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Business Case | Referral Marketing for a Manicurist

Updated: Mar 19, 2022

As part of Girls Education Nation's Entrepreneurial Development program, we partner with local women entrepreneurs to provide consulting and support in growing and developing their business venture. We are excited to share a business case started and completed in late 2021, during which we provided support for a single Mother working as a Manicurist in a small village outside of Minusinsk.


About the Small Business and Entrepreneur

Tanya[1] is a master manicurist. Her primary place of work is in a home office, where she has set up a professional manicure workstation. Her customer base is entirely made up of friends and direct referrals. As a home-based manicurist, her customer base travels to her for services. Her office is located in a small village close to the city of Minusinsk.


The average monthly revenue of her small business is about 35,000 rubles[2] - 10,000 rubles more than the average wage in the region. Tanya’s family monthly expenses are approximately 20,000 rubles (these include credit payments, utilities, rent, and the purchase of work materials). The remaining 15,000 rubles are spent on food items, cleaning supplies, and other household expenses.


Tanya is a single mother of two children.


The Challenge

  1. Expand the customer base

  2. Increase monthly revenues

  3. Establish a longer customer lifetime value

Analysis and Exploration

Tanya has been a professional manicurist for more than 5 years. Without a doubt, she is a Master Manicurist. Over the years, she has expanded her product and design offerings, allowing her customers to choose from a wide variety of materials, colors, and designs. Tanya also uses professional equipment, guaranteeing her customers a careful and sanitary manicure experience. Thanks to her venture, Tanya has the ability to feed herself and her two children. They live in a single-family residence and maintain a garden used for subsistence farming.


Local Market Trends

The Minusinsk region has long suffered from a poor ecology. Located at the south of Siberia, the residents of this region have very few opportunities to expand their cultural and personal preferences beyond the traditional mundane tasks. In order to bring color to their lives, many residents have begun planting and cultivating flowers during the summer months, and decorating their houses with festive décor during the winter. Consumers are also doing more to invest in themselves and their physical appearance. Because of this, manicurists are in high demand in the city. More and more, there are advertisements for individuals who are calling themselves manicurists and taking customers.


Unfortunately, not all of these individuals have completed the necessary training to be a professional. In Minusinsk, there are approximately 10 salons where consumers can get a manicure, and even among those there are plenty of negative reviews. Consumers often go from Manicurist to Manicurist, looking for a professional they can trust and turn to for more regular appointments.


Strategy Development

In developing a plan for Tanya to be able to increase her client base, Girls Education Nation consulted with Tanya, conducted client interviews, and established the following suggestions for growing this business.

  1. Our primary focus was on the development of Tanya’s city business, rather than the village of her primary residence. Tanya rented a studio space for 5,500 RUB a month, working in the space on Tuesdays and Thursdays from 8 AM to 6 PM. Utilizing her time in the city, we were able to focus our marketing and advertising efforts toward the higher-income residents of Minusinsk.

  2. In collaboration with Tanya, GEN developed a social media marketing strategy targeting the residents of Minusinsk.

  3. GEN contributed a grant in the amount of 15,000 RUB to the development of a marketing strategy we called “Meet the Master”. The goal of the promotion was to encourage existing clients to invite their friends and family to purchase Tany’s services. All new clients received a discount of 50%, with the discounted amount covered by GEN’s small business grant. Out of her own budget, Tanya provided her existing clients with a one-time discount of 20% for every new client they referred.

Results

Within three months (from September 22 to December 12), Tanya’s small business saw the following results from the collaboration with GEN:


Thanks to the “Meet the Master” marketing strategy, 24 brand new clients purchased services from Tanya. Nine clients have become repeat customers, a 37.5% retention rate. All 24 individuals purchased services from Tanya at least twice, showing a total return of 100% on GEN’s investment.

  • Repeat customers in Tanya’s business sector signifies clients who utilize the services of a manicurist at least once a month over a three month period. Over these months, Tanya has seen a net new revenue flow of over 30,000 rubles.

The nine additional monthly clients help Tanya earn an additional 10,5000 rubles a month. Excluding the variable costs associated with these customers (over three months - 25,000 rubles), the gross revenue generated by Tanya was 28,500.


GEN’s grant helped Tanya increase her gross monthly profits from 15,000 rubles to 25,500 rubles, an increase of 70%. With this additional income, Tanya is able to invest in higher quality food, academic technology for her children, and start a savings for future business expenses.

Final Recommendations and Next Steps

As Tanya continues her business, GEN recommended the following steps to continue her business growth.

  1. Interview existing customers in more depth and identify the factors that entice them to choose Tanya as their preferred Manicurist

  2. Repeat the “Meet the Master” Marketing Strategy more consistently (every 6 months)

  3. Implement and host monthly discounts and raffles to encourage new customers to sign up

  4. Develop a system of bonuses and discounts for existing and recurring customers

  5. Develop a permanent referral program


[1] Tanya’s name was changed for privacy reasons.
[2] At the time of the business case, the Russian ruble traded at approximately 70 RUB to the US dollar - the total value of GEN's grant was approximately $215.

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