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48
Published on
June 23, 2020

048 | Scaling Direct to Consumer in the Beauty Industry with Graham Jones, CEO of eSalon

Summary

eSalon carved out its own marketplace - creating a direct-to-consumer hair color solution that is a hybrid of salon-quality results through at-home color application. And in the wake of COVID-19 lockdowns, the home hair color industry experienced a drastic boost in sales as a result of salons being temporarily closed. eSalon CEO Graham Jones recently sat down with Chris Snyder to discuss how the company built custom technology to scale direct-to-consumer and solve a previously untouched problem in the beauty industry.

Highlights

  • How eSalon created a new market for at-home hair color
  • Creating salon-level results with at-home hair color products
  • How COVID-19 shutdowns impacted the at-home hair color market
  • The technology behind eSalon's proprietary color combination tools
  • How brand advertising budgets have been impacted on paid media channels
  • Inside the eSalon operations and distribution process
  • Running an e-commerce CPG business without SKUs
  • How eSalon is helping out-of-work hair stylists during COVID-19 shutdowns

Mentioned Resources

Episode Sponsors

This episode is sponsored by Juhll. They are a full service digital marketing consultancy that has over 20 years of experience helping your business grow sales online. They've helped most of their clients grow more than 50% year over year by helping them meet their digital marketing goals.

Juhll Digital Agency works with companies who are doing $50 million in top line revenue that have a marketing budget of $2 million. They build your company from the ground up and they also help you in creating a strategy that will work best for your team.

You can email Chris Snyder, President of Juhll Digital Agency, at chris@juhll.com, or contact their team today and find out which of their services will work best for your success story.

Tweetable Quotes

Graham Jones

CEO, eSalon

Graham Jones is the CEO of eSalon, a tech-meets-beauty brand that revolutionized the at-home hair color industry with the introduction of direct-to-consumer salon-grade hair products.

Episode Transcript

Chris Snyder [00:00:43] Welcome everyone - Chris Snyder here, host of the Snyder Showdown, president at Juhll Agency, and founder of fintech startup Banks.com. On this show, we take a no B.S. approach to business success and failure as told through the stories of the top executives and entrepreneurs who have lived them. Just a quick message from our sponsor. Juhll is a full-service digital consultancy, and we focus on helping executives solve their toughest digital growth problems while working as an extension of the executive team. We quickly identify the biggest problems impeding growth. We propose solutions that give you the best opportunity for success. Finally, the work has to get done. So we bring a private marketplace, a vetted world-class talent to execute your plan. Of course, we help manage the whole process. To learn more, go to Juhll dot com. Or you can email me directly. It's Chris@juhll.com. OK, without further ado, my guest today is Graham Jones. He is the CEO of tech-meets-beauty brand eSalon. eSalon revolutionized home hair color in 2010 after developing the first-ever salon-grade at home. Hair color option on the market proving to be a recession-proof brand. East Lawn has experienced tremendous growth in the wake of COVID-19 while finding new ways to give back to hair care professionals who were impacted by the shutdown of non-essential businesses. Welcome, Graham.


Graham Jones [00:02:16] How's it going?


Chris Snyder [00:02:18] I'm great. Thanks for being on the show today. Graham, I usually kick this off by having folks tell us a little bit about themselves. Can you tell us about your upbringing, where you grew up, and how you got to where you are today?


Graham Jones [00:02:28] Yeah, absolutely. I grew up in Southern California, went away to college in Washington, D.C. and I was going down a very just traditional path, studying accounting and finance. I had a choice whether to stay in Washington, D.C. after graduation and do accounting for in the nonprofit sector or come to Newport Beach and do taxes. So I ended up coming back to California after graduation and I did taxes for about a year. And I was on on on my way to becoming a CPA. And I got a call from a friend of mine that said, hey, Graham, you're no accountant. You're you know, you're a sales guy. You're gonna make. You're gonna make this thing happen with me. Why don't you come and join me? A price grabber. This would have been in that would have been in probably November or December of '99. And as soon as I said, of course, I, I took him up on his offer and I was calling on retailers to sell them cost per click advertising before Google even had the product. So at the time, I think Google was licensing the overture technology on the cost per click side. But yeah, that's how  I got my start in my career after doing accounting for one year. And, you know, I liked it enough. But the startup world now and then on the dot com side was much more exciting. And in the end, we sold that business in 2000, December of 2005 to Experian. And then I stayed another six, seven years and then left. I left a price grabber in 2013, took about six months off, and then the founder to me of Salon, he recruited me to be CEO of Salon. And I've been here for the last six and a half years. And I'll tell you, Chris, it's been a really great ride to watch this business grow. When I started and so on, we had about 40 employees and now we're up to by the end of this month, we'll be up to about two hundred and eighty.


