On the heels of the launch of their Summer Collection and ahead of the annual Salon Owners Summit in Dublin, Ireland, we caught up with Phorest’s CEO and founder, Ronan Perceval, to learn more about how working as a salon receptionist led to the creation of the global software company. Plus, learn about some of Phorest’s latest features and how they’re helping salons manage their business, retain staff and more.
“The growth in Canada has been phenomenal,” says Perceval. “Our business has doubled within the last 12 months.”
Q&A with Phorest CEO and Founder, Ronan Perceval
I understand you worked in a salon as a receptionist. Tell us about that and how it led to the founding of Phorest.
Twenty years ago, I got a job working reception in a busy hair salon in Dublin. At the time, it was just a job; I didn’t think I was going to spend the rest of my career doing this. When you’re young, you’re trying different things out. However, I immediately fell in love with the industry. I just loved the atmosphere and energy [of the salon]. The way that when people came in and how the salon made them feel, and how when they left, they felt even better than when they came in. Things like that might sound really innocuous, but they actually mean a lot when you’re young and trying to feel your way around. You don’t have that same feeling working in a restaurant or any other kind of retail environment, so that was really interesting.
How it led to Phorest was that [the salon] wasn’t using any software. This is a long time ago, so they were just using a pen and paper, and it was my job to [book] appointments. The owner of the salon, Tina, was only a bit older than me at the time and she had her own clients as well, so she would leave a lot to me and the salon’s manager to run things. It was a great experience, but I noticed that there were a lot of no-shows. There were seven stylists at the salon, and there were like two no-shows a day. I just started adding them up and suddenly the total was almost $20,000 a year. It’s a lot of money, so I suggested that we send our clients a text message reminder. Today, it’s not that innovative but at the time, text messages were a new thing. So I asked a friend to build a piece of software for us that can just put in the phone number and time of the appointment, and send out a reminder. That’s all it did and within about four weeks, we got rid of nearly all our no-shows. Of course, there were still people who were genuinely sick [or couldn’t make their appointment for another reason] but even they would call in the night before [after they received the text reminder] to reschedule. Suddenly, [we realized] we kind of saved Tina around $16,000, just by doing this one thing. I started to wonder if we could do this for other salons and if there are more things here, so that’s kind of where it started.
It sounds like you were able to identify the problem of no-shows early on, and understood how automation (a big part of Phorest’s software), can help.
Yes, and it was actually only a few months after I joined the salon that I spotted this problem and happened to have a friend who had been in college with me who was able to [help build the software]. So the stars aligned a bit and then the salon got really busy in November and December. After Christmas, when we all came back to the salon, it was dead. It was the beginning of January and the owner was a bit worried because there were no appointments [scheduled] even though she’d been really busy. By now, we had like 1,000 cell numbers so I said, “let’s send out a text message to all of them with an offer.” Again, this doesn’t sound that amazing now, but at the time, we’ve never heard of another salon doing this before.
So we sent out an offer to people to book in the month of January and receive a free travel-sized product. Nothing happened for a few minutes [after sending the text message] but then the phone started ringing and it didn’t stop ringing for three days! I was taking in all of these bookings and I think that’s how we really understood Phorest because the reminders were one thing, but the idea that you can use their information that you have in the CRM [customer relationship management] and use that to market to it to make the salon busier in a quiet period, that is what Phorest has basically been for 20 years now, except now we use Instagram ads or online reputation management. That was when we knew how powerful it was.
I worked at the salon for just under a year. In January and February, the salon was really busy and I was already thinking we needed to develop more of the software. I used to do a bit of graphic design, so I was able to mock up kind of what I wanted the software to do and come up with this idea of a product. I still worked in the salon part-time—a few days a week—until I was able to work on Phorest full-time.
What would you say has changed in the industry since you last worked in the salon?
Funny enough, a lot of it hasn’t changed. People talk about change all the time but if you’re brutally honest, the actual surface itself hasn’t really changed that much. Ultimately, a customer comes in and spends time in the salon getting their hair cut or coloured or get a hair treatment. It’s this pampering time for them. They chat with their stylist, whom they usually already have a relationship with, and then they might buy a product on the way out. That’s like 95 per cent of how salon businesses make money. It’s exactly the same. It’s the same skills. You have to be good technically and be a good people-person as well.
I think how you promote yourself is totally different now. Obviously, social media didn’t exist [20 years ago]. So stylists can now really build up their reputations that way. People are much more likely to be self-employed now than work at big salons, which were kind of the only route back then. Some people were self-employed but it was considered really low-end, whereas now you can build up quite a good reputation and be self-employed, so that has changed.
Technology has changed in terms of being able to manage the business and manage your customers and market to them on social media. How you book people or pay, along with communicating to clients, advertising to clients and managing the client experience, are things that haven’t really changed. They’ve been automated.
Most of the changes that people refer to are results of the pandemic and lessons learned during the lockdowns, with an increased demand for more work-life balance, flexibility, etc. What have you noticed in terms of this?
The big one is staff—stylists in particular. [Retaining] stylists is harder and there are a lot less people coming into the industry, and we can see that everywhere in the world. It’s true in Canada as well, you just have less people going into wanting to choose this career. As a result, it forces the squeeze. The main reason for this squeeze is because the demand for the service has never been bigger. The market is always growing because people over time have more disposable income, and this is one of the things they like to spend money on. They like to spend money on experiences and going to a salon is an experience that a lot of people can afford; there’s a salon for everyone. As a business and service that people want to spend money on, the demand has never been higher.
