competitor next door

elegantnails34

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I have a small hair and beauty salon doing nails and spray tans in a small town and a new salon has just opened right next door to me doing the same thing and under cutting my prices by 50%, is this legal? we are so close to each other. what shall I do? should I reduce my prices to theirs? even though I will not be making any money? I am worried that I will loose my clients to these new comers due to pricing.
 
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RBS

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I have a small hair and beauty salon doing nails and spray tans in a small town and a new salon has just opened right next door to me doing the same thing and under cutting my prices by 50%, is this legal? we are so close to each other. what shall I do? should I reduce my prices to theirs? even though I will not be making any money? I am worried that I will loose my clients to these new comers due to pricing.

I dont think there is a law against competition. Be better than them, so customer come to you, its not always about price.
 
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oldeagleeye

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I echo what Rob has said. there is no law against competition. In fact quite the opposite but that is usually where big business is concerned.

As regards of price. If you charge a fair price I wouldn't drop one penny because your business in particular is more about personality than anything else and if you have that you will always have your own following and therein lies the ace up your sleeve.

Keep it personal. A free little personal present now and then perhaps. Something that may only costs pennies like a cardboard nail file just before they go on holiday because steel ones are not allowed on planes shows just how thoughful you are. What about a small nail varnish. Again to top on when on holiday.

Above all elegant lady. Keep a smile on your face especially when you see your competitor looking at you and should they pop in with some sarcastic remark about your salon being empty - give them an even bigger smile and say that they are the ones that have got it wrong.

By discounting they are working twice as hard as you for less money he - he. They will soon see sense but too late. When their prices go up their customers will feel cheated.

And finally. Make sure both the exterior and interior of your salon lives up to your name. Plenty of flowers and the silk ones are great. Real china cups and the best mags. Elegant ladies don't want cheap as chips . They would sooner be seen in a trendy up-market salon and are prepared to pay for it.
Good luck

Robert.
 
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I have seen this before and the outcome was the more expensive shop lost the trade, money is important to people, for every 1 person who likes quality and to pay that bit more there are 4 who will prefer to pay less,

Your only hope is them to not be able to price so low for a long time,
 
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oldeagleeye

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As you can see by my post Massey I disagree with you and your post suggests that you don't know a great deal about women. Girls maybe but not women and I don't mean that in a condecending way because you wouldn't know until you have been there and bought the tee shirt like seeing over £200 quid on the credit card and being told. Oh that is only for the hair extention and my nails. Another £350 quid for a new dress to go with it. For the majority 'elegant women' then there is no recession.

If you don't believe me. Take a look at the driver of every new mercedes or 4X4 that passes by. 9 times out of 10 it will be driven by a woman and if the nearest & dearest are not dropping kids off to school they are poping into somewhere for a little pampering.

For the vast majority of women then - hair - nails & makeup are not a luxury buy - they are essentials and if they can't afford to pay for them out of the housekeeping you can bet your life hubby gets a warm welcome home from work the night before the next appointment at the hairdressers or beauty salon.

Incidentally Massey - as far as money is concerned. Do you know that Britain built it's first real aiport at Croydon in the early days of the worse recession in history in the 1930's due to the demand for paasenger flights.

Do you know the clubs and top restaurants in London in particular were busier during the blitz on the city during World War 11 than at any other time.

There has always been money around then. It is just a matter of tapping into it and where elegant women who care about their looks it is not by offering cheap as chips when it comes to a spray tan. That is for the pink fluffy slipper brigade.:eek:
 
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elegantnails34

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Rob and Robert, thanks guys for all your positive comments and I know what I will do now, promote, promote, quality, and high level of customer care. All your suggestions are greatly appreciated and will certainly make the salon even more
elegant. The forum has helped me a lot as I was worrying about it but now Iam ready to take whatever is thrown at me with renewed enthusiasim.

thankyou again
 
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As you can see by my post Massey I disagree with you and your post suggests that you don't know a great deal about women. Girls maybe but not women and I don't mean that in a condecending way because you wouldn't know until you have been there and bought the tee shirt like seeing over £200 quid on the credit card and being told. Oh that is only for the hair extention and my nails.

