Wednesday, October 12, 2016

Increasing Your Income: Vol. 1—Better Tips

                  The average pay for a barber in America is around $40,000 a year. Of course, location and experience play a huge role in what you will be taking home at the end of the week, but for the sake of establishing a national average, the typical barber in America will make somewhere around $40,000 a year. Some of you may make more, some of you may make less, but here’s the common principle we all have in common—we all want to make more. There are a few ways to make more money within the barbering industry, some of which require an initial investment which you may or may not have at this time, but today I am going to be talking about what you can do to make that wallet fatter starting right now.

                  Barbering is a funny industry. You go to school or take part in an apprenticeship for a given length of time, take the tests, get certified, and offer a service that not just anyone can perform. Its not the same as a career in the restaurant industry, where an individual can train for a week to serve tables and immediately start making $20-$30 in base pay and tips. It takes a skilled artist to visualize the “canvas” in the chair, and an even better artist to make this visualization come to life, however, customers in the barbering industry are renown for their “stingy tipping.” Actually, many customers do not even know that tipping is actually expected. If someone forgets to tip their waiter, everyone in the restaurant crew knows. If someone doesn’t tip their barber… well, that’s actually pretty common, so perhaps not a word would be spoken. So here’s my first “tip” for increasing your income in the barbering industry—increase your tips.

“But Tyler, I have been cutting hair for 20 years. Customers are going to tip what they are going to tip! I just need to increase my prices.” Well, perhaps. Look at other shops in your area. Are you charging $8 a cut when the shop down the road is charging $20? If they have just as much traffic as you, then perhaps it might be time to raise the cost of your service. If they are not getting much traffic, well, that probably means you have their potential clientele, in which case I would suggest keeping your pricing quite competitive. But lets get down to the numbers…sure, you may be charging $15-$20 for a haircut, which seems to be the average cost of a cut in the US, but this haircut takes you anywhere from 30 minutes to an hour to complete, depending if you offer other services or not. Let’s say that you charge a typical customer $25 for a cut, a wash, and styling—depending on the customer, you will have just grossed $25 for nearly an hour of work. Ok, that sounds decent, right? But what’s YOUR cost for the service? How much is your space rent? Are you charged per month, per customer, or perhaps even both? I recently ran into an area where a small chain of shops charges their barbers a large monthly due, as well as 50% of their base earnings. 

How are you suppose to make money when you are being charged this much, or your operating cost is high? First off, I would really hope that you are not at a shop that potential has the ability to take 75%-80% of your total earnings (yes, these shops DO exist). Second, if you find yourself with decent traffic, competitive pricing, and a great location, but you are still pinching pennies to pay bills, the immediate action I would suggest is changing your game in order to maximize your tip ratio. If you want to maximize your tips, here’s my suggestion…be an A.S.S.—“Attitude,” “Service,” “Settlement.” Let’s start with attitude.

ATTITUDE: If you want to increase your tips, your attitude needs to change. Ok, I get it…you are already a nice person, and you have a great clientele already established. But you want to make more in tips, right? Change your attitude. A lot of barbers are busy with their current cut, or they are preoccupied in a conversation when a customer walks through the door. The first instinct is to continue what you are doing, but I want to challenge this—genuinely and sincerely greet the new customer who just walked through the door. From the customer’s standpoint, there are many barbers who will not greet them when they walk in. Stand out as someone different. The barbers they are accustomed to were not rude, but they did not go the extra mile to ensure the new customer felt welcomed. I know what you are thinking…”I’m already with a client, so why would I give my attention to someone else?” Listen, we are not talking about “scathing by” for the cost of the cut…we are talking about increasing your tips, which means you are going to need to go above and beyond, giving attention to as many people you have waiting for you. People want to feel special—put yourself in their shoes. If you have an hour and a half wait, and a customer walks in KNOWING how long they will be there yet still chooses to stay, and you don’t particularly greet them as an individual? Well, I know I would not feel special. Here’s the thing, they might not be special. They might be a #2 all the way around—just another head in line. They might even smell bad and have a “snow” covered scalp. However, if you make them feel like the freaking King of France when they walk through your door, a good tip might be waiting for you at the end of the process. Change your attitude so that every single customer who walks through that door becomes your favorite customer. Another way of saying it? Acknowledge every head that walks in, and walks out of your shop.

