that nowadays the world is much too complicated to simply say, ‘Look, there’s us and there’s our competitors’, because a lot of times, it’s very hard to determine who’s the competitor and who isn’t.”
As the business world becomes more interdependent, so does the industry. When the industry – together as a whole – is fighting unreasonable regulation that might affect your salon profits, who is the competitor? When salon in a geographic area get together to promote public education, who is the competitor?
Clearly, the lines are blurring and competitive strategies are changing. Salon owners like Mastronardi don’t bash, beat and war with competing salons. Instead, the head for higher ground.
We’ve all heard a bashing story. You know, a customer comes in and tells you the salon down the street is telling people your lamps haven’t been changed since 1995 and you’re ripping people off because they can’t possible get a tan at your salon.
But professional salon owners, like Mastronardi, don’t fight back. “If you don’t bash other people,” says Mastronardi, “and you remain professional, I think semi-intelligent people will figure it our for themselves. I believe the best thing to do is take the professional approach and not talk badly about any of your competitors.”
That can be heard to do, says salon owner Diane Edberg, owner of Endless Summer Tanning in Santa Maria, Calif., who took the competition high road this past season when faced with serious competition for the first time in her eight years in the industry. But it wasn’t easy. Edberg’s new competition came from a former employee who was still working for Edberg while planning to open a competing salon down the street. The salon opened in March, right at the beginning of the season.
“I started a special incentive to all one-year memberships, ” Edberg said, explaining her reaction to the news. “The next four months, while construction took place down the street, I had record numbers sign up for the year.” Edberg said she’s had to bite her tongue a few times since the competitor opened. “I don’t bash but I do try to think of ways to bring the business my way. It’s hard, too, because you emotions want to take over. When people ask me questions, I don’t say anything negative. We only tout the qualities that set us apart from the rest. Bashing other salons only hurts our industry as a whole.”
And bashing another salon can hurt you by driving you customer to the competitor, says Scott Bushey, owner of Sun Center in Albuquerque, NM.
“Ultimately, what happens is that people don’t respect that, and it’s real obvious. People think, ‘OK. Why am I hearing all this about Sun Center? Maybe I should go look at them.’ They want to see what all the stuff is about. Why are they saying that?” Bushey said.
And responding to negative comments from customers (sort of reverse-bashing) can hurt you, too. When Mastronardi hears something negative from a customer about another salon, he takes the high road by turning that negative into a positive – for him. “I just link of acknowledge that and say ‘OK. Let me show you what we have.’ Sell them on what you have. Don’t even discuss what other salons don’t have, but tell them what you do have and they’ll figure our for themselves who’s better.:
Educate the Mis-educated
Many salon owners try to top the competitors with education, and that’s a good thing. But remember: Well-educated, knowledge-based salons are becoming the industry standard. You can’t fight mis-education with our re-educating the customer.
“Competition is a good thing for everyone. It’s a good thing for the consumer and it’s a good thing for the operator because it keeps the operator on his toes; it forces him into a place where he has to be conscious of his business and stay up with the times.” – Scott Bushey, owner , Sun Center, Albuquerque, NM.
“It helps you,” Mastronardi says. “If you’re educated and another salon is not, it helps you to be as educated as possible. It’s only going to give you the edge on you competition. In my opinion, people would rather come to an educated salon that gives great customer service than a salon that isn’t educated. They’ll walk away from the best tanning beds in the world if they don’t have good customer service or education in that salon.”
Salon owner Billie Dorgan of Billie’s Body Boutique in Burns Flat, Okla., agrees. “They depend on the salon professional to recommend lotions and tanning exposure times based on skin type. My clients trust that we can hep them achieve results in minimal time and without burning.
Using education to differentiate your salon from the competition is smart, say Marie Brescia, owner of Summer Beach Tanning Salon in Dauphin, PA. “You just kind of have to counteract what they [customers] don’t know with what they should know. I like to let them know as much as I can. It makes you look good, too. It makes you look knowledgeable, not like you just threw some beds in a room and hung a sign out and said, ‘Come on in’ and you don’t know anything about it,” she says. “People are worried today. They hear all these scares from the dermatologist and all the stuff about skin cancer and things like that and they want to tan but they’re so worried. I think the more you know, and the more confident you sound, the more comfortable they are about coming back.”
Quality information is a critical part of competing through education, says Mastonardi. He thinks salon owners back up their knowledge with printed material increase their credibility. “I think it’s imperative that they have good literature, because if they’ve been told one think from one salon, it doesn’t mean they’re going to believe it when somebody tells them something opposite,” he explains. “I think Smart Tan brochures and other literature is a really good way to deal with it. If you have some documentation to substantiate these things on file or readily available to give them while you explain things, you can take it out and support what you’re saying to them and of course, they’re going to believe you then. Give them the Smart Tan website, we well… give them access to a place that they can substantiate what you tell them.”