It may be different for things like beauty, but people can only speculate whats going to happen, and having picked the winner of the national im a gambling man, and i would bet the op's trade takes a nose dive compared to next door,.
 
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oldeagleeye

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As said OP. You don't know women none too well. In 3 months time the OP and her competitor will be the best of friend carving the trade up. One may agree to drop nails for example and put in a jaccuzi if the other agress not to do so.

Believe me it works. I once bought a boutique for my ex that was right next door to another and at first I frightened to go anywhere near the place because there were so many daggers flying. Within 6 months they had settle who stocked what ranges and if the gals saw anything on their buying trips that the other might earn from they would buy it for them. In fact they even ran each others boutique during holidays.

Never underestimate our better half's. I am 60 and even I am still learning. Always wondered for instance why I must have been the only teenager that didn't get an earful for not hanging up my clothes in the wardrobe. That is until my mother died recently god bless her for she confessed that the reason she didn't mind hanging up my jeans was because she shook them. Any coins that fell out was saved up for her little treats. Magic.
 
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RBS

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OP,

You could ask your mate to go there and get nails/hairs/whatever done. Ask her to note every single detail like how clean is saloon, what are opening times, what sprays/hair chemicals/etc they use. Then you can analyse how can you make your saloon better in terms of quality and products you use. Then of course note that to your customers like: we don't use cheap XXX brand, just top class Garnier shampoos. You got idea.
But don't just drop the price, woman spend lot of money on their appearance(its in their genes, its instinct). Seeing two saloons being next to each other, but one with higher prices, they might choose you, because you charge more, therefore quality might be better(in their mind). Chicks want best.

If you drop the price, they will drop more. You both will end up bankrupt, its definitely not win-win situation.
 
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elegantnails34

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It may be different for things like beauty, but people can only speculate whats going to happen, and having picked the winner of the national im a gambling man, and i would bet the op's trade takes a nose dive compared to next door,.

I don't actually agree with you that my trade will take a nose dive compared to next door. I have survived in the last two years when they
opened next to me doing hair, they struggled and now they are trying to add nails and spray Tan with a brand thats not very popular unlike our brand which is featured on how to look good naked, glamour magazine, Marie claire etc. The only time I would really worry is if they started doing hair extensions and hairpieces which is where I make the most money. Nails take an hour to do and cost £25 to £30 I concetrated on promoting hair extensions as I can earn £100 an hour. Maybe thats where I went
wrong, I did not promote the nails and spray tans enough but thats all
about to change.
Rosie
 
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Cobby

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I don't actually agree with you that my trade will take a nose dive compared to next door. I have survived in the last two years when they
opened next to me doing hair, they struggled and now they are trying to add nails and spray Tan with a brand thats not very popular unlike our brand which is featured on how to look good naked, glamour magazine, Marie claire etc. The only time I would really worry is if they started doing hair extensions and hairpieces which is where I make the most money. Nails take an hour to do and cost £25 to £30 I concetrated on promoting hair extensions as I can earn £100 an hour. Maybe thats where I went
wrong, I did not promote the nails and spray tans enough but thats all
about to change.
Rosie
A good and up to date assessment of your own business. You seem quite on top of the problem; you should have more confidence in yourself.

As you can see by my post Massey I disagree with you and your post suggests that you don't know a great deal about women. Girls maybe but not women and I don't mean that in a condecending way because you wouldn't know until you have been there and bought the tee shirt like seeing over £200 quid on the credit card and being told. Oh that is only for the hair extention and my nails. Another £350 quid for a new dress to go with it. For the majority 'elegant women' then there is no recession.

If you don't believe me. Take a look at the driver of every new mercedes or 4X4 that passes by. 9 times out of 10 it will be driven by a woman and if the nearest & dearest are not dropping kids off to school they are poping into somewhere for a little pampering.

For the vast majority of women then - hair - nails & makeup are not a luxury buy - they are essentials and if they can't afford to pay for them out of the housekeeping you can bet your life hubby gets a warm welcome home from work the night before the next appointment at the hairdressers or beauty salon.

Incidentally Massey - as far as money is concerned. Do you know that Britain built it's first real aiport at Croydon in the early days of the worse recession in history in the 1930's due to the demand for paasenger flights.

