Retaining profitable clients

Understanding your client base, and recognising which clients spend the most, is key to boosting your salon’s profits, says salon business expert Liz McKeon

Many salon managers and owners don’t know who their most profitable clients are, let alone how to keep them coming back regularly. Knowing who they are, and what motivates them, is vital for your business. Having a good understanding of your customer base, especially the most profitable clients, will help you to increase the footfall of repeat customers in your salon, and boost retail sales.

All salon owners appreciate the importance of attracting new clients, but many underestimate the advantages of increasing client loyalty. In fact, research indicates that a 5% improvement in client retention could add between 25% and 125% to the bottom line. Developing and maintaining client loyalty can become one of your greatest business weapons. It is much cheaper to retain a current customer on your books, than to invest in seeking and securing new customers. It’s also important to remember that when looking into how to make money in the hair and beauty business, profitability isn’t simply about measuring clients’ level of spend; it is also about assessing their level of expectation, and ensuring you can deliver on this. So it is crucial to profile your clients, and understand which ones are profitable, and if any are actually costing you money.

You can also make your clients a part of your sales team. Word of mouth recommendations continue to be the best form of advertising available. Making clients feel special is by far the best way to help them become even more loyal, and the level of customer service you provide is the foundation to this. It can make a huge difference to clients; they will potentially pay a slightly higher price if they are confident that they will be looked after much better by you. Your salon’s competitive advantage could be your high-quality attentive service, so it’s important to remember that.

‘Your salon’s competitive advantage could be your high-quality, attentive service, so it’s important to remember that’

Loyalty card schemes 

Loyalty card schemes are an effective way to increase your client retention levels and improve your profitability, yet many salons are missing this obvious trick when it comes to building client loyalty. In a very competitive market place, clients find it easy to switch salons, and keeping them satisfied isn’t always enough. To increase loyalty, start to recognise and reward your best clients; use these schemes to incentivise and delight your most valued ones. Loyalty initiatives allow you to focus on your best clients, and improve client satisfaction levels. Loyal clients buy more, and are often willing to spend more. So by increasing loyalty, you increase profitability.

Focus on specific goals – you are aiming to reward clients for behaving in the way that you want. For example, are you looking for repeat business, or do you want your clients to spend more? Above all, your loyalty card scheme must be simple to use, and the rewards should be attractive and attainable. Here are some tried and tested methods that are guaranteed to work well in your salon:

■ Offer cumulative discounts on selected lines. For example, this could be 10% off their next purchase if they spend £100. Limited time offers can encourage prompt purchases.

■ Give away free items with multiple purchases. ‘Buy one, get one free’ is a great way to encourage short-term repeat sales.

■ Invite clients to trial products and services for free. Asking trusted clients to give you feedback before you launch a new product or service will give them a sense of ownership over the product, which is likely to increase sales in retail later on.