Declare War on Price Wars
Price is often the weapon of choice when salons face competition. However, says experts and salon owners alike, this is a weapon that can lead to a decline in profits. Price cuts as a competition strategy should be replaced with other non-price factor strategies instead. “I can tell you this right off hand, knowing the economics of scale ans size: If you’re a smaller operation, you are not going to beat a larger player on the basis of price, ” says Harari. “And if you play that game, you’re playing right into the hands of the larger competitor.” Harari asserts that when prices are pretty much the same, customers look at you as a commodity. “If you’re a commodity, why should I go with you?” he explains. “I can go to you or I can go to someone else. The best players, whether they’re large corporations or your local hairdresser, are the ones that are price sensitive, but they’re not the lowest price. What they do, however, is create price value.”
Doran, or Billie’s Body Boutique, faced this very dilemma recently when competition opened close by. “I did lower my prices a little dies to my customers swarming over to the competitions’s new salon. But, I didn’t lower them that much, nor did I meet my competitor’s price,” Dorgan said. “Even though I was a few dollars higher, I kept the clients who knew the value of what I had to offer vs. so and so. After a couple of months, when the ‘new’ wore off the competition, my clients began coming back to me. My prices are still a little higher than the competitor’s but that doesn’t seem to matter to them any more.”
Other salon owners say they won’t even consider getting engaged in a price war, including Mastronardi, who only raised prices twice since 1990. “We did originally check prices and try to be somewhat competitive with other salons, but if you get into a price war and you start dropping your price too low, you actually lose the value of what you’re selling,” he said. “You’re going to get people price-shopping; you’re going to see people that go elsewhere for cheaper tanning, but you have to sell them on the value of what you’re offering.” For example, if Mastronardi hears from a customer that a salon down the street offers tanning for less, he puts a value on the quality of this equipment and more importantly, customers’ time. “If we heard that they can get it for $10 cheaper there we’d tell then, ‘Of course you probably can. Everything has a value. I don’t know what you’re getting there, but if you can get here in two days what it takes there in three or four days, then your time has to be work that extra dollar you’re paying. I don’t like to dog other salons. I don’t know what they offer, but I’m sure if can find tanning cheaper if you shop around.’ Everything has a value to it so that’s how we present it.”
Bushey, of Sun Center, if direct about his opposition to price wars. “I don’t engage in them. Why engage in a price war when it’s better to engage in a service war? To me that’s a much more effective long-term approach to my business. That’s [price wars] not a philosophy I buy into. I’be seen it have too much of a negative effect on our industry.”
Colleagues as Competitors
Friendly competition is a rather alien concept for an industry that, for the most part, refuses to even speak with competitors. Instead, say some, treating your competitors as colleagues is good for business. Bushey would like to open dialogue with other salon owners in his area, but so far, his efforts have been met with resistance. Whey would he even want to establish relationships in his own market? Simple, he says. “My main purpose for reaching out is to establish a relationship so that there would be dialogue within our own market that would be friendship-based and not antagonistic, ” he said.
And what’s his goal for that? “I think that it’s better to have a friendly relationship than one that’s antagonistic, and I say that because we dona’t have to have a dialogue about how much business you’re doing compared to how much business I’m going, ” he explains. “It simply needs to be, ‘Hey, we’re in this thing together; we can support each other; we can give a consistent message that is beneficial for our entire industry.’ That would be the main purpose in my mind. We all share a similar kind of message about tanning as a whole, rather than just, ‘ Well, mine’s better tan yours.’ So, I just think it’s a more professional approach to a common think we have.”
Bushey once had such a relationship with another salon owner in this market who since left the industry. “We could sit down and talk about the concepts of tanning and it was a great thing, and we would sometimes exchange customer, but in a friendly way. It would happen because somebody would move closer to him and vice versa. I was happy about it. I would rather it go to him than somebody else.” Instead of building bridges, Bushey says, many salon owners would rather burn them.” And it’s unfortunate.
Diane Edberg reaped good fortune from new competition that she initially thought would hurt her. “Competition created motivation, which can actually improve your bottom line, ” she said. “It really does. It kicks you in the butt and gets you moving. It really helps out. My business had done quite well this year.”
And healthy competition, along with healthy competitive practice, is good for the industry, as well. Bushey explains, “Competition is a good thing for everyone. It’s a good thing for the operator because it keeps the operator on this toes and forces him into a place where he has to be conscious of his business and stay up with the times.”
In fact, says Harari, the best competitors surpass the other guy. “The world is not black and white anymore. You start seeing new sources of revenue and new collaborative efforts and so on. Sure you’d like to beat your competitors, in fact, one of my books was called “Leapfrogging the Competition,’ because it’s about more than beating them. What you really want to do is go well beyond them,” he said posing a final question that salon owners might consider asking themselves: “How do you create new, unique value for your customers what will allow you to build customer loyalty and profit margin a the same time? TT