Spreading the gospel Featured

6:02am EDT May 30, 2003
John Di Julius, president and owner of John Robert's Hair Studio & Spa, has been recognized for, among other things, leadership (1999 Ernst & Young Entrepreneur Of The Year), philanthropy (1999 Pillar Award for Community Service) and strong business growth (No. 17 on the 2002 Weatherhead 100 list).

So it should come as little surprise that Di Julius, a regular speaker on customer service, has parlayed those achievements into a book focused on his specialty.

"Secret Service" (Amacom, 2003) is Di Julius' first foray into writing. It took him two years to pen and get published, all while running and growing his three-location business.

"I have a passion about customer service," he says. "But I've always been frustrated reading books about it. You typically get the warm and fuzzy about how companies do great stuff, but what they didn't tell me was how they did it and how they got their employees to do it."

In his book, Di Julius goes that extra step. He offers dozens of tips that have helped him build a successful business with nearly 150 employees. Here is one powerful "secret" that can boost your bottom line.

Mine existing customers

Di Julius calls it "drilling for oil in your own backyard." While the average hair salon gets about 750 new customers each year, John Robert's pulls in between 800 and 1,100 new customers each month just at its Mayfield Heights location.

"Everyone wants to know why," Di Julius says. "The fact is that we advertise less than our competitors, but we get deeper with each client, make them happy and keep them coming back."

Many business owners, he explains, spend time and marketing dollars trying to attract new clients.

"I have always found it far more cost-effective and profitable to market to people who are already customers," he says. "The history you have with existing customers gives you many advantages over the competition. You know things nobody else knows about your customers, their preferences and idiosyncrasies. You can use this information to target your existing clients to produce additional sales and create long-term loyalty."

That's a powerful base to work from, Di Julius says.

"We have more than 35,000 clients, and our average client spends $55 a visit. If we could get one-third of our clients to come one more time a year at an average ticket of $55, we would generate more than $635,000 in additional revenue," he says. "With that kind of growth, who needs to advertise or even worry about finding new clients?"

Or look at it another way.

You have 3,000 clients per month who spend an average of $30 with your company. That's $90,000 a month in revenue. By targeting each of these clients with a goal of getting them to increase their spending by $3, that's $9,000 extra each month, or $108,000 in new revenue each year.

"Whatever the price of your average sale, you can see that an increase of just 10 percent can significantly affect your bottom line," Di Julius says. "And,this concept applies to virtually any industry." How to reach: John Robert's Hair Studio & Spa, (216) 839-1430

Cyclical activity

One key to John Di Julius' success is that several years ago, in the early days of his company, he and his management team sat down and developed a Customer Service Cycle.

"The foundation came out of this initial brainstorming event," he says. "And we have used it ever since. Every year we add new features to improve it. We identified the stages of every possible situation a client could encounter, and we brainstormed what we ideally want to happen at each stage of the cycle."

Here is an abbreviated version:

* Initial contact. Act in a professional and courteous manner and reduce any anxiety and uncertainty caller may feel. Educate and inform the caller, book the appointment and provide an opportunity to schedule additional services.

* Delivery of first product or service. Create a truly friendly atmosphere and provide a great experience. Exceed the client's expectations then provide an opportunity to schedule another service. Give an impressive send-off.

* Follow-up. Use a phone call, postcard, birthday card and copy of the company's newsletter.

* If a client does not return. After four months, send a "We Miss You" card. After eight months, send an incentive to return, such as a 25 percent discount. After 12 months, call to survey why client never returned.

* If a client does return. Recognize that client is now a repeat customer. Repeat all steps of initial contact stage. Source: "Secret Service," by John Di Julius