David Wagner hopes his pay-it-forward approach to customer service will boost his eight Juut Salonspa locations through the downturn.
David Wagner — a self-described “daymaker” who, with wife Charlie Wagner, owns Juut SalonSpa — took time to get a quick haircut from Leaux Dyer at the salon’s Southdale location. He defines a daymaker as someone who performs acts of kindness to make the world better.
With a loyal following and eight bustling shops, Juut Salonspa owner David Wagner appears to be a hairdressing and entrepreneurial success.
Yet Wagner wasn't fully satisfied until he came to understand his true mission: He was a hairdresser not just because he wanted to cut hair, but because he wanted to make someone else's day.
He dubbed himself a "daymaker," put that on his business card and began spreading goodwill whenever possible.
He put daymaker on employees' cards too, and encouraged them to follow his example.
Now he's counting on this pay-it-forward attitude to see his company, his 400 employees and their increasingly anxious clients through what looks to be a challenging year.
"I call myself a realistic optimist," said Wagner, a 30-year industry veteran. "We'd love to see 10 to 20 percent growth this year, but we're banking on 5."
Juut, with seven salons in the Twin Cities and one in California, took in $28 million in 2008. That was $1 million more than the year before, an increase Wagner hopes to match this year.
Retail sales, which account for 30 percent of revenue, took a hit in October when the stock market plunged, Wagner said.
Bookings for haircuts and other services were strong through November but slowed in December as job losses grew.
"Guests aren't electing to go elsewhere, but instead of coming in every five weeks for a haircut, they might be stretching it to six or seven weeks," Wagner said.
Juut has countered with aggressive promotions. The goal is to double the 1,000 new customers who typically visit each week, Wagner said.
Juut also has rolled out express services -- a 15-minute nail polish change, for example, instead of a 45-minute manicure -- scaled down in scope and price.
Despite the unease, Wagner sees positive signs. Overall, business was up 2 percent in the first five weeks of 2009.
The Southdale location, named Salon of the Year in 2008 by an industry publication, did 33 percent more business in January than the year before, Wagner said.
Juut's training salon, though, is doing the best business now.
"Our New Artist Academy in Uptown is actually our most productive salon right now because people are getting $25 haircuts, and it's packed," said Wagner, who stopped doing hair about 10 years ago and now looks on his employees as his clients and focuses on recruiting and retaining them.
Wagner said he always was a daymaker, even before he adopted the term, which he defines as someone "who performs acts of kindness with the intention of making the world a better place."
Being a daymaker, Wagner said, has made him a better hairdresser, husband, father and boss. Wagner outlined his philosophy in a book, "Life as a Daymaker."
Dr. Gordon Alexander, president of the University of Minnesota Medical Center, Fairview, bought multiple copies of "Daymaker" to give to family members after meeting Wagner by chance on an airplane.
"His challenge to not be unaware of the people in our surroundings is very compelling," Alexander said of Wagner, who has addressed leadership conferences at Fairview. "He does it in a way that's light and yet so powerful, simple and yet profound."
Wagner's modern, European-inspired salons are a far cry from his early years, growing up on a farm near Hastings and getting haircuts from his grandmother.
He was 14 when he first visited a salon, and the fashionable women and the hairdresser's white Corvette sealed his career decision. "It was like going to Hollywood," Wagner recalled.
Wagner, already thinking of running his own salon, took business and art classes in high school. After graduating in 1977, he got a spot in the first class at what would become the Aveda Institute.
That began Wagner's long association with Aveda founder Horst Rechelbacher. First hired to park cars for Rechelbacher's clients, Wagner rose to vice president at 23.
Wagner left in 1986 to open Salon Salon, borrowing $10,000 from his parents. He merged with Rechelbacher's salon group in 1989, then bought out his mentor in 1991.
Wagner renamed the salons, including one he had bought in Palo Alto, Calif., in 1999.
The new name, Juut, came from a Japanese word, juuten, which Wagner said means to fill or refill. He shortened it to Juut, defining it as "to uplift humanity and serve others."
"David always stood out as being an entrepreneur," said Rechelbacher, who has sold Aveda and founded Intelligent Nutrients, a health and beauty product company that uses food-based and organic ingredients. "He was very eager and it was very natural to him. He has always been extraordinary in terms of his attitude and his natural ability to serve clients. As time went on, he naturally excelled not just in serving clients but in his ability to lead others. He was a very good teacher, a good coach."
The expert says: Lisa Abendroth, assistant professor of marketing at the University of St. Thomas Opus College of Business, said bringing in new customers during a recession is an interesting question facing a premium salon like Juut.
Coupons and promotions of the sort Juut is using help while consumers are looking to save money, but the company might be missing an opportunity to tie the offers more closely to Wagner's "daymaker" philosophy.
"When there's a recession, people look for ways to cheer themselves up," Abendroth said.
Juut and other premium brands, however, also need to avoid discounting too frequently to avoid diminishing their brand value. "Whenever a consumer expects a discount, then they only buy on discount," Abendroth said, citing the proliferation of coupons from such retailers as Macy's.
David Alexander, also an assistant professor of marketing at the Opus College of Business, said Juut is on track with its express services and recommended advertising those prominently. He also said Juut should not overlook existing customers and might try using complimentary or reduced-price offers on express services to give them an incentive to return more often.