I discovered Tony when I stumbled into his hair salon in downtown Toronto one day, running late for a meeting, and asked for a quick trim. Tony obliged and he had me out the door 15 minutes later, cleaned up and $28 poorer.
I thought $28 for a haircut was a lot, but I liked Tony, and I assumed he had some considerable expenses given his location in downtown Toronto. His salon was right across the street from my office, so I went back to see Tony a month later.
Every time I returned, Tony welcomed me by name and ushered me to his chair with an easy smile. I became loyal to Tony and went back every five weeks or so for 10 years. Sometimes I would call for an appointment on Tony's day off and be offered another hairstylist, but I usually waited, preferring Tony's easy banter about life back in Italy and his low-key demeanour.
Since selling my last business, I no longer go downtown every day, so Tony's salon has become less convenient. One day I was in a rush and bolted into Supercuts down the street from my house.
Supercuts has a different model. It doesn't take appointments. Clients are served on a first-come, first-served basis. I get a different person cutting my hair every time and I am charged $15. The Supercuts location is close to my home, and I usually get in and out quickly. I'm now loyal to Supercuts.
Even though they are both in the haircutting business, the Supercuts model is more scalable and sellable than Tony's. In fact, Supercuts is one of the brands owned by Regis, a multinational Fortune 500 company traded on the New York Stock Exchange with a market capitalization of $847 million as I write this column.
The Supercuts model scales because its formula is independent of any one hairstylist. I was loyal to Tony, not his company. Now I'm loyal to Supercuts, not any one stylist. Gives you something to think about as you build your company with hopes of selling one day.
Special to the Globe and Mail
John Warrillow is the author of Built To Sell: Turn Your Business Into One You Can Sell . Throughout his career as an entrepreneur, Mr. Warrillow has started and exited four companies. Most recently he transformed Warrillow & Co. from a boutique consultancy into a recurring revenue model subscription business, which he sold to The Corporate Executive Board in 2008. He is the author of Drilling for Gold and in 2008 was recognized by BtoB Magazine's “Who's Who” list as one of America's most influential business-to-business marketers.