Chris Snyder [00:04:45] Wow. That is some very serious trajectory. You know, it's funny. I don't think I've ever. So, first of all, when people say, hey, you know, a finance guy, it's like, there's those air quotes. So you're the finance guy. But one thing no one like no one ever said to me ever was, hey, let's go grab a tax and accounting guy in finance guy and make him a sit like. Who thought that was a good idea? By the way, it was a good idea, but I wouldn't in my immediate mind, go to, at this point, my career anyway. Maybe 20 years ago I would've said that to someone.


Graham Jones [00:05:20] Well, the thing is, I knew him. So I knew Tamim before. And he knew me and he knew I was in the wrong field. So he was  already ahead of the curve letting me know that that I, I had gone into the wrong area and that I actually belonged in the online space. That didn't really exist at the time. So in the end, he was right and I was wrong.


Chris Snyder [00:05:45] Well, you know what? And honestly, back in the day, the business was fundamentally a quantitative business. Even back then. Right. I mean, if you had to build price grabber, I mean, how many SKUs would there to be millions of SKUs and millions of keywords and hundreds of thousands, if not millions of dollars in ad spending? All this had to come together, right?


Graham Jones [00:06:10] Yeah. I mean, in the beginning, there was, you know, a couple, you know, maybe a million. SKUs I remember when I first started calling on retailers to list their products or give us their data feeds. They were paying all their advertising was on a cost per thousand basis. So my pitch was you only pay when people come. Was that was the beauty of costs per click? It's evolved even further now where, like when we buy advertising in IcelandeSalon, we only want to pay when people we don't care if they click, it's only whether they buy. So we're always backing into it. We call it a cost per acquisition. But back then, when I was shelling the cost per click product, I was my pitch was you're only paying for users that come and now it's 2002, 2001 time frame. Yeah.


Chris Snyder [00:06:57] And that's a little bit of the Google, Yahoo model. Right. And it would be it sure would be interesting, Graham, if Google would start charging its customers on a CPA instead of a CPC.


Graham Jones [00:07:08] Right. Some of that, believe it or not, some of their display advertising, they allow. To do some of that, so they're getting there. I mean, Facebook optimizes to a cost per acquisition. I mean, at the end of the day, you're paying on a CPM, but they know what your CPA target is. So they're trying to help you meet that CPA.


Chris Snyder [00:07:32] Yeah. I mean, I feel like Google and Facebook at this point. If you don't have their ad tech installed and you don't have your site speed scores in the right spot and you don't have your own tech in the right spot, you're going to get penalized. They're just not going to want to work with you.


Graham Jones [00:07:48] Right? That's right. I mean, they look at that. They want high can. They want the traffic you send to be high-converting. And they really reward you if you have high converting traffic. And if they see that your conversion rate improves, they will they'll give you a bonus on the algorithm. In the algorithm.


Chris Snyder [00:08:08] Yeah, no, it's great. It's great that they're innovating that way. I don't know how their business you know, it's interesting. I've been looking at you know, I read an article the other day about how a lot of the brand budget had been, you know, hit pretty hard for larger platforms, whether it be Snap or Google or Facebook. And the interesting part about that is guys like us who understand performance marketing, that budget actually has been stable for those guys. And I think they lost a lot of their brand budgets during the COVID crisis. Not sure if they came back, but I think this might drive some more accountability with traditional brand advertisers, too. Do you have any thoughts or comments on that?


