Client loyalty is priceless!
Loyal clients are the bread and butter of your business so why not reward them for coming back. A successful loyalty program helps to increase your profits and encourages your clients to stay loyal. How so? Well, read on, because if you want to improve your client retention rate and increase profits, you’ve come to the right place.
“Businesses with loyalty programs, on average
are 81% more profitable than competitors who do not” (Bond Brand Loyalty Study, 2015).
WHAT CLIENTS THINK ABOUT LOYALTY PROGRAMS.
Hands up who doesn’t like to get free stuff? Yeh, I thought so. We all do! And, in fact, it makes us feel good and in turn, we feel good about the business providing us with that discount or gift.
“85% of customers said that loyalty programs keep them anchored to the brand” (Bond Brand Loyalty Study, 2015).
When a client receives a discount or free service, they experience that warm and fuzzy feeling. You know how that feels. Emotion is the largest driver of customer loyalty, so it is important to consider what your loyalty program will evoke that positive rush. Clients must believe there is quality to the loyalty program or you will not stand out from your competitors.
The main problem with loyalty programs from a clients perspective is impatientness. According to a study (Merkel Hello World 2019), 54% of customers said it takes too long to earn a reward. So keep in mind that if you make your clients jump through hoops to get any sort of reward, the effort of implementing a loyalty program will not give you any results. So it is very important that you consider what advantage your client will gain from participating in your loyalty program.
One way around this is to offer a 10% or $10 dollar discount (these values are just a guide) at the time of signing up. Straight away the client is rewarded and this also gives you the opportunity to explain how the loyalty program works. Remember, transparency is key. The program must be easy for the client to understand and see the value in it. An uncomplicated points system, for example, 1 point for every dollar spent, is simple and easy to understand.
There is no doubt that loyalty programs work. A whopping, “85% of those in a loyalty program feel their efforts are worth the prize” (Bond Brand Study, 2015). This is clear evidence that loyalty programs will motivate your clients to spend money to unlock benefits and feel good about doing it.
So how does implementing a loyalty program help your business? The main benefit is keeping your existing clients and preventing them from going to your competitors. Did you know that it is six times more expensive to win a new client than to retain your existing clients? So take care of your existing clients and reward them for coming back.
When customers are feeling the love, they are more likely to refer their friends and family to you. Client referrals are one of the most effective and cheapest ways to gain more clients. Why not give extra points or offer a discount to your client for a referral. Word of mouth is free advertising and increases your business reputation. Rewarding your clients for that referral is the least you can do. Without clients, you don’t have a business.
Do you have quiet days in your salon? Nobody wants to be sitting around twiddling their thumbs when you could be making money. Why not offer extra incentives to clients who book an appointment on your quiet days. You might like to offer double the points on your quiet days, for example, double points Tuesday. This will help to increase your money making potential on quiet days and leave more time slots available on your busy days.
New clients also love loyalty programs. When a new client comes to your salon, they are evaluating everything. Your customer service, the quality of the treatment and how you make them feel. Offering a loyalty program that encourages repeat bookings can help to keep that new client. It may be the difference between them choosing between you, over your competitor. Another boost for your profit margins.
PUNCH CARDS – A THING OF THE PAST.
When we are talking loyalty programs, forget the old punch card system. According to a poll by Harris (2019), 79% of consumers would be more likely to join a loyalty program that does not include a physical card. Nobody wants to carry around a card these days. They are outdated and show your clients that your business is not moving with the times. Plus, punch cards are disposable, people forget about them, or lose them and as a consequence get frustrated when they have no proof of accrued points.
AUTOMATED LOYALTY POINTS.
If you are not already a Neko Salon Software user, you may want to download a free 14-day trial so you can check out how we can fully automate your salon. https://www.getneko.com/free-trial/
If you already have Neko Salon Software, you will know how great the tools are that allow you to run a successful loyalty program. Our set and forget system will automatically assign points to your client cards at the point of sale. Having an automated system makes salon loyalty programs so easy. Neko Salon Software allows you to set up different points for different products, services or referrals. So take the headache out of your loyalty program by automation and sit back and reap the benefits. https://www.getneko.com/features/client-loyalty-gift-cards/
TRANSFORM YOUR CLIENTS SPENDING HABITS.
Want more control over how much your client spends in your salon? By creating a simple points system, you can encourage your clients to spend more to receive great discounts or VIP treatments. When surveyed, most customers join loyalty programs to save money but said they are happy to spend more money when they think they will get a return for their spending (Technologyadvice, 2015). Do you want to sell more retail products? Why not offer points that are only redeemable for products. There are many ways you can engineer your points system to direct sales to different areas or to promote new treatments. Your imagination is your only limitation.
SUGGESTIONS FOR A POINTS SYSTEM.
1 point per $1 spent. This encourages spending and clients feel more comfortable spending.
When a client reaches a certain amount of points offer a discount, reward or VIP treatment – Use your discretion to know what is right for your business.
Offer increased points for buying add-on products – 2 points for every dollar spent. This encourages cross-selling to move more retail products and ultimately increases your profits.
Double points on slow days – Encourages client to book on your slow days which leaves more time slots on your busy days.
Extra points for buying gift cards – Enticing your clients to buy a gift card may help to attract new clients.
Extra points for booking online – Enables you to spend less time on the phone.
Allocate points for positive online reviews – Increases your positive reviews which increases your business profile and encourages new clients to book.
Welcome bonus – Encourage clients to sign up to a newsletter or loyalty program and receive $5 dollars off their visit – Instant gratification for your clients and encourages repeat bookings. Enables you to gather email addresses for your database.
Offer free VIP treatments when clients reach a certain number of points – Encourages spending to unlock rewards. Makes your client feel special and valued.
Allocate extra points on clients birthday – Gives your client that warm fuzzy feeling.
When crafting your salon loyalty program, remember that the program must look attractive to your clients but not so attractive that you suffer a lose of profit that is too great. Make sure your loyalty program is effective by running reports and comparing sales, client retention and referral numbers before and after the implementation of your program.
Neko Salon Software allows you to run any reports you need at the touch of a button so you can be confident whether your loyalty program is working or not. Neko also takes out the element of human error, so there is no adding up of points or guesswork involved.
Most loyalty programs will take at least 3-6 months to show any tangible results. It won’t happen over night but it will happen
To keep your clients’ trust and loyalty, you must be able to fulfil your promises, so please make sure that right from the start you are comfortable with the choices you make and the discounts you will be required to provide. Be sure to set up restrictions on how the points can be redeemed and have
DON’T JUST SURVIVE, THRIVE!
Well, I hope you have gained some useful knowledge about the benefits of creating a salon loyalty program. Properly implemented and well thought out loyalty programs do wonders to increase your client retention and loyalty, drive sales, encourage referrals and to ultimately increase profits.
At Neko, we want your business to thrive, not just survive, so we are always thinking of ways to improve our software and give you all the necessary tools to make your business grow. We also enjoy providing you with valuable business information via this blog. So please comment below and let us know what topics you would like to read about.
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