Reading time: 10 minutes approximately
Imagine you are in a salon, getting a haircut and the phone at the salon’s reception keeps ringing continuously. After some time, your hairdresser leaves your haircut midway and attends the call, answers the caller’s queries regarding haircuts and pricing, checks the calendar, negotiates dates and timings, books an appointment for the caller and then finally comes back to finish your haircut. This is a bad experience and a waste of time for everyone – you as the customer getting the haircut, the hairdresser, and the prospective customer on the phone. What if these reservations and the allied activities could be digitalised?
In this article, Orjan Johnsen (Orjan), CMO at Cutters, a leading chain of hairdressing salons in Norway, Finland and Sweden, talks about Cutters’ pioneering efforts towards digitalisation of the hairdressing industry in Europe. Narrating an example of inter-team collaboration at Cutters, Orjan highlights that understanding customer behaviour is crucial for innovation and product development from a customer perspective, regardless of the department involved. The most important factor is to translate customer knowledge into viable products that improve the customer journey.
What’s Inside?
- Cutters: Digitalising Europe’s Hairdressing Industry
- The Cutters Concept
- Winning with Collaboration
- Storytelling for Enhancing Brand Awareness
- Orjan’s Career Journey
- Final Thoughts
- Lessons Learned
Cutters: Digitalising Europe’s Hairdressing Industry
Cutters is one of the Nordic region’s most popular hairdressers, founded in December 2015 with the purpose of providing high-quality haircuts at reasonable prices. Currently, they are one of the fastest-growing hairdressing chains in the Nordics with 133 salons in Norway, Sweden and Finland and are still growing. Norway is their biggest market with 100 salons, accounting for 80% of Cutters’ revenues.
In Norway and many other European countries, the hairdressing industry is characterised by several mom-and-pop salons, stand-alone salons, or two or three salons working in collaboration. There aren’t many big players. The industry development has thus been slow as existing salons do not have the interest or the tools to digitalise and evolve the industry.
Traditionally, in Norway, scheduling a haircut involves calling the salon to make an appointment. It’s the hairdresser who has to answer the phone while they may have been busy cutting hair, making it inefficient and inconvenient for the customers and the hairdressers. Hairdressers have to do a lot of other stuff that takes time and focus away from actually cutting hair.
Cutters saw the gap and the opportunity to solve the problem with digitalisation. They want to be the hairdresser for modern consumers – young professionals who are highly educated and high-income customers with busy lives and cannot plan their hair-cutting schedule weeks in advance.
The Cutters Concept
Cutters works on a unique drop-in concept based on three factors: Effectiveness, quality and price. Cutters salons are easily accessible with a drop-in haircut that only takes 15 minutes, and quality is ensured by having some of the best hairdressers onboard. They offer only haircutting services at a standard haircut price regardless of gender and haircut style.
Broadly, Cutters’ customers fall into three categories: (a) Those who prefer consistent haircuts without any colouring or washing (b) The Inbetweeners, primarily women, who use Cutters for maintenance between colouring and highlighting appointments with their regular hairdresser, and (c) Families with three or more children. Cutters’ salons are located in shopping malls, offering families the opportunity to book appointments for all family members while completing other errands.
Customers can make appointments through the app or in-store, which is also automated with an iPad and a payment terminal. Customers’ phone numbers are the unique identifiers with which Cutters creates unique user profiles. Cutters communicates with its customers through SMSes, emails and in-app push notifications. Significantly 55% of the users reserve through the app which allows them to check availability in real-time so that they can go just two minutes before their turn without having to waste time waiting in the salon.
By using technology, Cutters is trying to make the customer journey more efficient. They have also made the journey for hairdressers more efficient, enabling them to handle a lot greater volume than other hairdressing chains and only focus on cutting hair as everything else is automated. In effect, Cutters is also able to deliver a quality cut at a much lower price than the average Norwegian market price.
Winning with Collaboration
Orjan heads both the Marketing and the Tech departments at Cutters. He shared an example when the teams collaborated to give customers what they wanted but in a slightly different way which ensured it was a winning offer for the customers as well as the business. The suggestion came from Marketing while Tech found a quick way to test the hypothesis that if they discount haircuts for loyal customers, they will increase the frequency, decrease churn and increase retention.
Cutters recognised the demand for a loyalty program from its frequent customers who cut their hair 12 times or more a year. Cutters also needed a locking mechanism because they did not want to just give away cheaper haircuts and get nothing in return. A traditional loyalty programme would give every sixth cut free, with customers having to earn those cuts within a given period of time. However, this type of programme takes over a year to see the effect, and there’s no guarantee that it will be positive or negative.
The team found an alternative to the traditional loyalty programme which could show results – whether positive or negative – almost instantly.
- The team spent two to three weeks developing the product where they created bundles i.e., offering haircuts in bundles of three, six or 12 cuts with a validity of one year and customers having to prepay them. So, it was not a loyalty programme per se but customers got an increased discount – the bigger the bundle the more the discount.