Graham Jones [00:08:56] Yeah, I mean, we started so we really started taking off in the middle of March. And we know why. As what you just said, the brand advertisers started coming out. I mean, I know Air BMB was supposed to spend like a billion dollars this year. They pulled their spend completely. Automotive industry, huge advertiser, restaurant,  hospitality. They all pulled their advertising for the year. They're kind of we'll call it hunkering down. Yeah. And that's given the funding. We've never been a brand advertiser. We've always been a performance marketer. So I guess in some ways we were always buying remnant inventory when the brand advertisers were not buying it. So then all of a sudden you have lots and lots of remnant inventory because of the void that happened when all the brand advertisers left. We continue to get very qualified traffic from the online marketplaces as a result of just less advertisers. And believe it or not, more volume. I mean, more people are online right now. They're not out doing things. So you have less advertisers and more inventory, which effectively brings prices down. Yeah.


Chris Snyder [00:10:11] You say the discount is right now for you guys, 20 or 30 percent on this on very similar or now you've probably even had better, more qualified traffic than you had before.


Graham Jones [00:10:21] I would say in the month of March and early April, it was a greater than a 50 percent discount. And there's definitely no recovery, but more direct response advertisers are jumping in. So I would say the pricing is going up a little bit, but we're probably now in the 30 to 40 percent, 30 to 40 percent discount rate.


Chris Snyder [00:10:45] That's great. Now, one of the things that I've heard a lot of the talking heads say is, look, this has been coming for a long time. And when I say this, I mean transformation to digital. More people getting online and others while they sit at home, probably doing things differently than they had before, i.e., will haircare products, maybe in general. Let's talk about the market a little bit and the problem that you guys solved. So if you want to talk about the problem that eSalon solves real quick and then let's talk about the market as a whole. Sure. Maybe you can describe for me what this pandemic has done, like increasing the awareness around the problem that you solve, and then how is this going to change haircare forever? It might not, but maybe.


Graham Jones [00:11:30] Yeah. No, I think that's a great question. So eSalon fits right in between the two consumer options. So before eSalon came along, you had two choices. You had the box. You could go to the grocery store, the drugstore, and you could pick your shade and you could try to apply the hair color at home with really no help. Cheap and it's convenient. You can instant gratification or the more expensive and time-consuming approach. You could go to the salon. We want we fit right in between. We wanted to offer Salon great. We offer. But when we started, we wanted to offer salon-quality hair color that you could get quickly that you could do in your home and most. Certainly, we wanted to help the consumer apply the color at home. So, typical experience or experience for a consumer. Come to our website, answer the same questions that you would answer with your colorists sitting in the salon chair. You upload a photo, are colorist team, which is now over 100 hundred. Looks at all of the orders that come through as they look at the answer to your questions that you just uploaded. They look at your picture. They make sure that we're formulating the right shade. We then print instructions on-demand with your order that tell you exactly how to apply the color, as if it's almost as if you were a colorist in the salon. And we ship it to you if you need help. You have the support you can reach out.  I am now I am now gaited. We should say I we are now getting 3x the number of inbound calls from our clients than we did in January. So the amount of the way I like to look at the business is that we're somewhat in the education business. We are empowering. We are teaching our clients how to color their hair at home and do it the way the colorist would do in the salon.


Chris Snyder [00:13:28] That's. This is one of those times when you say, why didn't I think of that? I mean, I know you guys have made a very serious investment in people, because what it sounds like is you said, hey, if we're gonna do not box stuff off the shelf, which is going to turn granny into purple. Right. Right. And we're going to make sure that we save money, but still provide at least the same similar quality. You guys had to go out and hire hairstylists or colorists or, you know, I don't know what you call them - coloring artists.


Graham Jones [00:14:05] We hire licensed colorist. So we take a lot of colors that maybe don't want to stand all day or they want their Saturday nights back and we put them to work where they can. They can look at a computer and do what they were doing before, but not actually using their hands. They can help clients answer questions, try to get clients to the outcome, color outcome that they want. I think the other point that I miss, Chris, is that when you let's say you want to go a quarter shade lighter or a quarter shade darker weave off, we've blended over 200000 unique shades. So it's not like we're just we're not just blending, you know, medium brown. And we are iterating there's a there is a journey with our clients. So the client comes to us and they like their color, but they wanted to be a quarter shade lighter or a quarter shade darker or they want to cool it down. So it looks maybe a little bit too warm if they communicate with us, which they do. We can fix their next order or adjust it so that the next order, it's a little bit cooler. It's a little bit warmer. And they go along this journey and after two or three orders and we get there, you need shade, right? They're never going to change their formulation.


