Build Client Loyalty With a Salon Membership Program
Most salons rely on repeat business to be profitable. It can be time consuming and expensive to get new customers through the door as you constantly need to be creating special offers and staying on top of industry trends, special days and the seasons throughout the year.
It would be such a shame to get somebody new through the door, give them a great service that they are happy with, and yet never see them again! One thing we highly recommend is that you capture the email address of anyone who enters your salon so that you can keep in touch with them with your latest offers.
But sometimes, even this is still not enough. People are fickle and in any given geographical area there are generally at least a handful of competing salons to choose from. How do you convince that customer to come back to your particular salon, especially if your competitors also offer similar discounts and promotions?
This is where a membership system can come into play. No matter what kind of salon you run, or even if you are an independent stylist, you can benefit from offering some kind of membership to your clients.
What is a membership program?
A membership program for a salon is much like the kind you’d find in other industries. The client pays a fee on a regular basis such as monthly or annually, and in return they enjoy a series of benefits that would be more expensive if they were not a member.
The core of a membership program is usually designed to offer the customer a regular hair or beauty treatment at a lower price. However it doesn’t have to stop there as there are many other types of benefits that can be included which we’ll expand upon later in the article.
They provide a win/win scenario because the customer gets better value for their treatments, can gain a sense of belonging and for the salon it provides a steady stream of revenue.
Key benefits
Increasing customer loyalty
There’s a difference between a regular customer and a loyal customer. It’s a bit like dating – once a client has formed an attachment to your particular salon, they are unlikely to look elsewhere. Membership programs can help to increase that loyalty in a number of ways.
First and foremost, it creates a sense of belonging and exclusivity for the members. When clients feel like they are part of an elite group with access to special perks and benefits, they are more likely to form emotional connections with the salon. These connections go beyond mere transactional relationships.
In addition, when your customers are visiting your salon on a regular basis as part of their membership they will start to get to know the staff, perhaps they’ll have a favourite stylist and this serves to increase that loyalty over time.
Predictable and stable revenue
It can be tough running a business in which you never know how much you’re going to earn from one month to the next. Couple that with the fact that the salon industry can be quite seasonal with some slumps throughout the year such as over the summer.
For every client that subscribes to your membership program you have just secured for your salon a chunk of revenue which will repeat over time – assuming the client stays with the program! We’ll cover retention later on in the article but assuming that your clients stay in the club for the long term you can grow a dependable, steady income over time which is good news for any business.
Reduced need for marketing
If you don’t have loyal customers that come back to your salon time and time again, you’re going to have to spend a lot of time and money on constant marketing to try and recruit new people into your chairs. Whilst new client acquisition should always be an on-going endeavour, if you have a strong membership program in place, you won’t have to put quite so much emphasis on gaining new customers.
Higher LTV of customers
Knowing the LTV (life time value) of a customer is very important for any business because it determines how much you can spend on client acquisition and still make a healthy profit. When a customer enrolls in your membership program it makes it easy to calculate what their LTV is and it will generally be considerably higher than a casual customer who does not have services on a regular basis.
Easier booking management
Managing customer bookings can be quite the juggling act at times and you always have to leave some space free in the appointment book for random walk-ins. With customers that are members, they are much more likely to book their appointments in advance because their treatments are already paid for. This makes it a lot easier to manage the bookings for your salon, especially if you can book in your regulars for days and times that you know are usually quieter.
Easier inventory management
Similarly, with members usually booking appointments in advance as part of their membership package, salon owners can anticipate the demand for specific products and services.
This foresight enables better inventory management practices. You can adjust your stock levels accordingly, reducing the risk of overstocking, which ties up capital and storage space, or understocking, which can result in lost sales and disappointed customers.
Furthermore, because the customer has to pre-pay for their package you get a predictable stream of revenue coming in and this financial stability makes it easier to maintain a well-stocked inventory of the most popular and requested items.
Cross-selling opportunities
We’ll breakdown the mechanics of setting up a membership program later in the article, but if you add in discounts for additional treatments, that customer may end up making extra purchases that they might not have done if they were not a member.
In addition, every time a customer comes into your salon you have an opportunity to upsell them a product such as shampoo or a moisturiser. Therefore it follows that those customers that come in on a regular basis are also likely to purchase your products more often as well.
Additional referrals
One of the best kinds of clients that you can have is one who has been recommended by word of mouth, and who is most likely to make those kinds of recommendations? A regular, happy customer of course. We’ve already discussed how enrolling clients into a membership program can help to foster a sense of loyalty to the salon and this makes them a great candidate for referring others.
