How Salonist Is Building Toward Unicorn Status?

A.I. and Financial Technology (FinTech) are the hot topics today. There is another revolution that is quietly transforming the vertical Software as a Service (SaaS) industry—one that is fueling the billions that are produced annually within the Beauty and Wellness Industries. Salonist has demonstrated an effective growth strategy that is being analyzed to see how quickly they could reach a $1 billion valuation.

Salonist has changed from simply being a scheduling tool to becoming the ultimate operational central nervous system powering American brand hair salons with high volumes. It is also proving that the proper hair salon appointment software isn’t merely convenience, but also the necessary infrastructure engine for hyper-scaling.

Capturing the Mid-Market Shift

The historical divide in the salon software space has been quite pronounced. On one end was the extremely simple mobile application made for the independent booth-renter. On the other end were the large and expensive legacy enterprise platforms with very little flexibility or room to grow, that required a ton of technical onboarding.

Salonist found its sweet spot in-between the two extremes — in particular with massive high-volume multi-site brands as well as mid-tier enterprise salons. The fastest-growing segment of salons, mid-size enterprises, has been migrating away from legacy platforms. This means these salon owners are actively looking for centralized corporate reporting, single customer databases, and multi-location fluidity.

A perfect example of the need for this type of technology would be if a multi-chair salon franchise started expanding across state lines. For example, if they went from Texas into Florida? How would they ever manage all of those disparate schedules together?

Using Salonist’s solution, franchise owners can manage all of their entities in real-time by monitoring productivity metrics, SOPs, and global inventory management from a single unified corporate dashboard. Salonist’s domination of the mid-market segment will be instrumental to generating the recurring revenue spikes necessary for securing Tier 1 venture capital backing.

Converting Software Into a FinTech Engine

The biggest distinction between traditional SaaS providers and the next class of billion-dollar startups can be summed up in the concept of embedded finance. They have an active role in the financial transactions that occur within your customer’s business, instead of simply monetizing via software subscription fees ($49 or $99/month). The result is a naturally occurring ceiling on the potential valuation of any SaaS company.

Salonist is making significant changes to its architecture to capture payment processing revenues as it transitions to become one of the best-performing FinTech platforms available today.

By embedding secure payment processing gateways, the Salonist software will earn a small percentage of every dollar that flows through each salon’s cash register. This includes options for instant payouts and multiple methods of distributing tips to stylists, along with automated deduction of chair rental fees from stylists, 

The Embedded Finance Velocity

Within the U.S., payment processing is the quickest way to achieve hyper-growth. When a hair salon appointment software allows a business to process millions of dollars in transactions for its clients each year, its valuation can grow exponentially based on the same metrics used when assessing a business’s lifetime value (LTV).

Consequently, as a salon grows, so too will the LTV of each of its customers.

The Importance of Using “Logic-Based” Scheduling Technology

All beauty platforms contain a foundational product layer of calendars, or time. However, calendars are typically general in nature and treat one unit of time as, in essence, the same as another. For example, a 30-minute time block can be used for someone who wants a quick trim or for someone who wants a very intricate and complicated balayage.

Salonist’s increasing popularity with high-end salons across the U.S. is mostly attributable to its capability for smart asset mapping and management, and the way it manages a stylist’s time and his/her resources.

The way in which it manages the resources of a stylist is detailed below:

• Stylist Skill Profile – Stylist skill profiles allow salons to book complicated colour corrections with only master colourists. Therefore, stylists who have more advanced skills are usually assigned to more difficult and high-priority clients whereas less-experienced stylists will typically be working with entry-level clients.
• Physical Asset Allocation – Salonist provides the capability to map the location of all specialized equipment and the location of all process chairs and backwash stations, resulting in no two or more stylists ever competing for the same resource.
• Automatic Buffer Time – Salonist automatically calculates the time required for clean-up and sanitation of equipment to ensure the salon continues to operate efficiently on a daily basis.

Solving the Industry’s Hidden Profit Killers 

The biggest obstacle preventing companies from reaching “unicorn” status is the fact that their products or services do not address their customers’ most significant pain point. In the case of the hair and beauty industry, the greatest pain points are no-shows and gaps on the calendar.

One missed appointment at any given time can result in a loss of revenue for the salon. A single empty chair for 1 hour in an American salon could result in a loss of $150. If a hair salon uses paper and pencil to book appointments, the gaps between appointments are a missed opportunity.

Salonist addresses this with a data-driven approach to automating appointment booking using SMS and WhatsApp as well as providing a way for clients to make non-refundable deposits when booking appointments. This way, salons using the Salonist platform experience up to a 70% decline in no-shows.

Additionally, the Salonist marketing automation suite utilizes predictive analytics to notify salon owners when there is a gap in their calendar due to the potential for an unbooked appointment and initiating an SMS marketing campaign offering local clients an upsell on a blow-dry or other service during that gap in order to fill the gap before the appointment.

Transforming Client Retention into a Predictable Science

According to new benchmark reports measuring the beauty and wellness industries, the post-pandemic retail salon has experienced a snail’s pace of new client acquisitions. The only brands experiencing growth are those that have been able to increase how often their clients return to these salons each year.  

The ability to rely on data-driven science to measure and improve retention is built into the Customer Relationship Management (CRM) component of Salonist’s SaaS business model. By leveraging a system of metric-based data and reporting tools, Salonist is transforming the hair salon industry’s traditional method of managing customer service reactively into an automated customer retention method.  

• Color Profiles: Every time a stylist performs a color service on a client, they can document the entire process in their client file. They can do this by adding color formulas, developer volumes and notes on each stage of their client’s hair’s history before, during and after the service on high-resolution images of their client’s hair.  
• Re-engagement Automation: If a stylist’s top client doesn’t re-book their color touch-up appointments within their 6-8 week window (depending on stylist’s protocol), Salonist’s automated system will send a customized reminder to that premium client.

This will encourage them to book; eliminating the likelihood of their client booking with another salon.  

• Membership Subscription Management: Because many consumers are now gravitating toward predictable service experiences, Salonist assists salons in launching customized membership programs (unlimited blowouts for a monthly fee) that generate predictable Monthly Recurring Revenue (MRR) for salon owners.

The Valuation Multiplier: How the Pieces Fit Together

To achieve a unicorn valuation, the transition from just a useful tool to an integral part of the business landscape is essential. Salonist has demonstrated this through its deep understanding of the U.S. salon industry and the complexities associated with running a salon, making the most of automation, speed, and embedded finance to drive profit.

For salon owners, investing in this type of hair salon appointment software is not simply an upgrade but rather the foundation to allow them to scale (as Salonist will). Salonist will ultimately create their path to the billion-dollar mark through this dependence.

Build your salon infrastructure for explosive growth with Salonist. Get started with Salonist now!