Chris Snyder [00:15:21] So you say today you have someone who's a professional human being, not A.I., although maybe you can go there. You have a human being looking at a photograph as if a hairstylist was standing next to them or a hair colorist was standing next to them. You provide them all these options and all these choices. Do you superimpose this on on their own face as well? Or so they can see their hair the way it looks with the new color?


Graham Jones [00:15:54] We don't we don't do that, Chris. Primarily, what we're trying to do is have them upload a photo with the outcome that they want. No, we're not offering I guess it would be AI. What we do is we answer the court. We look at the answers to the questions and if there's no photo or comment. So at the end of the questionnaire, the consumer can add any you know, my hair is brassie generally. Can you adjust for it? If there's no free form text at the end of the questionnaire, then the algorithm will formulate for them. So in that regard, it is AI if there's no picture or no special tax, but if there is a picture, a special text, a professional license colorist will review the order.


Chris Snyder [00:16:42] Yeah. And that's I mean, this computer is seen as a couple hundred thousand times, it seems like the different combinations that you discussed. So you've provided the application online and that allows for a seamless, mostly frictionless process to get this done. You have humans. Look at it. Let's talk about the production process, because in my mind, by the way, full disclosure, I don't color my hair. So just full disclosure. But I do remember as a kid going into CBS or going into Walgreens or going into these places and there would be aisles of boxes. How do you do this on the back end? Is it machinery like you have some proprietary machines that you've built that mixes this on the fly and delivers it within a few days? How does that work?


Graham Jones [00:17:34] So in the way our production line is set up is that we have third on the permanent hair dye side. And remember, press most of our clients. So our target consumer is a woman that's 35+ going gray. So she's trying to cover her gray hair and every year that goes by, she becomes more gray, obviously, and we're trying to help her along that journey. We have 13 different ingredients and we are blending based on the way she answers the questions. We are blending the colors to meet that very specific color outcome. So are our intellectual property or our differentiation in the business is our ability to take those answers and to give the 2oz. bottle of hair color. And then you have developer. We're putting in 30% of medium brown, maybe 70% of mahogany. And maybe 1% of ash to cool it down. So we are we have all those combinations and our ability to answer, to take the answers to the questionnaire, and to get that color outcome in the 2oz bottle. That's our secret sauce. I mean, that's really what we're offering. We, you know, the box hair color in the grocery store. Go back to your original question. And I have like 20, 30 shades at most. I mean, they're not you're fitting into nothing custom about it. I mean, so on is truly custom. We're not putting you into a mold.


Chris Snyder [00:19:07] Got it. So tough question. I mean, I would not want to mess up a 35-year-old woman's hair with hair color that you ordered online. Does that happen? I mean, that must happen. How does that happen? Like, how do you fix that rectified? I'm sure you've had this question a million times here.


Graham Jones [00:19:32] So I'll tell you how it goes wrong. And I think it's interesting. So our instructions, if you follow them, you're not going to mess up the application. The problem is that a lot of clients have used box hair color from the store and they're used to just applying it all over. Whereas for us, you may have two bottles. So the first bottles from your roots and your roots is just the regrowth. So you're only applying the color on the gray that's coming through. And then you the second bottle you're using for your ends and your ends are the part of your hair that's already been color. It's simple. I mean, as of step one, step two, step three. But a lot of clients have a preconceived notion on how to do it. And if they just ignore the instructions, which a percentage of consumers do, then the outcome is not going to be what they want. And that's communication is is an area where we've improved over the years. And, you know, we send e-mails, we send we give them instructions, we call things out to really draw attention to those instructions, but they don't follow them. You can get a bad outcome.


