The Barbershop Service Model

Every town has a handful of barbershops, each with their own brand, rituals, and cultural mores.  Due to the heavy integration of the customer into the service model, there are readily observable operational and economic principles at play and perhaps more so than in other businesses.

There are 2-3 chairs with female barbers and the other 7 chairs have male barbers at the shop that I patronize.  All of the barbers are native Chinese.  The conversation in the establishment is a mixture of English and Chinese.  It’s won many of the best barber awards in my town since it’s been open for the last seven years or so and it’s extremely busy; always.

Men’s haircuts are a couple of dollars less than some of the franchised chains, include a shampoo, hot towel treatment, and a straight razor with hot shaving foam around the ears and neckline.  The price was even lower when the shop opened in order to acquire customers (CAC).  When you walk in you grab a number and take a seat until your number is called or you can wait for a specific barber.

Recently, the shop eliminated its check-out station and added a couple of new cash registers intermingled between the chairs.  This accomplished the addition of a new chair.  The shop only takes cash and has an ATM inside that charges a $0.99 surcharge.

There’s a bank of 10 individual timers mounted on the wall that is very intriguing.  The barber resets the timer as they take a new customer, but the purpose of their use was previously unknown.

The last time I got a trim I talked to the owner who was cutting my son’s hair.  I decided to ask about the timers.  He told me that the timers are used to balance the quality of the haircut by controlling the duration.  You spend the most time in the chair when you get the shop owner.

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The proprietor said that if they are very busy the barbers have a tendency to rush to meet customer demand and that using timers is a tool for pacing.  The goal is for each haircut to last approximately 20 minutes.  It’s also surely understood by the barbers that the faster they cut hair the more money they get on that particular day whereas the owner is playing the long-game of repeated business.

Many businesses struggle to balance quality and quantity.  Companies dig deeply to determine their why to strike that balance between what some view as opposite ends on a see-saw.

I had an experience once in London for a special occasion that involved a traditional hot towel treatment and a full shave with a straight razor.  It was a novel experience compared to the traditional service where some of those skills had been lost and mass commoditized (quantity) away.

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The quintessential barbershop pole is a nostalgic, but also a historical artifact.  Barbers were the original surgeons and dentists of medieval times when bloodletting was common practice.  The pole evokes the use of bloody bandages that were hung to dry there.

Another interesting economic feature of barbershops is the compensation structure of each barber.  Generally, barbers work on either a commission split basis with the shop owner or pay the owner a set fixed fee also known as a chair rental.  Commissioned barbers are employees of the shop owner, while chair renters are an independent contractor.  Each compensation structure is laced with incentives and has plusses and minuses for both the shop owner and the barbers.

There have been some famous barbershops in the media.  The shop in Coming to America when Eddie Murphy plays all (almost all?) the characters is one.  Ice Cube’s movie Barbershop is another and on FX’s Atlanta Paper Boi spent an episode desperately in search of a cut as he followed his barber from ill-fated side-hustle to side-hustle.

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The conversations in these shops are comical, but they can also be psychological therapy-like sessions due to their intimacy and the relationship built over time with a specific barber.  Another shop in my town that has been in the same spot for several generations has seen local politics discussed and business gossip from the men leading those industries.  Unfortunately, the quality of the cuts declined as the barbers aged.

Anyone that is interested in a basic foundational start to personal financial planning should check-out The Wealthy Barber by Dave Chilton.  The quick read is set in a barbershop where the shop owner distills a series of financial lessons to a set of financial novices.  What better place for these hypothetical conversations to take place.

It’s no wonder that financial advice is now being dispensed over bar tops with glasses of wine in hand or across round tables with an amazing cup of coffee pour over made in a Chemex.  Money discussions can be very emotional and these acts help to remove the sterility from the environment.

Financial advisors are redecorating their offices and trading in the traditional desk interaction for something more power neutral and intimate.  Round tables and living room style setups are becoming more common.  Technology has allowed for more frequent touches for further relationship building as well as warm introductions to clients.

The intimacy of the barbershop, beyond just the economic and operational aspects can teach many industries customer relationship fundamentals.  Determine the market opportunity, develop a service model to meet customer expectations, execute, and evolve over time.  There are a variety of service models available in business while a customer-centric focus is paramount.  Do you want to provide the Apple Genius Bar experience or the big box experience?  Figure this out and be on the road to becoming a wealthy barber yourself.

 

 

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