We’ve learned that people love this and they appreciate it more than before. Getting new staff and hanging onto good staff is the problem for the future and it’s only going to get worse. It’s a big challenge and it means that the way you treat people, manage and motivate people is so important. It’s harder for some businesses that were big salons 20 years ago. How you treated people then just doesn’t work now. The stylist has more power now than they used to, so you’ve got to motivate them and help them.
One of the things we’re doing in terms of how we’re addressing that is a big focus on tipping because we’ve got to help salons increase the take-home pay of their stylists. That’s an obvious way that salons can attract more people—if you’re going to pay them 10 or 20 per cent more than they can make elsewhere.
The big thing we’re going to do next year is increase the take-home pay anywhere between 10 and 20 per cent, which is a lot, right? It’s like a raise for their staff. Doing things in the right way, where we’re making sure that every single client visit uses all our technology, apps and notifications, and every single client gets asked and is encouraged to leave a tip for their stylist, whom they know. If you do that and you inject that into their whole journey, as opposed to just at the end, and you remind them everywhere, allow them to set up an automatic tip every time they come in, you could increase tipping up to 20 per cent and as a result, we can really help our salons increase the wages for their staff.
What we know is that an overwhelming number of people tip everywhere, but a lot of them don’t tip as much in salons as they do in other businesses because it’s more expected to when they go into a restaurant or bar or whatever. But when they go to a bar or restaurant, they don’t actually know the person that they’re tipping. But when they go into the salon, that’s a person who lives in their local area whom they’ve known sometimes for maybe 10 or 20 years. We’ve done loads of surveys on this and the consumer wants to tip more but it’s harder for them to do or it’s not as obvious or easy to do [compared to other businesses], especially because they’re using credit cards now and no one is really using cash anymore. So now, you can set up automatic tips that will tip their stylist every time they come in. They choose what the percentage is and it’s saved so they never have to think about it again.
Tell us about the types of salons that can benefit most from Phorest.
Larger salons who are much more likely to employ their staff use Phorest; that’s the segment of the market that we serve. For the vast majority of those businesses, the customers tend to have slightly higher disposable incomes. The average Phorest salon has 10 stylists and that segment we think is really important to look after, because I think that’s the segment that’s been maligned a lot over the last few years. Even though the consumer demand for that segment has never been higher—people want to go to a nice place—the huge growth in the industry has been around self-employed. However, a lot of those people who are self-employed got their education in a premises that was run properly. Somewhere that was run with education programs and training on how to talk to clients, how to cut hair properly and do things and how to run a business. They learned that in salons, so it’s really important that these salons are around for customers, because customers want to go to them, but secondly, that they exist because they’re educating the whole industry. If everyone was self-employed, there’d be no [in-salon] education, which would be a huge problem in the long term.
Phorest launched its Summer Collection earlier this year with a new suite of products and services. Tell us about that.
We launched our ads manager, which allows people to set up ads for Instagram or Facebook but it uses their client data to identify new customers that look like their top customers and just serve ads to them. It’s an incredibly powerful product, so that’s been huge for us.
We launched new reports—you can build your own report now so if you’re a bigger salon or a group with three or four salons, you might want to have your own report the way you want it rather than just using the standard things that are provided with salon software. We can set that up for you.
We also have quite advanced pay solutions. You can do variable deposits online. For example, if someone has been no-showing all the time, you can require them to pay the full price [upfront]. Or if they’ve always been a good customer, they could just pay a 10 per cent deposit. We have advanced features for a busy salon to really offer a bespoke experience for their customers and manage that well, without them knowing that they’re getting an individual experience each time. For example, saving their card information so they don’t have to take out their card to pay and they can just walk out of the salon with their service already paid for.
Earlier this year, we had the pleasure of attending Phorest’s annual Salon Owners Summit in Dublin, Ireland, with several Canadian salon owners, managers and hairstylists. What can people expect from the 2024 event?
We love our customers, and we have some great customers in Canada. They’re lovely to deal with; Irish and Canadians get on very well! [The Summit] gives them something different to do. Most brands that they work with aren’t saying, “listen, you got to fly to Dublin every year for events.” It’s just been fun, and they really seem to like it. I think we’ve sold the most tickets ever to Canadian salons this year; there are 40 or 50 coming over, so it’s amazing.
Basically, there are three types of speakers that we have at our event. The first one is the one that is at every event. We have our industry speakers that people love, but they see them at other events. We also bring in people outside the industry, who can add something to the industry, but they probably wouldn’t have seen them before. This year, there’s a surprise we’ll have that will be one of the best things at the event!
The third thing that we have, which is unique to us, is we will launch features that [attendees] will get first. For example, the ads product from our Summer Collection was pre-launched at the Summit and the 500 salons who attended the Summit got access to that product for six months before it was released.
We will have a bunch of features and lots of new stuff. Can’t wait to share all of the things that are going to make salon life easier, help you make more money, and things you can access to before anyone else.
It’s a lot of fun. We get a lot of people travelling from around the world. Out of the 500 or 600 attendees, only about 150 are actually from Ireland. Everyone else is from the U.S., Canada, Australia, Germany—it’s a really international field, but they all have the same thing. They all have the same type of salons around the world, so something to relate to but there’s people you might never normally meet so it’s also great for networking.
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