Do you know the clubs and top restaurants in London in particular were busier during the blitz on the city during World War 11 than at any other time.

There has always been money around then. It is just a matter of tapping into it and where elegant women who care about their looks it is not by offering cheap as chips when it comes to a spray tan. That is for the pink fluffy slipper brigade.:eek:
Thanks for this outdated, condescending and quite offensively sexist assessment!
 
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tony84

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I would lower my prices personally.

From a customer point of view, if i had the option of 2 places next door and 1 was cheaper - sorry but i would go to the cheapest.
They probably have spent all their capital on new equipment so if theyre not getting the customers you would imagine they cant keep it going for very long.

That might also put you in the position where (although probably not entirely legal) you can discuss prices, maybe they can be more expensive for some bits than you and vice versa?
 
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oldeagleeye

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A good and up to date assessment of your own business. You seem quite on top of the problem; you should have more confidence in yourself.


Thanks for this outdated, condescending and quite offensively sexist assessment!


OUTDATED you plonker. I got the cost of the hair extensions and nails right almost to the pound note. As for being esxist. Your damned right I am but not in the way you think.

I have always supported womens lib. I even bought my ex the Germain Greer book The Femaile Eunoch when it came out. I bought her loads of Helen Ready albums too and wet look Tee-shirts. Needless to say I was happy as a boy on the beech building sand castles when she threw away her bra.:D

OUTDATED. Come on now. Don't women still complain that they have nothing to wear for a night out when they have half a dozen outfits that they bought in the sales a few months before as a 'must have' bargain and have never worn & boy oh boy do they not like 'expensive'.

I went with my wife on a shopping expedition ( I choose the word expedition carefully ) shortly before our last holiday together and of course the inevitable new nickers and bikini's were on the list. As she headed for the tills however I headed for the door. Even them their panties had security tags on them. My bloody shirts don't.:eek:

God bless em all however is what I say and if that is regarded as being sexist by you Xooby - who cares what you think - and as for us guys paying out for hair extentions and nails. That is so they can look and feel good and not to be wasted on their doing greasy washing up.:eek:

Sorry to go off thread OP and just to reiterate what I said before and put it in a slightly different way. Cost of a cheap can of fake tan. What £5 quid. Cost of a spray tan applied by a junior member of staff lets say £30.

Cost of the same tan but applied by the Boss - £100 quid.

Just as with a senior solicitor in a law firm. A consultant in Harley Street your expertise Rosie commands a premium as does your personality.

And finally. Do I already see that carving up the trade taking place in your mind. It could be for instance that your competitor didn't realise that you were into tanning and nails that much when as you say you were mainly promoting hair extentions. Whatever. The main thing is -don't drop your prices that is all too easy to do. What isn't is putting them up again.

Personality - Quality and being a woman. You just can't beat it is your business unless of course you have a gay man as an assistant and I don't give a hoot if anyone thinks saying that is not pc. It is a fact. Women love gay hairdressers.

Not too sure about the tanning though and swapping moans about the varicoise veins:eek:

Good luck again Rosie. I rather suspect with your confidence you can make your own and do come back in 3 months and let us know how you got on.

Robert.
 
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*Lexxy*

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sorry if this has already been mentioned, what about a loyalty scheme? perhaps a discount after X treatments or a free treatment after 6 full price ones?

do you 'spoil' everyone already? you know, free tea/coffee/pop etc on tap, plenty of magazines to read, a seating area with a table set up with miniature freebies of various products that they can take away with them?

above all, quality of treatment & service provided - i'd stick with you even if a competitor was cheaper.

good luck, keep us posted :)

p.s. to OldEagleEye - "Take a look at the driver of every new mercedes or 4X4 that passes by. 9 times out of 10 it will be driven by a woman and if the nearest & dearest are not dropping kids off to school they are poping into somewhere for a little pampering." i'm on the verge of taking offence at that comment (put that fence back! :D), but you are soooooo wrong..........
 
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oldeagleeye

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Not so Lexxy and I'll go further . Most of the white - cream and silver mercs are driven by 25 - 40 year ol blondes with immaculate hairdo's and nails:eek:

Tony. Your not talking about discounting mobile phones here but having confidence in the owner of the salon and their team to allow them to apply dangerous chemicals to these womens bodies.

