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Getting consumers to spend during tough times

Adam Zuchetti
Adam Zuchetti
12 July 2017 2 minute readShare
Man with a wallet full of money hanging from his pocket

As one high-end business owner reveals, customers will still spend money during tough financial times – you simply need to work smarter to get them spending it with you.

Speaking about the potentially devastating effects the global financial crisis (GFC) could have had on their business, Amajjika Kumara and Jules Peacocke of Lily Jackson Hair and Makeup explain that it is having a better understanding of their ideal customer that enabled them to continue generating income during that crippling period.

“Once we recognised that people were tightening their belts, and hairdressing is a discretionary service, it’s not that they won’t spend the money; it’s how do we get them to spend the money,” says Amajjika on the My Business Podcast.

“Research shows is that in recession times, women still spend on designer chocolates and lipsticks [and] they are really willing to spend more on chocolate as well. That told me … we’re not out of the game. What do we do? What do we want our customer to do? We want them to come back and we want them to come back regularly.”

In a bid to achieve this, the company employed two strategies to attract new business and keep clients coming back again.

Rather than discount their prices heavily, which would erode their margins, they established a loyalty club that offered fixed-price add-ons on the condition of forward bookings.

“What we did was we actually mapped up the prices. We understood that we would be ahead if we had, I think, it was a 10 per cent conversion, right? That meant that 10 per cent of people who attended our salon actually signed up for a cut and colour club that we created,” says Amajjika.

“That cut and colour club was strictly limited. It was fixed-price hairdressing with fixed-price add-ons depending what they wanted done. The only requirement was that they had a forward booking within 12 weeks.”

To maintain both the exclusivity of this loyalty club, as well as ensure they achieved their desired conversion rate, anyone who didn’t rebook within 12 months not only lost the fixed-price offer, but was not allowed back into the club.

“It was truly an exclusive club. That kept us through for our first six months afterwards,” she says.

The second step, explains Amajjika, was to “win the war online”.

“We looked at our statistics: word-of-mouth was down, traditional techniques didn’t work. We did some newspaper advertising, we even did Shop A Docket advertising – that’s not one of my proudest moments. Jules had done letterbox drops,” she explains.

“The thing was that our new people would travel for great hairdressing experiences because they’ve had so many bad ones in the past.

“So then we set ourselves a strategy of redeveloping our website regularly and investing in internet marketing technologies or strategies. The cornerstone of our work is search engine optimisation, AdWords and content marketing.”

Hear more insights from Amajjika and Jules on their tried and tested marketing efforts, where they see the highest conversion rates and what to do with bad online reviews on the My Business Podcast below:

Getting consumers to spend during tough times
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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