Customer Feedback
For any service based business, and especially one in which you are directly affecting somebody’s appearance (which is a highly sensitive area for most people!), it’s incredibly important that you deliver an outstanding service and ensure that your customers are happy with their treatment.
However, particularly in the UK, a dissatisfied customer is more likely to say nothing to you at the time but simply never return and of course that would also mean cancellation of their membership. But when you have the opportunity to build up a relationship with that customer over time, they are much more likely to feel like they can open up to you.
This regular interaction can provide a wonderful opportunity to gather feedback from your most valuable customers to make sure that you are always delivering the best service possible.
Implementing the program
We’ve looked at the numerous benefits of membership programs so now let’s dive in and see exactly how they can be implemented and all the things you need to think about.
Different kinds of membership structures
There’s more than one way to structure a membership plan:
- Unlimited services – here you may pick one of two key services and allow the customer to use them as often as they like. For example somebody with a very short hair style may want a trim every couple of weeks and this would suit them well. Pricing can be tricky for this option as you don’t know how much it will be utilised.
- A fixed package – you create a package of services and charge a fixed fee which is substantially less than it would be for a non member. What you might want to do here is create packages that contain both a very popular service and a lesser-used one. This allows the customer to try out alternative services that they might not usually try.
- Simple discounts – you don’t have to create a complicated plan. You might want to simply offer a discount on services for those that pay a regular fee.
- Additional perks – to make your membership more attractive, you can add in extra perks that don’t cost you much to implement. We have example
Payment frequency
If you’re unsure what kind of frequency to pick, start with a basic monthly membership. It fits in well with most people who are on a monthly salary, it creates a steady stream of revenue for you and you get to touch base with your customer every month which as we showed above, creates a strong sense of loyalty and gives you the opportunity to gather feedback.
On the other end of the spectrum you’d have an annual membership. Now this can be tempting in order to get you a large cash injection up front but it could hurt you later in the year when you have to deliver those services that were paid for months previously, especially if you have not managed your budget properly.
You might also want to offer something in between such as a quarterly package.
Multiple membership tiers
To cater to a diverse clientele, consider offering multiple membership tiers. Create a range of options, from basic to premium, each with distinct benefits and pricing. This approach allows you to appeal to various customer segments, offering something for everyone.
Of course you don’t want to over-complicate it by having many different tiers and then combine those with multiple payment frequencies as you could end up with dozens of different options which then becomes confusing and unmanageable.
Benefits and special perks
If you’re going to convince your customer to commit to paying a fixed amount on a regular basis there has to be very compelling benefits to doing so. Think beyond just offering discounts, here are a few ideas:
- Priority booking – reserve slots just for members
- Personalised consultations – this could be especially effective if combined with a special event such as an upcoming wedding.
- Access to new products or services before the general public.
- Host member only events & workshops
- Free prizes (see below)
Make it fun
When coming up with ideas for special perks why not think outside of the box a little and see if you can include some extra things that make the membership seem a lot more fun than just getting discounts. People like freebies, especially when there’s a game type element to them. You may have heard of the term ‘gammification’ which means to bring game-like concepts into something else such as a business.
Why not have a system which offers members regular opportunities to win extra prizes but done in a fun way. Think of those online casino websites that offer free spins at a prize wheel, virtual scratch cards, shake the globe to reveal a prize and so on. You can find neat tools to embed these kinds of things onto your website or in an app. You might have a series of small prizes like a hair styling product and then have a larger prize such as a free treatment for 1 lucky winner.
It may take more effort to implement ideas like this one but it will make you stand out as not many businesses do this kind of thing.
Random surprises
Following on from the same theme as the above point of making the membership fun, you could also make room in your budget for an extra prize on a regular basis that is given to a member at random but with absolutely no warning. This may seem rather odd but when that lucky customer gets an email telling them they have won a prize that they weren’t expecting you can bet they will be delighted and telling all their friends about it.
Marketing Your Membership Program
Now that you’ve gone to all the trouble of coming up with a superb membership structure that is going to be a great hit with your customers, you now need to make sure that they know about. I have seen some salons do this very badly indeed with barely a passing comment on their website vaguely telling people to ‘enquire’ when in the salon.
Your website
The membership system is important and it needs it’s own page on your website. This page should very clearly show all the details of the plan, any tiers you might have, and tell the customers exactly what they will get for their money. Try to make this simple and eye catching whilst still conveying all of the pertinent information. If you have walls of text on there, people may just click away.
You should promote your membership on your website as prominently as you would your main services or your new client offer.
You’ll also want to make sure you explain the terms of the membership clearly on the website. What happens if a member wants to cancel for example? Work out these details ahead of time.