Cheap as chips don't inspire confidence. Far from it. It suggest the posibility of coming out the cheap operation with a scabby fake tan and pink hair and still stinking of peroxide. Not exactly on a woman's wish list when she is supposed to be going out for dinner a few hours later.:eek:

Enough said I think.
 
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*Lexxy*

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Not so Lexxy and I'll go further . Most of the white - cream and silver mercs are driven by 25 - 40 year ol blondes with immaculate hairdo's and nails:eek:

i seriously hope that's not how people view me! :(

i'll have you know that i'm a brunette with brains! :p i'll just have to live in hope that i'm the 1 in 10 of your stats...
 
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Oh and sorry got awfully carried away!

What is your relationship like with your neighbour/competition?

If you can develop a friendly relationship and work together this will make for a happier time, I agree that you ought not to drop your prices and as long as the difference is not significant your clients will stay with you as generally when you are happy with a service you remain loyal.

Of course you can provide incentives, loyalty cards are a good idea - most people do offer them now buy five tans get the sixth free sort of deal - choose one colour (hair) and get the second half price, etc.

You sound really competent so I am sure you will be fine and if problems do arise well you have a super resource here, this forum will help.

You could offer different themed nights or, special appointments for say particularly unkempt males - just an example.

Sorry that was petty and childish.
 
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oldeagleeye

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BULLS-SHILT gals. Answer these questions if you drive a mec or 4 X 4.

1) Do you regard your appearance as important.

2) Do you visit the hairdressers and or beauty salon regularly almost regardless of cost.

3) Does the vehicle you drive reflect your attactive persona

Answer no to any of those questions girls and I'll eat my hat and I do take it off to women of independant means. I have a friend called Christine who is one. On the other hand she drives a Fiat Panda so as to be able to buy her own flat in Chelsea and not a 25K merc.

As for Mercedes PLC. They know that their cars appeal to women hence the introduction of the latest sports model whiich no man would be seen dead driving. Get real girls. Womens lib has brought with it a recognition by big business that they are a valuable consumer market in their own right.

Now girlies.Leave the handbag bashing to the men in this forum and stop having a pop at me because you know I am right.
 
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BULLS-SHILT gals. Answer these questions if you drive a mec or 4 X 4.

1) Do you regard your appearance as important.

Of course and so do you, human nature.

2) Do you visit the hairdressers and or beauty salon regularly almost regardless of cost.

No, absolutely regardless of cost.

3) Does the vehicle you drive reflect your attactive persona

No the vehicle I drive gets me from A to B in a safe and comfortable fashion.

Answer no to any of those questions girls and I'll eat my hat.

Chew away......

As for Mercedes PLC. They know that their cars appeal to women hence the introduction of the latest sports model whiich no man would be seen dead driving.

Well let's see shall we.......

Get real girls. Womens lib has brought with it a recognition by big business that they are a valuable consumer market in their own right.

Is this bad?

Now girlies.Leave the handbag bashing to the men in this forum and stop having a pop at me because you know I am right.

Only replied because you might have thought I was scared otherwise!
 
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Lawyer

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Occasionally a shopping centre allows only one of each type of business but I doubt that is the case on this high street so you will just have to compete or watch them go out of business by charging too little.

Be careful not to reach any agreements with them. Breach of the Enterprise Act 2002 can land you in jail (horizontal price fixing) and Competition Act 1998 a fine of 10% of turnover although it sounds like the last thing you plan to do is get in touch with them anyway.
 
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U

UK Solicitors

I heard a "story" once about price cutting that used the example of hairdressers.

Basically it starts with a competitor undercutting the established guy.

"£10 haircuts!" says a big banner outside...

The first salon responds and cut their price...

"£8 haircuts!"

The new salon replies with "£6 haircuts!" and the first salon answers...

"How to Fix £6 Haircuts!" because they realise they can't just keep cutting the price as nobody makes any money that way!

