Why you should have a client loyalty scheme
By Kat Hill | 09 March 2021 | Expert Advice, Feature, Salon & Spas
Do you have a loyalty programme in place? Alice Kirby, director at Lockhart Meyer Salon Marketing, shares her top tips…
Why should nail & beauty businesses introduce a loyalty schemes?
An effective loyalty scheme can help increase both your retention rates and how long your clients ultimately stay with you. Both of these are key to growing a profitable, successful business because:
- Loyal clients are your best source of referrals and new business. Retaining clients is more cost effective than attracting new ones. It costs around five times more to find a new client compared to selling to your existing ones.
- Customer retention also helps you improve CLV (customer lifetime value) and reduce churn. For example: Say your average treatment is £25. A client visits 10 times per year = £250 annual spend. If this client stays loyal for 2 years (2 x £250) = total £500 spend. If this client stays loyal for 5 years (5 x £250) = total £1,250 spend. If the client stays loyal for 8 years (8 x £250) = total £2,000 spend.
What are the pros & cons of offering loyalty schemes?
These schemes gives your client an incentive to return, which also helps increase sales. What’s more, they are a low cost way to market your business.
However, a loyalty programme can be time consuming to manage and eat away at your profits. They also might not increase client satisfaction.
What types of loyalty schemes work well within nail & beauty businesses?
Offering spend-based points which can be redeemed for treatment discounts is easy for clients to understand, and simple for you to administer. But it puts the focus on the treatment cost and detracts from the client experience.
I prefer VIP schemes where the rewards are treatments as these encourage clients to try other services you offer. It also takes the focus away from the price.
Choose treatments which don’t cost you to much to do but which have a real value in the client’s mind, for example, an upgrade from a standard manicure to your luxe one.
Buddying up with local businesses who target a similar audience to you (think restaurants, gyms, hair salons, fashion boutiques and florists) to offer rewards can work well. But this can be time consuming to manage and you are losing an element of control.
How can businesses market their loyalty scheme to client?
A simple tip is to put some ‘points’ on a new card before handing it to your client. Your client feels they have an immediate gift and have already started on their journey to collect points.
Talk about your loyalty scheme on social and in your email marketing as well as having marketing graphics in salon. If you offer treatments as rewards change the ‘menu of rewards’ you offer regularly so you have something new to talk about.
Offer bonus loyalty points for word of mouth recommendations as this gives clients even more of an incentive to introduce their family and friends.
You can read more about loyalty schemes in the March issue of Scratch!