Fact: the retention rate of new clients in our industry is only 23%. Every salon says they need more clients, however if we became better at keeping the clients we do have, we would not need to spend as much time, money and energy to attract new ones.
Loyalty programs are standard in almost every industry today: grocery stores, drug stores, restaurants, clothing stores, etc… The reason why? Because they keep clients coming back and increase sales! Research shows that the probability of selling to an existing client is 60 to 70 %, compared to only 5 to 20% for a new prospect. Existing clients spend 31% more compared to new clients.
Here are some key benefits of having a salon loyalty program:
1. Collect valuable client data
Data is crucial to growing your business. Knowing key information about your clients (such as email address, phone number, how much they spend, rewards they use) will allow you to better appeal to them by creating targeted promotions and special offers to specific groups of clients.
2. Enhance your client’s experience
You can increase the likelihood of a great client experience by making them feel like the money they spent was worth it. A loyalty program is perfect because you are providing additional value for the money they spend. According to persuasion expert Robert Cialdini, the power of reciprocity then comes into play. “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.”
3. Maximize brand advocacy
80% of your total revenue comes from the top 20% of your customers. A good salon loyalty program will deepen the engagement of this top 20% and make them feel more appreciated. The more they engage with your salon, 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.
4. Build your online reputation
Your loyalty program can allow you to reward your customers for leaving a review (with extra points). You can also ask your customers to leave a review right after they have redeemed for a reward. If you ask customers for a review after receiving something for free, there’s a higher chance that it will be a great review!
Stop waiting. Consumers expect loyalty programs in today’s world and this can become a great way to differentiate yourself from other salons. Our digital marketing partner, Salon S.O.S., has developed a great salon loyalty program that is both simple and affordable. It allows you to grow your business 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 on their website (www.salonsos.ca/loyalty) and reach out for a free demo!