Hair extensions for salons
Hair extensions for salons
- Audience Profiling
Using a strategic approach to quantitative and qualitative market research to help our client in the hair extension industry bounce back from COVID
Background
Our client is a supplier of hair extensions to the beauty industry, offering market-leading specification products to salons.
During COVID, the entire industry was significantly impacted by end-users buying less, owing to not going out and socialising. This led to a tough period for the business and the wider industry. Now that COVID restrictions have fully been lifted, the business needed a strong period to bounce back. They approached us with a brief to provide tactical marketing to their customers, aiming to deliver 10% YoY growth.
When we reviewed the brief, we realised that a tactical marketing approach would be ineffective. We needed to take a step back and conduct intelligent market research, and devise a full marketing strategy to inform any tactical approach.
The challenge
This particular industry does not typically prioritise innovation or a strategic approach to marketing, instead generally using more tactical approaches.
We would deliver a customer segmentation strategy to the client so that any future sales and marketing activity was aligned. We used a staged approach to establish the market position for our client; understanding the segments of the market (and crucially, which were most successful and profitable), as well as gauge the current perception of the business.
Our research would inform the client’s customer acquisition and retention plan for the year ahead, both in terms of quantity and quality of new and existing business.
We uncovered that there were five key segments of customers:
While the focus was previously equal to all five, our research uncovered that two segments in particular were key. These segments were more willing and able to sell the premium products (real hair), and justify the higher price point (the client’s specialism justifies this).
We also uncovered that the conversion rate for these two segments far outperformed the other segments (these segments sold in the higher specification of the premium products), clearly signalling that more effort should be given to seeking these customers. This insight was brand new to the client and formed the basis of a new business strategy for the year ahead.
The solution
We approached this as a full market research project using both qualitative and quantitative data approaches.
We interviewed 25 existing customers who we determined would give us the best quality data, to query the perception of the business at present, as well as its overall place within the market.
More typically, this research might have been carried out with a larger set of customers. Given a limited budget and timescale, we qualitatively surveyed a robust enough data set of 25, and then sought quantitative research from a wider pool of around 400 similar users in the industry to test the quality of the set. This, as well as our existing relationships which enabled us access to the right audiences, meant that we could get more useful data at a lower cost for the client.
We managed to deliver high-quality insight to the client, the likes of which they had never seen before, at an affordable cost, in an industry which doesn’t typically use this approach.
The new business objectives formed from our recommendations, targeting professionals and specialists (and the weighting of customer acquisition vs. retention), has helped ensure that new business efforts have since been in areas less affected by the looming recession and difficult economic times for many businesses. At the heart of the project was delivering market-leading intelligence at cutting-edge efficiency.
The results
Instead of just focussing on tactical marketing, we delivered a robust marketing strategy with cutting-edge insight that allowed our client to go into the new year with the right objectives and direction. Our insight proved invaluable in terms of shifting the focus away from smaller retailers and towards larger more profitable sales, and ensuring that sales and marketing teams had a cohesive strategy to deliver the required performance.
The project was delivered to tough timescales, and provided a hugely valuable output to the client. We were able to adapt and deliver world-class insight within a strict budget, in an industry which doesn’t typically use this approach.
The financial period following our insight and strategy is still ongoing, and we’re excited to see the commercial performance that it helps to drive throughout 2023.
What the client has to say about working with Bonded
Our partnership continues to this day, and the CEO at our client had the following to say about our work:
“After such a tough period over 2020-2022, it has been incredible to take the insight that Bonded provided and use it as a platform to deliver the growth we needed to bounce back.
We’re hitting our commercial targets and can go into the coming years with the right approach. It’s thanks to quality data and insight which we wouldn’t have thought would deliver such useful impact to our business. To do this in an environment where many of our competitors have since struggled makes it even more satisfying.”