Chris Snyder [00:20:43] Yeah, it seems like it's very simple. The process is frictionless. It seems like a very simple process. So let's talk about the market a little bit. How big is this market? And I don't know if you lump it into a few different markets, but it just seems like, OK, everybody needs their hair colored by a certain age and a certain point. This must be a massive market.


Graham Jones [00:21:09] So in the U.S. It's about two billion. And that's the at-home market. So that doesn't include anything with the salon. Yes. Two billion. And then I would say in the E.U., which the E.U. is a big international expansion. We opened a production facility. We're blending in London. So that was my that was one of my that was my big initiative in twenty nineteen. Was opening that facility and active in West London. The EU is about a billion two. I believe it's about two billion dollars for at home. At home, HAIRCUT'S is about the same size as the US. Across all.


Chris Snyder [00:21:45] So a couple of billion bucks. And do you have an average of cost savings maybe that you... I mean, I feel like in L.A. anyway, you're probably paying one hundred and fifty bucks to get a color - assuming these people are going every four weeks, six weeks or in that range.


Graham Jones [00:22:05] Yes. So it depends. I mean, in our questionnaire, it's three it's as often as frequent as three weeks and then up to twelve weeks. So obviously, the older you get, the shorter the frequency. Yeah. I mean, typical costs in the salon in the L.A. area could be a couple of hundred dollars. I know. Maybe in some of the suburbs in Southern California, maybe 50, 60 dollars. What our price is twenty dollars. Twenty-two dollars. So if you use box hair color, I mean you can get it really cheap, four to three dollars in Wal-Mart. But I would say an average is about ten dollars. So the boxed hair color user is trading up and paying double, but on absolute terms, only an extra ten dollars to get custom color. We think it's a great deal. We think it's great for salon goers because they're saving a lot of money. They're saving a lot of time. I mean, you put color in your hair and you can walk around. I mean, you have to let it process. I didn't say this earlier, but in the end, the instructions a big variable is processing time. So the longer you let it process, it's a factor in your outcome. So while it's processing, you can walk. You can walk around and do things. So salon goers are saving time and money.


Chris Snyder [00:23:21] So you're saving it feels like between 80 and 90 percent of what you would at a salon while doing it in the convenience of your home.


Graham Jones [00:23:28] Right. Absolutely. And help. You can get help from a colorist. We're open Monday through Saturday. Available in the US and the UK. So the support line is there.


Chris Snyder [00:23:41] So can you call these guys on your phone and you get help from. And this is for the same twenty-two bucks?


Graham Jones [00:23:48] Yeah.


Chris Snyder [00:23:49] That's amazing. So which kind of brings me to another point. I've seen a trend and I read a Web site the other day or a note from an e-commerce guru that said the number one selling item online in March, I believe was or maybe it was April, but it was bread makers. And so I was kind of thinking to myself. It's taking me back to the 70s, 80s, and 90s or during a time when I think we all just kind of did things on our own. We didn't push a button and want something immediately. So given this crisis, do you feel like this is going to translate into a whole new section of consumers that have been kind of forced to give this a try, like making bread, if you will, and now you've got them? Because it's sort of - they have a good experience. I don't know why they go back to the salon if they get the same result. What's the point?


Graham Jones [00:24:47] Yeah. No. So I think I think you're on the right path. I don't think that the salon market is going away. I think many clients that have learned to use eSalon that they will stay and they won't go back to the salon. But I mean, it's nice to go to the salon. I think it's nice to get your hair done. You're still going to do. A lot of women still need to get their hair cut. So they'll probably add their color. But a lot of these folks that, like you said, were forced into this do it yourself category. They're not going to go back to the salon as much. They may go back twice a year to three times a year and use East Lawn in between, because once we've taught them how to do it. Can't unring the bell. I mean, they've learned how to do it. And they will say, I think salons will do fine in the long run. They will innovate and figure out how to bring clients back into the salon. So the colorist community is one in which we don't wanna be at odds with the colors community we want. We want salons to survive, but we want to be an option for consumers if they don't want to visit the salon every time.