I agree with the comment I've read here (not looked at all of them) - there's nothing to stop a competitor setting up, but you can be so much better than they are and the profit and the loyalty always comes from those willing to pay a bit more for high quality, consistently delivered. :)
 
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internetspaceships

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You know what? Eagleeye was trying to help. He wasn't actually trying to be sexist or put anyone down. Some of what he said is completely correct. Well done for pitching in and trying to do more than a one liner mate.

Massey and Xobby are just being their usual selves, well balanced folks with chips firmly on both shoulders.

To the OP, starting to price cut will also make your existing customers wonder if you were charging too much for your services before... That's worth thinking about before you do it.

As mentioned, maybe there is scope to carve up the market between you and both benefit, although if their opener is 50% pricing below yours, then maybe they haven't got particularly good business brains.

Regards

Jon
 
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You know what? Eagleeye was trying to help. He wasn't actually trying to be sexist or put anyone down. Some of what he said is completely correct. Well done for pitching in and trying to do more than a one liner mate.
Jon
Quite, you are right, I do apologise to the OP - this is posted in the Legal section and I am afraid I rather answered as if it were Time Out - sorry.
 
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elegantnails34

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You know what? Eagleeye was trying to help. He wasn't actually trying to be sexist or put anyone down. Some of what he said is completely correct. Well done for pitching in and trying to do more than a one liner mate.

Massey and Xobby are just being their usual selves, well balanced folks with chips firmly on both shoulders.

To the OP, starting to price cut will also make your existing customers wonder if you were charging too much for your services before... That's worth thinking about before you do it.

As mentioned, maybe there is scope to carve up the market between you and both benefit, although if their opener is 50% pricing below yours, then maybe they haven't got particularly good business brains.

Regards

Jon


I asked myself the same question, how can they make any money with the prices they were quoting taking into consideration the cost involved in providing the service? I have now realised that they have just trained in this industry, hence the lack of business brains!
 
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oldeagleeye

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Love the we fix £6 haircusts Brian. Reminds me of oh so many years ago I did battle with a sewing machine dealer opened up shop about 100 metres from one of my outlets.

He started advertsing cheap machines at £24.99 when there was less than £5 profit on a discounted £50 model. I retaliated with a big sign in the window which said.

" BUY ANY CHEAP MACHINE FROM OUR COMPEITORS AND WE WILL GIVE YOU YOUR FULL MONEY BACK IN PART EXCHANGE FOR OUR LATEST LIGHTWEIGHT MODEL. THAT IS IF YOU CAN CARRY ONE OF THOSE BEASTS THE 100 YARDS TO HERE"

Needless those cheapies were heavy but with that poster in mind I had blokes coming in saying that even they wouldn't risk their back having tried to lift one and happily handed over £99.95 for one of our lightweight models. result.

Trebled turnover and at a nice £45 quid a unit profit and to cap it all. customers took the SM away with them so I didn't have the expense incured and time wasted in delivering.

Sorry to go off thread slightly OP but there is a point here. Be tough but don't play dirty and do watch out for them too because I have seen a lot of dirty tricks played in the hairderessingalon/beauty salon game during my 40 years in business.

One common scam is obvious. Bogus customers booking appointments and then not turning up. Superglue in the locks was another and then at the extreme. I have caught 12 - 14 year old kids running away from a lady friend of mines salon after throwing stink bombs in the place on a previous occasion. Fortunately we were ready this time and the kids quickly spurted out the culprits name who happened to be the owner of a new salon just opened in town. Can't remember what they were charged with because the next week the shop had closed down and they were gone.

And they call ladies the 'gentle' sex.

As your doing Rosie our elegant lady. Stay above it all and set the standards not follow them. Most women don't like second best and they know that if they bought cheap from next door it probably is.

As for you Atila and if I may be so bold with the ladies.You obviusly have never had a womens immaculately painted nails running through your hair or dare I say itdown you back. No way you want smelling of Bisto or car shampoo.

My ex goes even further. Her toyboy not only washes and polishes the merc ( cream) he has to get down on his knees and clean the alloy wheels with a toothbrush. Poor bassard.

Now the weekends truly over. Have a good week folks.

R
 
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Atilla

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As for you Atila and if I may be so bold with the ladies.You obviusly have never had a womens immaculately painted nails running through your hair or dare I say itdown you back. No way you want smelling of Bisto or car shampoo.


