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Intensive versus Extensive Growth – a Time for Each

Monday, June 19th, 2017

By Damien Feiklowicz, Sunless Inc.

At the dawn of sunless tanning, a spray tan was rarely a good sold by itself. Instead, a decade or so ago, when UV was the undisputed king of tanning, many market veterans recall those cold, dark, damp automated spray-tanning booths as being a necessary evil. Specifically, the necessity was born from the realization that the number of newcomers to UV tanning was not limitless, so, if a salon wanted to maintain historical growth rates, new means of revenue generation needed to be employed in the future.

Generally speaking, there are two means of producing more goods or services: adding inputs to yield more output, which is extensive growth, or extracting more output from the same number of inputs, which is intensive growth. Neither is good or bad or even preferable per se, and either can be ineffective—or harmful—if employed in the wrong circumstances.

For some historical perspective, the spray tan was initially a small portion of the tanning market and was introduced by visionaries who realized that despite its limited appeal to a broad market at that time, the immediate gratification of a topical, cosmetic bronzer sprayed on a UV tanner provided the golden tan customers sought from the underlying and slowly developing conventional tan underneath. This was the advent of the cocktail tan, the equivalent of a shot and a beer… the beer is to be savored over time while the shot is endured just to get the party started.

Or in economic development terms, the addition of a spray tan to a UV visit was a means to intensively grow revenue. And for years, that was a winning combination, especially since the quality of spray tanning equipment and solution improved in conjunction with the selling techniques of the salons, so cocktail tanning grew extensively as well.

Click here to read the entire article in the latest issue of Smart Tan Magazine online.

Click here to read more about sunless growth in the June cover feature.


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