Chris Snyder [00:25:55] Well, you know, you made an interesting point. There are, I think, some really high-quality products out there in some really high-quality companies that create these colors and then they distribute them through the salons. Do you guys create your own product or do you license those products and co-brand them and say, hey, look, you're getting the I mean, who knows? I don't know anything about Paul Mitchell or Redken or. I don't know. But it would seem to me that if people felt like they were getting the same quality product with the same quality, you know. You know, colorists this would be a no brainer from a branding standpoint.


Graham Jones [00:26:35] Yeah. I mean, typically, we don't do co-branding deals because the formulation process is so important in our color lab is here. And if clients want to I mean, on order one, you could potentially license your technology to a salon and allow consumers to use our hair color line. But what about when they want to tweak their shade on the second and third order? So licensing and co-branding hasn't been part of our strategy on that. I think what you're referring to is the fashion shade. So we don't our client, we're trying to get our client to her natural shade. We're not trying to do any of these vibrant colors that you see out there, which is an interesting space. I think it's really interesting. But those products are more built for, I would say, younger demographic. And we're trying to help women 35+.


Chris Snyder [00:27:31] No, that's a great point. That's a great point. And so you guys actually own the supply chain from front to back. You don't have to rely on people to make equipment. You guys have proprietary technology as well that mixes all this stuff, right?


Graham Jones [00:27:49] That's right. That's right. So that I can describe the production line a little bit. So our production line, we have 13 different vats and then we have our own dispensers and the dispensers have 13 different tubes building a little nozzle. We use nitrogen, pushes the hair dye through the lines, and then there's a valve that more or less turns the hair dye on and off. So when you need and it's as accurate down to a half a gram and when there's a scale that the bottle sits on and as soon as it receives the right number of Grande's, the valve turns off that color and then moves on to the next shade. So our production line can do about eight hundred bottles per hour. Wow. Eight hundred bottles brown. It's totally automated and the reason that we've been able to stay strong and stay in stock. We never went out of stock is because we manufacturer not only do we blend the color here, but work. We are compounding our color, we're buying the raw materials and we are cooking the hair dye here. So we never really ran out. It's not like we had a supplier that was giving us the hair color and that supplier was out of stock. We're buying raw materials and we're vertically integrated and that we are cooking in here. So we never. Never had those problems and some of the other hurt online air color companies out there, they were out of stocks. I mean, they're out of stock on medium brown and some of the very common colors. And we didn't experience that problem.


Chris Snyder [00:29:21] Well, you guys are experienced entrepreneurs, I think, given the price grabber journey. And was it always your idea to kind of not hack this together and do it all yourself from the ground up, meaning we're going to make our own machines. We're not going to license other people's color. We're going to cook this in-house ourselves. We're going to hire our own colorist. We're going to this all sounds like a big investment. It takes a lot of time. Was there always division?


Graham Jones [00:29:53] So what I'd say about that is we see the value of buying software off the shelf. We see that value because you're not going to move fast enough if you're building everything from scratch. So I'll give you an example in the beginning. We looked at it for our e-commerce platform. We looked that Magento and we had that Shopify. But you know what the problem was, Chris? They were all based on a SKU. We don't have a SKU. We were building custom colors. So we had to build our own Web site, our own e-commerce platform. We had to build it all from scratch because the business that we were in, the off the shelf software didn't support it. So to answer your question, we love off the shelf software if we can make it work for what we're trying to achieve. It's just we're very we are very specific and what we want. And very often we end up building it ourselves. And that's why we are a technology company. But if we can buy it off the shelf and get it to work, but we will use it. We will use off-the-shelf software.


Chris Snyder [00:30:59] You just made a point. It's interesting. I didn't think about it this way until you just mentioned it, but clearly that's the case. You just said we are a technology company. So, you know, it's interesting to see folks like WeWork, AirBNB. I think that some of those guys, you know, WeWork especially - they're a real estate company. Right. There's been a lot of press and argument about are you a tech company or are you a commercial real estate company? And I think, you know, given what happened to those guys, I think we, you know, understand how the market's putting them in that place, though. But what is it about? I know you just described a little bit of it, but if you had to quantify how much of it is tech and how much of it is, you know, hard assets and product, it feels like you guys are leaning in hard, hard on the tech part. Is it as a percentage like you guys are? Nope. We're 80 percent a tech company in these colors and stuff or commodity. Is it how you mix them and how you provide the service with technology is the only way you can do this? How do you describe that?


