Why you should consider a salon loyalty programme
With the hair and beauty industry traditionally quieter over the January summer holidays, it’s the perfect time to revisit your business strategy. Did you know that it is five times more expensive to win a new client than retain an existing one? Add to that, returning clients spend 67 percent more than new customers.
If retaining and engaging your existing clients is your primary goal for 2023, loyalty programmes are a proven solution for nurturing a repeat customer base.
Rewarding your clients with compelling discounts, gift with purchase rewards, and other perks is a great way to stand out from competitors, encourage higher frequency appointments, and more spend on retail products. Moreover, happy clients are organic brand ambassadors, helping you gain new clients through word-of-mouth marketing.
Building a salon loyalty programme
Below is a step-by-step guide to designing and running an effective loyalty programme that will ultimately boost your salon’s revenue and client retention.
Know your customers
In addition to details like age and gender, collect valuable insights like customer preferences and spending habits. You can utilise this data to ascertain what incentives will resonate best with your clients.
- Discounts or money-back offers
- Complimentary add-on products or services
- Priority bookings
- Donations in their name to charities
Set clear objectives
Before designing a loyalty programme, you need to clearly define what you want to achieve out of it. Is your end-goal simply happy customers and trust? If so, your target might be at least ten positive reviews every month. Having a clear objective in mind will help you determine what value you need to provide through the rewards and how.
- Trying to increase the frequency of their visits? Set a target of each customer visiting the salon at least five times within a period of five months.
- Trying to increase the amount they spend during each visit to your salon? In this case, you can set a target of getting each customer to spend at least a certain amount every visit.
- Aiming to increase the number of new customers every month? Set a target of gaining at least ten new customers through referrals every month.
Choose your loyalty programme type
A carefully structured salon rewards programme is vital. Below are a few types to consider, depending on your targets and the feasibility of offering them.
- Point-based loyalty programme: This is one of the most popular salon loyalty programmes. They’re the simplest because points are easy to earn and easy to redeem. Every time a customer makes a transaction, they get a certain amount of points depending on their spending. These points are translated into some reward and customers get to redeem their reward once they’ve collected a certain amount of points. Then they start over from zero points again.
- Punch card loyalty programme: This is another simple rewards system. You can hand out a salon loyalty card to your customers and then for every purchase made, salon staff can punch a hole through its surface. When all the punches are filled, you can reward the customer with a targeted gift or discount. One major drawback of this system is that customers might often forget to carry their punch cards whenever they visit the salon for an appointment.
- Tiered loyalty programme: In such tiered systems, customers are presented with small rewards as base offerings for being members of the programme. It encourages repeat customers by increasing the value of the rewards as they climb the loyalty ladder. A loyalty programme based on tiers is synonymous with status and will generate long-term investment in addition to preventing top-spending customers from churning. A successful example of this is the Mecca Beauty Loop.
- Paid loyalty programme: These are VIP programmes and paid salon membership programmes. You can hand out your salon membership card and offer exclusive rewards, special perks, and unique opportunities in return for a nominal one-time (or monthly/ annual) fee. You can even come up with enticing rewards like out-of-store service, house calls, etc. only for your VIP customers.
- Coalition loyalty programme: You can also enter into strategic partnerships to offer your clients a wider range of rewards. The best option would be to partner with businesses that offer services that you don’t provide yet intrinsically linked to the salon services or businesses with a shared demographic of customers. For example, skin clinics, beauty spas, or yoga and fitness studios.
Useful tips and information
- Always ensure that you stand to collect a healthy Return on Investment (ROI) on the loyalty programme.
- Most businesses spend less than five percent of their annual budgets on their customer rewards programmes.
- You can reward customers with services they’ve never tried before to introduce them to something new, and if they like the new service, they might pay for it in the future, like an Olaplex treatment.
- Gift certificates for special occasions are also popular rewards that make customers feel valued.
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