Here’s a startling fact: the retention rate of new clients in the North American salon and spa industry is only 23%.
Every salon out there says that they need more clients. However the reality is that if we became better at keeping the clients we do have, we would not need to rely on always attracting new ones. Beyond that, what’s the point of spending time, money and energy to attract new clients if we don’t have a strong strategy in place to keep them??
Let’s start with some basics: Selling to your existing clients is a heck of a lot easier than attracting new ones. In fact, research shows that the probability of selling to an existing client is 60-70%, while the probability of selling to a new prospect is only 5-20%. On top of that, existing clients are 50% more likely to try new products and spend 31% more compared to new clients. One of the best strategies out there to increase your client retention is to reward them through a loyalty program.
Loyalty programs are standard in almost every industry today: grocery stores, drug stores, restaurants, clothing stores, gas stations...the list goes on and on. There’s a reason why all these industries have embraced loyalty programs – because it keeps clients coming back and increases sales, plain and simple. It’s about time that the salon and spa industry joins the loyalty bandwagon and we’re going to show you why a salon loyalty program or spa loyalty program is one of the best decisions you can make for your business.
Here are some of the key benefits of having your own personalized salon or spa loyalty program:
1. Collect valuable client data
Data is crucial to growing your business. Knowing key information about your clients and how they behave allows you to better appeal to them. The best salon or spa loyalty program will allow you to collect such information. Consumers are willing to share data in order to receive better service, which a great loyalty program allows you to do. The gathered data (such as email address, phone number, how much they spend, the rewards they use) will allow you to create targeted promotions and special offers to specific groups of clients. You can even collect their birth date to automatically send an appreciative birthday wish on their special day!
2. Enhance your client’s experience
According to Forbes, 79% of customers would take their business to a competitor within a week of experiencing poor customer service. So how can you increase the likelihood of a good experience with your business? The answer: make customers feel like the money they spent was worth it. A loyalty program is the perfect way to do this, because you are providing additional value for the money they spend with you.
If a client can get something extra for their money, besides the product they purchased, they will experience the “wow factor”. According to persuasion expert Robert Cialdini, this positive experience also creates a desire to return the favor due to the power of reciprocity. In other words, “if a customer receives positive treatment -- like a loyalty program -- they will be more likely to ‘return the favor’ in the form of more visits, purchases or referrals”, Smart Insights says.
3. Maximize brand advocacy
Do you know about the 80% - 20% rule? 80% of your total revenue comes from the top 20% of your customers. The best salon or spa loyalty program can deepen the engagement of this top 20% and make them feel more appreciated by your salon. The more they engage with your business, the more likely they are to promote your brand to others! In fact, engaged clients are 2 to 3 times more effective in persuading others to purchase from you.
Beware of loyalty programs that don’t engage your clients. If clients don’t have a way to see the points they are earning and the rewards they can choose, then your clients won’t feel likes there’s extra value. So that extra client experience as described in point #2 will be lost, as will their engagement and desire to speak positively about your company. You don’t have client loyalty unless you have client engagement.
4. Build your online reputation
Word of Mouth Marketing is the most powerful form of advertising a business can have, as each happy customer can influence dozens of new ones. So yes, even though we started this article by talking about the importance of focusing on your existing clients, the reality is that by doing so through a powerful loyalty program, you can increase positive word of mouth and gain new clients too (without spending extra money!).
There are two ways to do this with your loyalty program: reward your customers for leaving a review (with extra points) or ask your customers to leave a review right after they have redeemed for a reward. You want to ask your clients to write a review right after they’ve had the most positive experience with your business. And when is that perfect moment? When customers have just redeemed their loyalty points for a free reward! If you ask customers for a review at this positive point in time, there will be a higher chance that it will be a great review.
Remember this: a loyalty program is not just about giving your clients rewards. The best salon or spa loyalty program will not only get you valuable client data, but will enhance your client’s experience, leading them to be more engaged to spread more positive word of mouth about your business, all of which will strengthen your reputation.
Don’t wait any longer. Consumers almost expect loyalty programs in today’s world and this can become a great way for you to differentiate yourself from other salons or spas. We have developed one of the best salon or spa loyalty programs possible that is both simple and affordable. It allows you to grow your business with your own personalized loyalty program for your clients with no special hardware or software needs. No cards or papers, everything is driven digitally through the client’s mobile phone or a tablet in your salon. Check out details here and reach out to us for a free demo!
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