I spend a lot of time on Yelp looking at potential shops to visit, and the number one complaint I see? “I walked in the shop, and I was not acknowledged. Here’s the deal, increasing your tips and retaining customers is directly related. If a customer walks into your shop, and you do not warmly great or acknowledge them, one of two things will happen. (1) The customer will stay, receive your service, and carry on with their day, or (2) the customer will leave. If the first option is what happens, don’t expect to get a fat tip. If the second option happens, you just lost a customer. A few years ago, I went to a new shop I had never been to before for a clean up. The shop I went to had good reviews, and the atmosphere was comfortable. I walked in and sat in an open chair with only a few people in front of me—maybe an hour wait, tops. I waited a good 30 minutes, then a new customer walked right in and sat down in the chair. Come to find out, it was appointment day, and I was not even able to get a cut.

In retrospection, I should have asked what the schedule looked like when I immediately walked in, but the truth in this story is that not every customer is going to come into your shop knowing the routine, and not every customer is going to know what to do. Now, if the barber would have looked up at me and greeted me warmly saying something like, “Hey! Thanks for stopping by today, but I’m actually completely booked with appointments! I take walk-in the rest of the week, or you can set an appointment with me for next week,” I totally would have been back. The atmosphere was great! But what really happened was that I heard another customer say something about an appointment day, so I stood up and started to leave. As I was walking to the door, I asked the barber if he had any open slots for the day, when he said, “Nope.” Nothing else, just “nope.” I left and never went back, and even if I did get a cut that day, I’m not sure I would have actually tipped him well at all. The unfortunate thing? I tip anywhere between 30%-50% for my haircuts. Don’t be the guy who does not acknowledge customers, because not only will your tips suck, but you might lose potential customers. Change your attitude, change your tips.

SERVICE: Moving onto the second principle in being an A.S.S., service, I can’t help but feel like I’m telling you something you already know. If you do good work, your tips will be better! Dur. If you do a sucky job and cut a brother up, he MIGHT pay you for your service, but he surely is not going to tip you! Now, there’s a life lesson to learn here that some of us went years without knowing—mistakes are a part of life. No one is perfect, so don’t try to be perfect. No matter how much experience you have, or how gifted you or a friend may be at fading or shaving, every single person makes mistakes. Do not hold yourself to such a high standard that you get discouraged when you make a mistake, but here’s the deal…limit your mistakes to a minimum. Provide a thorough service where you pay attention to detail, are not rushed, and where YOU feel comfortable, and I promise that you will see your tips increase through the bloody roof. Ok, you see where paying attention to detail and not being rushed come into play, but let me explain how your comfort plays a key role—you see, when you feel stressed, those around you will feel stressed. When you feel comfortable, those around you will feel comfortable. I don’t know what you would feel uncomfortable about, but it happens. If you are picking up that “comfort” seems related to attitude, then good job. Your attitude does affect your service, even if ever so slightly, so make sure that you feel comfortable, as your client will likely feel comfortable as well.

Now, there is a huge difference between feeling comfortable and being unprofessional. Of course, this looks different for every shop depending on area and location, but if your “comfort” is contrary to the professionalism of the shop, then it’s time to find a new way to get comfortable. People are more likely to pay a premium price for a professional service, so if you want to get better tips, be more professional! You have kids frequent the shop? Better to watch your mouth. Mama will give you a handsome tip for cleaning her son up and for being a good example. Do you have business men frequent your shop? Try wearing slack and a button up shirt. You probably don’t need to go all out with a tie and oxford shoes, but it might be a good idea to “dress up” a little more to maintain a more professional environment—but on the other side of the coin, “dressing down” is also considered a form of professionalism. If you live in rural Virginia, slacks and a tie might take away from the professionalism of your shop. Know your community, know your customers, and develop a professional environment where you feel comfortable, therefore allowing the customer to feel comfortable. (Here’s a secret! When people feel comfortable, they are generally willing to pay more for a product or service!)

