I used to pay Rs.100 earlier for my haircut…This had jumped to Rs.1,500 for a Royal haircut (2015 price). I had a conversation with Shoaib to understand (why and) how he made the switch and what was happening here at this salon…Needless to say, I was very happy to see Shoaib progress in his career. He spoke about the training he underwent. What I experienced there that day was excellence in action…The client experience was simply too good…The process was impeccable…The quality of their propreitary products and services was outstanding…The best part – I was happy to pay the 15X price for this experience… and it was not just me, there are many others who value this experience (as well as quality) and like to pay for it…

Now let’s dig into their business model in a basic way….

This salon was for men only. Many salons where the prices are high typically have more women stylists. Here all the stylists were male…They hired people from local barbershops where the barbers were paid Rs.7000-14000 as salary and the rest through tips…But you can imagine the tips paid at places where the haircuts are priced at Rs.100-150. They hired the best guys from older established barbershops and salons…doubled their salaries…gave them training (including English) …made them wear nice attires and gave them other benefits (including infrastructure)…The tips on haircuts and other services were now at least Rs.100-200…Not just this, but these barbers were now also selling Truefitt & Hill products. The incomes of many of these barbers tripled in many cases.

Truefitt & Hill had essentially nailed  their Ideal Client Profile…typically, men over 40, residing in specific locales, who value and are willing to pay for premium-quality products and services. They had defined a clear Value Proposition. They had crafted a world class client experience…They had invested in infrastructure and their products…They were clear about what kind of team members they needed (the best barbers from local shops). They were clear about their pricing (charge premium prices) They had a process for recruiting more barbers and training them quickly (which also included shadowing existing barbers). They even had a clear career path for barbers (Shoaib now travels around India training other barbers). In essence, they constructed a profitable and sustainable business model with a steadfast commitment to serving their ideal client demographic and upholding their promise of exceptional value.

What about firms in our industry? We serve anyone and everyone who walks through the door…We cater to HNIs, affluents, and retail – everyone in the same firm…We have the same process and client experience for every type of client…Mostly we conduct our first meetings in the same way for everyone regardless of their situation…

There is nothing wrong in running a retail business… In fact it can be a great one if you have managed to crack the right business model and structure…But you can’t run a retail operation with only one person (chief everything officer) and a couple of people here and there…You have to understand the distinction between serving retail clients and HNI clients. To serve retail clients effectively—considering the vast number of clients required—you need a larger, well-coordinated team. This entails a precise articulation of your value proposition, the design of a service model tailored to a high volume of clients, and the crafting of a distinct client experience. It’s essential to understand the type of employees you need, along with what constitutes fair compensation for their roles. Constructing a retail business involves numerous considerations.

In contrast, a business that serves affluent families and high-net-worth individuals operates on a different plane. While the core value proposition might remain consistent, the service model and client experience should be distinctly tailored. The caliber of talent, the kind of client, the average client account size, and the number of clients needed—all differ significantly. Therefore, almost all aspects of the business model require customization to cater to this distinct client segment effectively.

In our industry, the lesson from Truefitt & Hill is profound and clear. Firms that excel are those that understand the importance of defining their target audience, their ‘Ideal Client Profile.‘ Just as Truefitt & Hill caters to a specific demographic with tailored services, we must also identify our niche—be it high-net-worth individuals, young professionals beginning to invest, women investors, or retirees managing their wealth.

Imagine just serving divorced women as a segment…Many will just shudder at this very thought of excluding everyone else…But how many clients do you really need?

The clarity in who you serve allows you firms to craft bespoke experiences that will resonate deeply with your clients’ needs and expectations. It’s about specialization, providing a level of service that justifies premium pricing because of the perceived and realized value it delivers.

This approach also enables you to streamline your processes, enhance your team’s skills through targeted training, and create an environment where excellence is the norm.

Moreover, by focusing on a particular segment, you can refine your marketing strategies, and become thought leaders in your chosen niche. This focus can lead to deeper client relationships, as you become intimately familiar with the specific challenges and opportunities your clients face.

The takeaway for those in our space is that success often lies in differentiation and the relentless pursuit of excellence. By learning from the precision and client-focused approach of Truefitt & Hill, we can elevate our practice, build a more sustainable business model, and ultimately, ensure our services are not just utilized but valued and sought after.

Ultimately, it’s not about serving everyone; it’s about serving the right ones exceptionally well. Just as a client walks out of Truefitt & Hill feeling not only well-groomed but also well-cared-for, so should clients of your firm feel well-taken care of and confident in their financial future. It’s about creating an experience that clients are willing to pay for, one that they’ll return to and recommend to others. In this way, you can carve out a reputation for excellence, just as Truefitt & Hill has done in the world of luxury barbering.