Is there a reason you don’t offer EFT memberships? I’ve heard them all, and none of them are convincing enough for you to not offer them. As tanning salon business consultant, it still amazes me to hear that some salon owners are running salons without an EFT plan. With the amount of money they’re leaving on the table, I almost can’t comprehend how their functioning in business. Even some of the smaller tanning salon I coach have done extremely well with EFTs. One client generates $18,000 to $24,000 a month in EFT revenue during peak season, and $12,000-$17,000 in revenue during the off-peak months. What would you do with this extra revenue?
The Tanning Industry Standard
EFTs are the industry standard. That’s right, the industry standard. It’s the norm in several industries similar to ours. Not offering an EFT is like not offering tanning lotions and products. It’s one of the most profitable revenue streams you can have. Despite this, many salon owners refuse to incorporate this business model. Here is a list of the top 10 reasons salon owners have given me for not having an EFT program:
1. My clients don’t like EFT plans – I hear this quite often. Usually, an owner is located near another salon that does offer EFT. So, their thought process is that by NOT offering an EFT plan, they are more attractive to clients. This is not only untrue, it’s a disservice to your business and bottom line. Sure, there are clients that just don’t want to use an EFT plan, but you’re making a choice for the masses before you’ve even offered them a choice. If your EFT plan is attractive in price and value, doesn’t require tanners to jump through hoops to make changes, and offers savings over the usual single tans, weeks, or months you may have available, why wouldn’t they choose an EFT?
2. EFT plans are confusing and hard to price – This one perplexes me. Were you able to establish a price for your services? Then it’s just as easy to establish a price for an EFT plan of the same value. Just keep it simple. For example, if my month of basic level tanning is $34.99, we reduce the cost by $15 to establish an EFT price of $19.99. We offer $15 a month in savings for any EFT program versus the month pricing. Then, as we add more services to the EFT level they choose, we price it up accordingly. Single tans are the most expensive, weekly rates are next, then a month is more savings, and then our EFT program is the best price and value. Keep it simple, but know the value of your services.
3. EFT programs are hard to manage – In the days when a box of cards were your client’s history and package tracking, I would tend to agree with you. But there are numerous salon software programs out there and any of them feature an EFT management program in the software. We’re way past the days of sitting at a credit card terminal and manually entering every client’s EFT billing by hand each month. (There are some who still do it.) EFT management has to be effective and done timely. Software companies that specifically address the tanning industry have these programs built in. Would you spend $80-$90 a month to effectively manage a $5,000 or more EFT monthly draft? You should!
4. We offer EFT programs, but our clients don’t use it – If you aren’t closing 40 percent or more of your clients on your EFT program, then you need to step back and figure out why. Do you have a sign-up fee? Are you forcing clients to sign up for a specific timeline, such as six months? Do you charge termination fees? The more reasons you give a client to say NO to opting into your EFT program, the less likely you are going to be successful with it. Your EFT program should have the best rewards for becoming a member. That means pricing, value, and flexibility. I encourage you to stop trying to penalize your clients for becoming a member and give them the freedom and savings they deserve for handing you their EFT information. Make it easy and flexible by offering freeze options, no sign-up fees, and month-to-month control over their billing, and you’ll have a much higher closing rate.
5. Clients who don’t pay their EFT bills are taking advantage of me/costing me money – Yes, there are times when clients payments don’t go through. This happens in every industry. There are times customers don’t pay their electric or phone bills. Does that mean the electric company or phone company stops offering customers the services because they have some who don’t pay the bill? The answer is no. In any EFT management software, it should alert you that the client hasn’t paid. Don’t allow these clients to use the service until they’ve paid their bill. Make sure you have a collection process in your salon and you’ll be able to collect a minimum of 95 percent of your expected EFT each month.
6. I don’t want to pay the fees associated with EFT processing – Unless you’re running your business as a cash-only model, which is all but impossible these days, there are fees associated with processing most payment types. It’s the cost of doing business. But again, do the math. If you had a $7,500 monthly EFT program that cost you $200 to collect, isn’t that money well spent? Shop around for the best rates for your credit card processor and EFT processing.
7. My staff doesn’t like selling EFT plans – This is purely a training and benefit problem. What do you offer your staff to promote your EFT programs? How much training time do you spend teaching your staff the way to sell your EFT programs? Your commission structure is based on EFT, first and foremost. We offer commissions on products and some of our services, of course, but the most money they make on any sale is the EFT program. Structure your benefits for your staff around what you want them to accomplish. Also, spend some time training your staff. There is nothing more important to any EFT program than ensuring that your staff is trained properly.
8. We offer EFT programs, but clients don’t seem to like them compared to the other services we offer – This is where you need to evaluate your EFT programs. Business shouldn’t be about offering a cookie cutter system that forces clients into a single mold. The idea is to be able to customize your EFT to fit the needs of your clients. Some salons offer 14 different EFT plans. This might seem like a lot, but there is something available for everyone, and you can find an EFT program that fits their needs. This requires training your staff, pricing your services appropriately, and making sure you ask lots of questions during your tours and closings. I’m not saying you need to offer as many as 14 programs, but don’t expect your client to fit in a mold of three or four EFT programs without offering them options to customize it for their needs.
9. Other salons around me offer EFT programs and I don’t like their pricing – Who said you need to match their pricing? Just because the salon down the road offers $9.99 tanning doesn’t mean you need to. Price isn’t always the most important aspect of the EFT program. Customers are more concerned with value versus just price. What makes your salon different? What equipment do you have? How well do you maintain your tanning lamps and your equipment? Build value with your EFT program and the clients will appreciate your prices, even if they aren’t the least expensive. Being the cheapest isn’t what will make your EFT program successful; being the best value will.
10. I make more money by selling single sessions or months than using an EFT program because the client pays more – I hear this one a lot. For example, you can charge $24 for a single tan in that level bed, or charge $35 for that spray tan. Why would you choose to do an EFT program when you’re collecting that over the counter? This is purely about doing the math and the law of averages. How many of your clients will use your services consistently each month at that single tan price? The answer is not nearly as many as you will have on a monthly EFT program that pays you even when they don’t tan. If you have 50 clients who pay $24 for a single tan, that’s $1,200 in revenue. Now imagine having 300 clients with an average of $25 per person on an EFT program. That’s $7,500 in revenue, and some of them didn’t visit your salon that month.
Get Your EFTs In Order!
It’s never too late to put your EFT programs into place, train staff, and establish a compensation program. When you do, you’ll be generating more revenue than ever. It will take time to implement if you’ve never offered it before, but I cannot stress enough how important it is. If your current EFT program isn’t working well, reevaluate it and make adjustments. Remember, you don’t have to make your program like anyone else’s. It’s best to have an EFT that’s effective for your clients’ needs and the value of what your salon offers.