Graham Jones [00:32:04] I mean, I think the backbone of the business is technology, but the tech team is not that big. I mean, if you look at the company, the vast majority of the company is colorists and production teams is producing in color. So I think it would be hard for me to sit here and say that 80 percent of the business is technology when a fraction of the headcount or a fraction of the team. But I think the core to what we do is technology. And without the technology, I would say we built all of these employees and all of these processes on top of the technology. I think that's the right way to the right way to say it. But, you know, it starts with technology, it starts with iteration, it starts from learning. I mean, I'll give you an example. So if we blend to color. So one of the things in our business, Chris, we're always looking at reorder rates. And so we look at a client, we acquire one hundred customers. How many reorders are we going to have from those hundred users after twelve months' time? And that that that would be the question. If we mix a color that falls below the average and so we mix we put three different colors together and for whatever reason, the reorder rate after twelve months is 30, 40 percent lower than than the average. We're not going to blend that color anymore because that's a bad outcome. Those clients are not reordering their hair color at the same rate as everyone else. We need to not blend those shades. And yeah, that's a technology. That's a data. That's it. That is a that's a data question. And that's acting on the data. So we have lots and lots of companies have lots of data. But can you create a culture and environment inside of your company so that you can act on the data, draw conclusions, and make changes? And I think that's a big part of our culture is taking feedback. And we get so much feedback from our clients. I mean, every consumer that we acquire, they get a feedback E-mail. We are trying to open dialog and then we're trying to change the product based on that feedback and the color example that I posed for you. That's a perfect example because we don't want to give clients colors that they don't reorder her business.


Chris Snyder [00:34:23] Were you guys deemed essential or non-essential during the shutdown?


Graham Jones [00:34:27] We were deemed essential because of our products - shampoos, conditioners, hair colors. It's part of personal care and were effectively keeping giving people products at home. And they don't have to go to the store. So, yeah. And then we're also producing chemicals, which is also deemed essential. Got it.


Chris Snyder [00:34:47] So I know there's been a little bit of press about a hair salon or someone in particular. I think it was the great state of Texas. She got in some hot water for providing that service. Are you guys partnering with hair salons or stylists or colorists in any way during this crisis? Or is there any way you see an evolution between those groups, given what you guys do and what they do?


Graham Jones [00:35:16] We have a program that we launched last week called The Color Muse Pro Program. And this allows colorists to bring they can order the color directly to themselves as a color so they can have it shipped to their client. And we will pay them we'll pay them 20 dollars. And then for every recurring order, we will pay that stylist or color is five dollars. So, for example, you have a colorist. She can't come in to come to your salon because of the pandemic. They will say, you know what? I want to help you use eSalon color. I will do a face time call with you once your color. And I will walk you through this process. The stylist may charge their client what they normally charge them. But we at each salon, when their client is buying our color, we are giving them we're basically giving them a commission so they can make money from a salon. They can make money from eSalon on their recurring orders. And they can also charge the client a consulting fee. And we've had something like I believe it's somewhere between 50 and 50 and 100. I think it's a number sixty-two. We're just looking at this earlier. Sixty-two stylists that have signed up and that are using our product.


Chris Snyder [00:36:34] Wow. That's a great idea. A great benefit for them. It's actually interesting. We talked about those other brands earlier. I think if eSalon can figure out a way to support these colorists and these stylists do a better job with the unit economics. You're probably going to get yourself a lot of B2B customers, not so much the retail side. You'll get a lot of B2Bs, right?


Graham Jones [00:36:58] Yeah, we see we see the hair color, the stylists - I think they're going to innovate. And this is an area where they can innovate. We're giving tools to innovate.


Chris Snyder [00:37:09] Super interesting. So it sounds like expansion, for now, means taking a really great product and pushing it out globally. Is there any other options for extensions on the brand from a product standpoint? Are we looking at pushing a really great product out globally?