SETTLEMENT: Finally, the last principle in being an “A.S.S.”—settlement. Ok, I totally could have just used the term “payment” to explain this principle just as well, but then I wouldn’t have been able to use this awesome acronym. Regardless, payment options can be your good friend when deciding how you can increase your tips. Some shops choose to simply work as a “cash only” establishment, while others don’t mind using all methods of payment, i.e., cash, cards, checks, Pokémon cards, etc…now, if you operate strictly as a cash only establishment, know that you are limiting yourself to the potential of gaining more tips. In decades past, this was not an issue at all—card fees were expensive, and people always carried cash (in big and small bills) with them. However, most people carry very little cash with them at any given time, with the younger generations sticking almost exclusively to cards. I don’t want to overwhelm you with payment options right now, but I will say that methods like “Apple Pay” are getting more popular, and may soon emerge as a primary payment method in the market. Food for thought. Now, since the “cashless” generation is emerging into the market as the primary consumer, its should be noted that when an establishment maintains a cash only operation, the individual will have to specifically pull out the amount of your service. If you offer $15 cuts, the customer might only bring $15. Remember, tipping the barber is not the most thought of field for tipping services.

If you are a cash only shop, I understand. Credit card machines have been expensive, the services can be expensive to maintain, and it certainly takes away from the whole “classic barbershop” experience. However, there are currently options for taking electronic payment methods which are inexpensive and fast. I would highly suggest looking into Square readers and likewise companies which are able to offer inexpensive and fast services. I know what you are thinking though, “but it’s still a percentage off the top of what I will charge the customer!” Well, here’s the kicker—you can charge your customers the card fees if necessary. If you have a 3% card charge, let the customer know beforehand that using any card will result in a 3% charge! It’s that simple. But here’s the real benefit of using a card payment system like Square—you can generate a tip amount! When your customer swipes their card, they generally have to sign the digital receipt, which YOU are able to customize for tipping! Yes, you will have to claim this tip as it shows up in your bank account, however similar programs allow you to customize automatic tipping scales. If you offer a $20 cut, the customer will have the option to tip you on the card reader (which is programmed via an app through a mobile device). You give them the device, and they have the opportunity to click on a percentage which you customize: (1) 30% Tip, (2) 20% Tip, (3) 15% Tip, (4) Customize Tip (where they can put 0% if they choose). Usually, you are standing right in front of them waiting for the device, so I really don’t want to encourage this…but it’s totally a form of guilt tripping. Hey, I’m not saying that you should be looking directly at their hands, or make eye contact, but if you do, you might be surprised how many people click the “30%” option. You might be hard pressed to find someone who will deliberately go out of their way to click “Customize Tip” and give you 0%. If you do not have various forms of settling up with your customers, you could miss out on some really decent tips, so explore different options to see what will work best for you! Maybe you live in an area where cash flows freely? Or maybe you live in an area where physical cash is dead? Either way, open your shop’s payment methods up, and I’m certain you will see your tips increase.

Lets take a look back at the numbers—the average barber makes $40,000 a year. Now, imagine if every customer gave at least a 10% tip. That’s $4,000 extra a year. Now, by being an A.S.S. to the best of your ability, you could easily get your tips around the 20% range. Imagine being able to claim an extra $10,000+ a year by utilizing these simple principles! Change your attitude and acknowledge customers, offer thorough service where you pay attention to detail and remain unrushed, and offer various forms of settlement in terms of payment methods designed to get you the most of your tips. But, here’s the one thing that I have not yet mentioned. Every once in a while, you will come across the individual who is simply a bad tipper. You all know someone like this. It doesn’t matter the kind of service you give—you can give them the best experience of their life, yet they will tip you the same (if at all) as the person who gave them the worst experience. Don’t be discouraged by this, and make sure that you are not this person. 

There are people who are bad tippers, and there is nothing you can do about it. Appreciate their business, keep acknowledging customers with a friendly smile and a warm greeting, and keep offering the best service that you possibly can. Challenge yourself daily, and take record of your tips—at the end of this week, write down what your tips were. Then, at the start of next week, utilize these principles to the best of your ability and watch as your tips begin to soar through the roof. And one final encouragement, practice. You may not see a huge return immediately, and if you don’t, do not give up hope in A.S.S., just keep pursuing and watch as your tips begin to make a difference.


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