- The team then released the new product to a portion of Cutters’ customer base just through their CRM system. They also used it to win back the least loyal customers, the ones that were about to churn. They also ran this as a welcome offer to all new customers.
- Gradually, they extended the offer to other customers with varying haircutting frequencies. Every sale was an increase in frequency or a win back or an onboarding. When the offer started gaining traction, it was released to the entire customer base.
The product was released in mid-November and Orjan knew it was a success when they already had 1500 bundles before Christmas. So, from idea to proof of concept, it was less than two months period, instead of waiting for a year to see the results. Moreover, it was good for liquidity to get the money entered concurrently, it was good for the customers with high frequency, it was easy to measure the effect directly and it was good for the business, making it a win-win-win product offering.
Significantly, Cutters recorded a 23% increase in revenue in FY2022 and had already achieved a 20% revenue increase in the first two months of FY2023, across markets.
Storytelling for Enhancing Brand Awareness
Orjan and his team are focused on enhancing Cutters’ brand awareness across Norway, Finland and Sweden. Explaining the need for storytelling, Orjan said:
When we started in Norway in 2015, we got a lot of help from PR and viral marketing campaigns. We were the rebel, the challenger. We still want to maintain that position, but now we’re also a large established player. You can still be a rebel but you have to change the way people see you. They perceive you differently when you are small than when you’re a big player.
Earlier, our focus was on telling people what Cutters is all about i.e., efficient haircuts. We’ve neglected to talk about the WHY and HOW. We want to tell the story of why and how our hairdressers are able to offer quality haircuts quicker than our competitors. It is because that is what we have been doing and we have gotten good at it. Moreover, our hairdressers go through our own Cutters academy programme which hones their skills.
Orjan elaborated on the ways in which Cutters is trying to enhance its brand awareness through storytelling:
1. Redefining the Communication
Shifting the focus from simply promoting haircuts to telling a more comprehensive story about the brand’s mission, value and why Cutters exists. Storytelling about the WHY and HOW of Cutters’ efficiency, and the sort of problems they are solving for their customers rather than just saying, “Go, get a haircut”.
2. Switching Marketing
Using more channels and areas that are good for storytelling, rather than frequency and conversion, to engage with customers more meaningfully. Utilizing a variety of channels and platforms that are conducive to storytelling, such as social media, podcasts, and video content.
3. Traditional Conversion Activities
Creating explanatory videos about how the concepts work at Cutters and why Cutters exists as a part of the onboarding process. These explanatory videos can be used on external channels as well as in the CRM onboarding flows and content marketing.
4. Video Communication
Increasing the usage of videos for communication with plans to increase it further. With the rise of social media and ease of creating and sharing video content, video communication has become a popular method for businesses to engage with customers.
5. Testing Different Channels
Across all three markets (Norway, Finland and Sweden), the majority of the marketing budget is through Meta and Google. Now, Cutters is increasing the channel mix and testing different channels to get exposure to people who haven’t heard about Cutters before.
Orjan’s Career Journey
Sales is an important part of Orjan’s background, having worked as a telemarketer while pursuing his Bachelor’s in Marketing Communication. He firmly believes that everything that’s done in a company, whether it is marketing or product or anything else, should generate sales otherwise they have no purpose. To do that you have to create value for the customer or target audience, he said.
Orjan started in an advertising agency where he gained valuable brand marketing experience in different industries. He then transitioned to the FMCG industry, briefly serving as a brand manager for three products in the Norwegian retail market while working for one of the biggest companies in Norway.
Orjan attributes his commercial product development skills to his time at Schibsted, a Norway-based international media group, where he worked in different companies within Schibsted in the media industry. Eventually, he became the product lead for all teams developing advertising products across all Nordic sites.
Orjan experienced one of his most challenging roles when he joined Sbanken, a purely digital bank in Norway, as the Head of Sales and Marketing. He had a huge responsibility for 140 people and a sales budget exceeding 18 billion Kroners encompassing all of the bank’s products, app, UX team, and customer service. He also oversaw all communication activities of the bank, except PR.
Currently, Orjan is the CMO of Cutters with additional responsibilities of overseeing the Tech team and product development.
Final Thoughts
Sharing his advice for marketers, Orjan said that – Marketers historically have been seen as fun, creative people who aren’t data-driven or important to the business. However, marketers now understand both the CFO’s numbers and the customer’s feelings.
To be successful in a company, you need to be data-driven in your decisions and have a plan for testing hypotheses. Avoid starting sentences with “I believe” when discussing business and instead use “I have a hypothesis”. Be aware that not everyone in the company understands the value of a good marketing department, so it’s important to back up your ideas with data to demonstrate authority.
Lessons Learned
| 1 | Understanding customer behaviour is crucial for innovation and product development from a customer perspective |
| 2 | Consumers perceive the same brand differently when it is small than when it is a bigger player |
| 3 | Businesses can enhance brand awareness through effective storytelling |
| 4 | To be successful in a company, marketers need to be data-driven in their decisions and have a plan for testing hypotheses |
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