Graham Jones [00:37:32] So we have we will be and I can't get into this here, Chris, but maybe this will be for a future podcast. We are launching two new direct to consumer brands and the personalized beauty space. And we have one launching in June. Probably mid-June next month. I can't get into details now. And we have another one in the personalized beauty space launching at the end of the year.


Chris Snyder [00:38:01] Yeah, well, given the firm's chops and direct to consumer, I know you guys built up the business from the ground up. I know Price Grabber was a DTC brand from the ground up. I'm sure you guys will make some hay in that regard. Do you feel like maybe you can answer this question now? But do you feel like there's anything for us dudes with gray stubble out there? I'm starting to start to really do a number on myself. Maybe it's the startup and entrepreneur world, but.


Graham Jones [00:38:32] I can't confirm what you're saying, but I think you're on the right path.


Chris Snyder [00:38:38] OK, good. You know, I've seen, you know, Harry's and some of these guys. I've you know, I kind of moved away from Gillette maybe a year ago now, but the affordability, the quality that everything is there and you kind of take some of these items, you do just as good. Better price point, a little bit better service. I think you're off to the races.


Graham Jones [00:39:00] Yeah. The only thing I would add there is, man, if that's the path you're going down. Men do use our products. I mean, we're estimating that just based on names. And it's not a perfect science because we don't ask the question in the questionnaire, but we're thinking three to four percent of our clients are men. But the difference between men and women is that the experiences have to be different. The questionnaire is going to be a little different because many men, don't want to get rid of their gray. They just want to use it. They just want to they want a little bit less gray. They don't want that. Look where all the gray is gone. They just don't want the gray to be as pronounced. And that that question in the questionnaire would be a little bit different. So that's giving you a little preview into what it might look like.


Chris Snyder [00:39:52] I love it. I remember I started my career young, but I do remember being really young and just wishing I had a little bit of gray hair to make me look a little smarter. And now that I have just, and it's a, I feel like - yeah I got it now. But I don't. I definitely see where this is going. And I need a good spot. Well, this is you know, I feel like we could talk about this all day long. You know, one of the things I've been asking for all of our guests to do is to help our audience with a bit of advice. The only people we have on the show are executives and entrepreneurs that get to see the big picture. They understand what's going on. They have years of experience either facing problems, dealing with progress, or dealing with anything that might come along. Given, you know, given what you've seen with the markets and given what you've seen with your business and just in general, the epidemic or pandemic, what would you say to our audience that might give them a little bit of advice on how to get through this?


Graham Jones [00:41:03] I mean, I think from a business, you got it. You have to look at it's almost like the playing field is the deck is being shuffled right now and there's new opportunities. And one of the benefits of capitalism is that it's based on needs. So I think you have to look at your consumers and try to understand your clients and try to understand how have their needs changed and how can how can we help them. And for us, in this time, we've tried to make changes. I mean, one thing we didn't talk about work was the charities. And what you saw on is done with. We've donated Monday money to the Los Angeles Regional Food Bank. We've donated to Direct Relief and Beauty United to help some of the first responders. So I think I think you have to look at what's going on outside your business and try to try to help the community, number one, and then number two - try to understand where you can help your clients in this new environment. I think those are the two areas. And I think empathy. I mean, I think you have to be empathetic and you've got it. You have to try to understand what consumers are going through and see if you can help them see that. I mean, that's really what it boils down to. You know, there's periods of time where nothing changes. And I think it makes it harder as an entrepreneur, as a leader of a company, as if the traffic acquisition markets are incredibly expensive and there's not a whole lot of change. It's harder, I think, for entrepreneurs. The opportunity is now to help people and to give clients things that they might not have known or wanted three months ago.


Chris Snyder [00:42:57] Yeah, I couldn't agree more. So I really appreciate those words of advice, everyone we had Graham Jones. He's the CEO of Tech meets Beauty Brand East Salon. They've revolutionized home hair color in 2010 after developing the first-ever salon-grade at home. Hair color option on the market. It sounds like there are big plans to do even more. We will have to have you back on the show and discuss those adjacent brands. I can't wait to hear more. But thanks a lot for your time today, Graham.


Graham Jones [00:43:29] My pleasure.


Chris Snyder [00:43:30] All right. Take care now.

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