Listen to your Customers: The Story of how Great Clips Changed the Salon Industry

 

Ray Barton is the Chairman and former CEO of Great Clips. I had the opportunity to talk to him about how he built Great Clips into the world’s largest salon brand. Here are some of the key takeaways from our conversation. You can hear more of Ray’s insights at the Compete Through Service Symposium on November 7th.

You have been very successful building a huge national franchise business. How would you describe your personal work ethic, and how has it been instrumental to the growth of Great Clips?

I have five sisters and we all learned very early that we had to work for what we wanted. That carried over to the business. It was easy for me to make the commitment of time and energy it took to build a business. Building Great Clips was fun–it never felt like work . . . it was always exciting and challenging. The work ethic came naturally–it was part of who we were.

What else would you attribute to your success in the service industry?

Great Clips led the change in the salon industry. We changed the way customers were served. When we started the industry was organized around the stylist.

Salons were open five days a week with very limited hours. Customers had to make an appointment. We changed that: we were open seven days, and 9AM to 9PM weekdays. Customers could walk in anytime, when it was convenient for them, and get a great haircut. We have a system designed to find out what the customers want and to make sure they get it.

We also changed the industry for the stylist. We were among the first to offer paid health insurance, paid training, and paid vacations. We provide an amazing career path, which can lead to salon ownership.

Most importantly, we had a great team. Everyone pulled together. We listened to one another, treated each other with respect, and worked together to solve problems. This built trust. We were a team, we supported one another cheered for one another, and celebrated each other’s successes.

Can you tell me about some of the difficult times you had along the way? Maybe things that you tried that didn’t work or competition was executing better at some point?

We’ve had many challenges as we built Great Clips. One was keeping our system simple and consistent. Today we have over 3,600 salons and 35,000 stylists.

To deliver quality to such customer requires we keep our business model simple, so it can be executed over 900 million times a year. This ensures each customer gets exactly what he or she wants.

Because we were different than other salons, people kept trying to change us, add services or products. We had to stay focused on what we did, haircuts, and get better at delivering a great haircut experience rather than change who we were.

To build a brand, we also had to stay consistent. Each salon had to look the same and carry the same products, deliver a great haircut every time.

I can see how it would be very difficult to have that consistency across the salons to get to that point. But once you have it, it’s a lot easier to maintain right?

We have a simple system, a common language, and a few measures to determine how we are doing delivering a great customer experience. This has been very powerful and led to 40 straight quarters of same-salon sales increases.

We are very focused. What keeps me awake at night is how we maintain our focus and keep our system simple. How do we resist changing what is working because we are bored with it.

How do we avoid changing who we are and instead work to get better at what we do? This will always be a huge challenge.

When forming your strategic vision, how much did you have to adapt to the market, and how did you navigate the unknowns in a changing customer landscape?

Our strategy was to listen to the customer. We want to lead and be different because that was what the customer wanted, that is what the customer demanded. We adapted to what the customer wanted. We were always very customer-focused.

Lastly, what advice would you give entrepreneurs entering the service industry today?

Understand what your customer wants- that’s job #1. Our industry was organized around the stylist, and we flipped it.

We had to motivate our teams to deliver what the customer wanted and to show them that everyone wins when you give the customer what they want.

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Ray Barton joined Great Clips in 1983 as CEO. He led Great Clips from 4 salons to more than 3,500 salons and annual sales in excess of $1 Billion. Prior to joining Great Clips, Barton was a member of the professional staff of the international accounting firm Alexander Grant & Company (now Grant Thornton), Vice President and member of the board of directors for the North Central Region of Century 21 and Vice President of Quintex Energy Inc.

Barton serves on the boards of directors of TCF Financial Corp. and Scottsdale Lincoln Health Network., and is a Member of The Board of Trustees of the University of St. Thomas. He is a former chair of the board of Children’s Hospitals and Clinics of Minnesota and serves on several advisory boards of private corporations. Additionally, he has served on the boards of directors of the Minneapolis Heart Institute Foundation, the American Association of Cosmetology Schools, and the Junior Achievement Association of the Upper Midwest. He is a longtime member of the Young Presidents’ Organization, World’s Presidents’ Organization, and past President of the Minnesota Chapter of the World Presidents’ Organization.

Barton has received numerous awards including the Minnesota Business Hall of Fame Lifetime Achievement Award, the John F. Cade Award, and the Minnesota Business Ethics Award, which recognizes Minnesota businesses that exemplify and promote ethical business conduct for the benefit of the workplace, the marketplace, the environment and the community.

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