Operation Case | Simple is the best way. How well do you know your operation business?

I saw a friend post this in the circle of friends :

In fact, I found that many people are lost in the fragments of knowledge. Some people hang out in groups to listen to the so-called masters sharing, and they talk about certain opinions all the time. Simple industry viewpoints and industry experiences have begun to sound mysterious and unfathomable. It's not that you have raised your IQ, but that you are running further and further away from others.

The case I want to share today is also intended to illustrate what the friend above said. This case is some information I learned from chatting with the barber when I went to the barber shop to get a haircut a long time ago. You can see how the barber, as the most real operator , applies our so-called operation theory to the fullest in his daily work. Only then can we truly understand that the success or failure of any operation does not depend on what kind of operation title you have, but on how deeply you think about users and business.

1.

The following is a summary of the relevant information:

Barber shops, like movie theaters and restaurants, are regional service-oriented businesses. This type of service that requires a physical store can only serve a very limited number of people. The size of the barber shop and the number of barbers directly determine the number of customers it can serve.

After a barber shop has been open for more than two years, it will basically penetrate the area it can radiate. In terms of the number of consumers alone, 80% of the consumption is from repeat customers, and new customers account for less than 20% every day. The source of these less than 20% new customers is mainly due to the continuous relocation of new residents to this area, which is a typical feature of megacities like Beijing. Similarly, in fourth- and fifth-tier cities with weak population mobility, the proportion of new customers will be smaller if the store has been open for a long time.

A shop with 10 barbers can only accommodate about 150 customers a day. After exceeding the service limit, the service will not be released without restrictions. Instead, a reservation system will be implemented to prioritize the service quality of existing members.

Shops cannot simply expand their store size and hire barbers. They need to consider the average income of barbers, the number of people in the community within the covered living radius, rental income, etc.

After reaching an equilibrium value, what you need to do is to continuously optimize the customer base and expand SKUs. Optimizing the customer base means gradually eliminating low-paying customers from the existing customer base and continuously converting them into high-paying customers. Optimizing the customer base is a long process that requires consideration of various factors such as market competition and the pace of store development. For example, whether the number of customers currently served by the store has reached its limit, and calculating the impact of price increases on customer retention .

Weekends see the peak number of people, between 100 and 150.

Based on a one-year service cycle, a more experienced barber serves about 700 clients. About 400 of them are old customers, and an old customer is defined as someone who comes to the store and directly seeks service from a designated barber. The remaining 300 or so people are liquid customers, or one-time customers.

Moreover, a large portion of these 300 or so customers were introduced by about 400 old customers, and a small portion were completely new customers assigned to the barbers.

There are about 400 customers, 2/3 of whom are girls and 1/3 are boys.

Girls have greater consumption potential and can purchase more SKUs, such as perming, hair dyeing, skin care, etc. They are high-value customers.

The value of a 1/3 group of boys is that there is a certain probability that they can introduce girls to choose this barber, such as their girlfriends, family members, etc.

The customers served in a year are basically repeat customers from these 400 old customers and occasional new customers.

Among them, 50% of customers are loyal users, defined as those who make an appointment with the corresponding barber before coming to the store and will not cut their hair except by this barber.

When a barber has this level of loyal customers, he can consider raising prices, which will be increased gradually to continuously eliminate low-contribution customers.

Barbers do not have a basic salary. 20%-30% of the income from each order will be used as commission, the shop will take 30%+, and the remaining 40%+ is for operating costs, such as rent, water, electricity, etc. This is true across the industry.

A barber's time is inherently scarce and cannot be replicated. The upper limit of customer service per day is about 10. Therefore, continuously improving the purchasing power of these 10 customers is the key. Perming 5 girls' hair and cutting 10 boys' hair in a day are definitely two different ways of making money. However, if the barber wants to raise the price, the shop needs to evaluate it, and the shop will decide whether to raise the price based on the overall situation.

Barber shops will intervene in pricing to balance the relationship between barbers, and whether or not to increase prices will be based mainly on the barbers' wishes in the early stages. However, if some barbers do not raise prices for a long time in order to accumulate a large number of customers, the quality of service will easily be affected after the service limit is exceeded. Other barbers lack customers, which will affect the stability of other barbers over a long period of time. This requires barbershops to intervene in price increases to balance the interests of all parties.

The shop has the same ability to control barbers as it does employees. There is no base salary, and the 20%-30% commission is a salary structure set by the store in order to maximize employee enthusiasm and ensure the store's gross profit margin.

A barbershop is like a trading platform. In addition to attracting more customers for barbers, it also needs to control the service quality of barbers on the supply side and constantly find the balance between the quality and quantity of services provided by barbers. The allocation rules need to be continuously optimized to ensure the best overall customer experience and achieve higher revenue.

The above is basically the operating logic of a barber shop and the barber’s customer management method.

2.

During the chat, when I found that the barber knew his customer base in every dimension, I felt more like a beginner who only mastered the Internet operation methodology and could only talk about it on paper. I am ashamed of myself.

In fact, barber shops have already maximized all Internet operating methods. Too many operational logics can be applied to any one point, so we will not spend too much space here to talk about how barbers embody the so-called operational methodologies such as user stratification, user portraits , platform operations, content operations , sku stratification, market research, pricing strategies, distribution mechanisms, event operations , etc. in their daily work.

Many Internet operators are too impetuous and forget themselves when they learn some new terms on the Internet. What we claim to do and what we talk about every day is to constantly require ourselves to understand the industry, be familiar with the products, be sensitive to data, and understand users. Is this really the case?

I believe that a barber definitely doesn’t understand any operational thinking . The only thing he thinks about every day is how to save more effort and still earn more. This forces me to calculate every day how many loyal customers I have, which loyal users are likely to buy more services, which customers haven't come for a long time, etc. However, most of us operations practitioners cannot be as familiar with our users as a barber is with his customers. Pay less attention to nonsense and focus more on the most basic business logic to reversely design all operational actions.

We should really learn from our predecessors in traditional industries.

ps: Teacher Zhang Liang mentioned a sentence before, not understanding operation is the real operation . I don’t know if this article can explain some truth.