Social Media
Make sure you talk about your membership program on your social media channels. Try creating some eye catching graphics with a tool such as Canva to show the benefits at a glance. Make variations of these and schedule out a new post perhaps once per month.
In addition, when your existing members come in for their treatments ask them if they could leave some feedback on your channel, leave a review online, and perhaps leave a photo. This is something you can do with any client, not just a member but when you have built up that rapport over time with somebody they are far more likely to agree to promote you in this way.
Email Newsletter
If you don’t already have a newsletter then you need to read our guide to email marketing and get started right away! In each newsletter you’ll have something unique that you are talking about, but you also want to push the benefits of your membership program as well.
If your email software is sophisticated enough it may be able to differentiate between members and non-members and only advertise the membership to non members.
In person
When you have a customer come into your salon for a treatment, especially if they are a regular, you have a great opportunity to sell them on the benefits of membership. Don’t overdo it though! You don’t want them to feel like they are being held captive to a sales pitch whilst in the chair!
Managing the Program
Whilst a membership program has a great deal of benefits for both you and your customers, you will have to give some thought to how you’re going to manage it before you get started. If you get this part wrong you could find yourself getting in a mess and making mistakes with the customers which would undermine the whole effort.
Membership management software
If you already use some kind of software system to manage other aspects of your salon such as bookings, have a look to see if it also includes membership management functionality. If not, it may be worth looking for either a different salon software suite, or just using generic membership management software that isn’t specific to salons. There are plenty of good quality choices on the market, but software is beyond the scope of this article so do some Google research. Some features to look for:
- Automated recurring billing
- Multiple pricing tiers
- Multiple types of payment frequencies
- Email autoresponder integration
Member customer service
Your members are special and they are paying extra money for a more exclusive service. It might be a good idea to delegate one or two people as dedicated support staff for your members. These people should know the details of the membership program and how it operates and be on hand to quickly answer any questions from the members.
Customer retention & handling churn
Recurring revenue systems are the holy grail for many businesses but they suffer from one common problem – people cancelling their memberships (called churn.)
This is something that you’ll want to prevent at all costs and so that is where having dedicated support staff as described in the above point can be very useful as they should hopefully be able to address any concerns and prevent a member from cancelling.
But it will still happen sometimes; it’s just a fact of life.
If a member cancels without first reaching out to staff, you’ll want to immediately find out why. It might be nothing to do with your salon – perhaps they are moving to a different geographical area for instance. However, if there is a genuine complaint then you want to gather that feedback, and do everything you can to rectify it. Even if you are unable to salvage that particular customer, you can use the information to improve your way of working for other members.
Always gather data about your members. Over time you will be able to build up a picture of the typical length of time that a member stays, and what the churn rate is and so on. This will help you more accurately gauge if the membership system is actually proving to be profitable.
Real world examples
We work with hundreds of salons and many of our clients have implemented membership programs of their own. In this section I’ll take a look at some of them to see just how they have been structured. Use these as a starting point to generate your own ideas for what will work best in your salon.
Anthony John – Blanket Discount
One of the simplest memberships around comes from Anthony John Salons who simply offer 10% off everything by being a member of their salon. The structure could not be simpler – a fixed fee for a 12 month membership and that’s all there is to it.
However what we like about this is that because nothing is excluded, the customer is likely to go to their salon for any treatment that they want.
Voodou – Monthly Clubs
Voodou also have a fairly simple membership system but they call it a club. There are two clubs that members can join, one of which is focused on hair colouring and the other one for blow drying. These memberships are each focused on one single service and offer a hefty discount on that service for a fixed fee per month.
City Retreat – One Service, Three Tiers
City Retreat are a spa & salon that offer massage treatments as well as other things. Their membership system is a little more complex than the first two examples, and focuses on the massage. Each membership package offers a free massage of a fixed duration, and a small discount on other services. The difference between the three tiers of the membership is the length of the massage. For all packages, customers may choose to pay monthly or annually.
Same Same But… A More complex example
Same Same But Different have the most complex membership out of these examples. They have 5 individually named memberships available and each one is different. They are based around a package of treatments that are bundled together to form a theme. Each one has a setup fee, a weekly payment fee which varies based on the level of stylist you wish to use, and slightly different terms.
Conclusion
There are a great many ways of building a membership system, from something very simple to very complex. If this isn’t something you have implemented in your salon yet, we highly encourage giving it some thought for all of the benefits such as the increased customer loyalty and having a more predictable revenue stream even at quiet times.
Whilst it may seem a little daunting at first you can always start with something very simple and then expand on it to add more packages or tiers as you become more comfortable with the management side of things.