R
Putting aside my tongue in cheek comment. I think i can safely say i know exactly what ladies preferences and character traits are.

I'm outnumbered 4-1 at home!!!

And to reinforce your comments and views using hairdressing as an example. Why do they all need their own pair of GJD's???
 
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The Panda

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I don't actually agree with you that my trade will take a nose dive compared to next door. I have survived in the last two years when they
opened next to me doing hair, they struggled and now they are trying to add nails and spray Tan with a brand thats not very popular unlike our brand which is featured on how to look good naked, glamour magazine, Marie claire etc. The only time I would really worry is if they started doing hair extensions and hairpieces which is where I make the most money. Nails take an hour to do and cost £25 to £30 I concetrated on promoting hair extensions as I can earn £100 an hour. Maybe thats where I went
wrong, I did not promote the nails and spray tans enough but thats all
about to change.
Rosie
Ok, so they must have been going for a short time now. How have they impacted on your business so far?
I ask this because I am in some ways in a similar situation. I set up my own business back in August against a backdrop of recession, loads of cheap cowboys doing the same thing and national companies with deeper pockets than me.
I decided to go the other way. Offering quality, but quality comes at a price. My name and my quality snowballed to such an extent that I am now looking at expansion. On the other hand, many of the cowboys and some national ones are still droping their prices to compete and to do this they also have to drop their quality and their standards. Many of them are closing down now whereas I am growing.
 
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elegantnails34

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So far, the new competitor has not affected us but they are launching their half price spray tan tomorrow and have an A4 poster in their window so I am re-launching mine tomorrow too with beautiful A2 posters and sticking to my full price. I will continue offering a first class service in a first class salon :D
 
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I wouldn't say the business next door are poor business people. If they've been there 2 years and are going alright through the recession (albeit over) then its likely they are there to stay. And it's unlikely they've undercut you 50% without some thinking gone into it.

I think it's easy sometimes to see your competitors and hope they will be a flash in the pan. The same happened when my cousin opened a shop and local rivals started whispering to each other "he'll go under in 3 months". They were just threatened by his presence and service and rightly so. What i'm saying is dont delude yourself, instead prepare for the future, improve your business and stay ahead!

If next door are cheap then they are CHEAP and you are quality. Emphasize that! Use clever language if you have to. Even something simple like "Feel luxurious". Says it all! Anything you want that implies that they go next door and they look cheap they go to you and they look elegant. Your name says it but emphasize it. It's better to be pro-active then passive.

They've made a move by under cutting you, now you've got to respond in a positive way without getting into a price war. If your prices are reasonable then stick to them but you've got to be offering a better service that is obviously better. At the same time keep an eye on your customer levels. If your business starts to fall then catch it early and do something that makes a difference.

Good luck.
 
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Cobby

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Massey and Xobby are just being their usual selves, well balanced folks with chips firmly on both shoulders.
While I'm terribly sorry that you're still upset about that other thread and your being unable to make reasoned arguments, making spurious personal attacks isn't really called for.
But still, I must be at fault so I apologise; in future I'll be more tolerant of such misogyny! You're probably right, it's exactly what the forum needs! :rolleyes:
 
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icomplete

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Hi there

I use to run my own beauty salon and I would say that what is important long term is personal and quality service. Go that extra mile in keeping your customers happy and you won't need to worry about your competition. It is always good to get customers to fill in feedback forms so you can monitor the service they get from your team it can be an eye opener. I constantly did in-house training with my staff - role plays etc to make sure everyone gives a professional and attentive service goes a long way - this also helps your team to bond better and buy into the business more - inspire them to be the best - better than the new salon - you want to be the best in your area. Also put your staff forward for competitions so they can excel in their field - you can also plaster their success throughout your salon. People buy from people at the end of the day and with hair and beauty it is all about the relationship and of course the quality service. I wish you all the best as it can be worrying. One thing you MUST do is mystery shop your competitor - if they know you and your team then several annoymous people to go in for you and find out just what they are doing and see if you can learn some new tricks. Never see them as a threat - I love competition as you can always learn and then move your business up the next notch.

Good luck I am sure lots of the advice you may already do but hope it helps you in some way.
 
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