How market research helped one small business double sales

3 minutes read

Dan Cavanagh

Entrepreneur Dan Cavanagh has more than doubled enrolments at DelMar College of Hair & Esthetics since he and his wife, Carla, took over the Calgary business in 2010.

Cavanagh says careful market research has allowed him to identify potential clients, evaluate demand for new courses and find opportunities.

When Cavanagh bought DelMar, the college offered only hairstylist training. He has since diversified to such areas as esthetics, makeup and nails. In response, student enrolment has increased to more than 300 students a year, from about 150.

Research market carefully

“Before starting a new course, we research the market carefully by talking to high schools, potential clients and relevant professionals,” says Cavanagh, a former commercial pilot and junior high school principal.

“For example, we telephoned doctors to determine the need for esthetician training. Similarly, we’re investigating the film industry’s needs in Alberta for a planned course in special effects makeup.”

Cavanagh has also used DelMar’s website to deepen his understanding of his clients.

“We ask visitors to our website targeted questions, conduct online surveys and assess our promotional campaigns by analyzing the traffic they generate through Google Analytics.”

Create a client ‘identikit’

Cavanagh says it’s important to clearly define your target customers to help you fine-tune your marketing strategy.

“We’ve created a composite person we call ‘Amber.’ She’s 17 years old, has just moved to the city, and lives on her own.”

Starting out, Cavanagh also relied on market research when updating DelMar’s 60-year-old corporate image.

“We approached the students themselves by showing them mock-ups of new logos and prospective corporate colours. The kids told us what they found most appealing and their participation also encouraged closer identification with the college. We found their feedback to be crucial as they are our target market.”

New business, steep learning curve

Cavanagh, a client of BDC Financing, admits he had to work hard to get up to speed on the competitive beauty industry and keep up with its trends.

“It was a steep learning curve when we started,” he says. “I knew it was a sound business but wasn’t familiar with hair or fashion. I was at the mercy of my employees. To sink my teeth in right away, I joined the largest industry association I could find—the American Association of Cosmetology Schools.”

His involvement in the association provided access to valuable contacts, online discussions and the latest information on fashion trends and beauty training.

Use social media to reach Millenials

DelMar reaches out to the student community through a dynamic Facebook page, Twitter feed and a YouTube channel—all driving traffic to its website.

“We use Google Analytics to keep a finger on the pulse of how many hits we’re getting on our site, the pages visited, at what times, by whom and where they live,” Cavanagh says. “The data helps us to tweak what we’re doing and improve continuously.”

All paid off

“It takes a major shift in thinking to move from a regular job and pay cheque to running a business. But I was finished being an employee. With BDC’s support, we’re on the way to leaving a legacy for our four daughters.”

Dan Cavanagh’s lessons learned

  • Know your target market and diversify your products to meet its needs.
  • Establish strong financial controls.
  • Network extensively and seek feedback from customers and suppliers.
  • Work to increase employee retention.
  • Strive for “5-star” customer service with every client, every day.
  • Use social media to communicate with and research your market, especially for younger clients.
  • Analyze traffic to your website and tweak your pages to improve sales.