The straightforward answer is ‘yes’, loyalty schemes do work. Big brands use them, so they must.
Today however, I’m going to tell you how they work best for Salons.
It’s almost impossible to be a consumer and not collect at least a few loyalty cards from different retailers, all competing for our attention.
We pick them up for the rewards. And so, of course, will your clients.
So, what’s the exchange? What does the salon get?
The benefits for good schemes can include:
- Increased frequency (more money)
- Increased client lifetime (more money)
- Increased spend (more money)
Sounds pretty attractive, right?
The crucial thing here is how and what the scheme deliver in return.
In other words, what are the incentives you offer to your clients?
If you get it wrong your scheme won’t flourish. Those benefits above will diminish.
Many schemes lazily (perhaps based on what the salon around the corner does) give discounts – assuming that’s what all clients value.
But the truth is, that’s missing a trick. Here’s a close-to-home case study which illustrates this vital point.
Case Study – Mrs Shove (VIP)
My wife has been using the same salon for a while.
She uses the same two team members, a stylist and a colour technician. She has a cut and a finish each visit and a colour every other visit.
Like many she is a creature of habit. Unless upset or bored she’ll return to the salon on this basis.
In her case ‘Service quality’ and ‘experience’ far outweigh ‘value for money’.
The salon has a loyalty scheme. My wife doesn’t know what it is about, but she is signed up. And from time to time her bill is reduced as her ‘loyalty reward’.
What does the salon achieve by this?:
The loyalty of a customer who doesn’t worry about cost but cares about service? Of course not.
An unnecessary reduction in revenue? Of course.
The opportunity here is to reward her with what she values, and not money back.
The salon has other services my wife has not tried. A nail technician, for example.
(As it turns out, one who doubles as a receptionist because she is not very busy.)
A creative loyalty scheme would be rewarding my wife with free services she is likely to pay for on future visits – like having her nails done at the same time as her haircut.
5 hints to plan a great scheme:
1. Use loyalty schemes – but be smart (salons are not supermarkets)
- Understand what your customers value as ‘rewards’
- Tie this in with future revenue – it’s an investment
2. Consider loyalty tiers
- Offer money off to loyal but low-spending clients where value for money is a key consideration.
- Offer free services and new experiences to loyal high-spenders
3. Keep skilled staff busy by introducing new services to regulars as a ‘bonus’ (even if there is no loyalty scheme) rather than have them twiddling thumbs.
4. Run special (FREE) evening events for high-spenders to introduce new services and products – marketing to them using Salon Advantage text tools.
5. Use Salon Advantage tools to both run and monitor your scheme.
— Colin Shove