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    Why does your salon or spa need a loyalty program?

    We all have those regular expenses that appear on our monthly bank statements, right? 

    Like the money spent on a haircut each month, the weekly gas refill for your car, or that necessary morning coffee from the local coffee shop. Let’s not forget Netflix and Spotify subscriptions that keep the good vibes flowing.

    Sure, these seem like routine buys, but they represent the consistent threads that inform our monthly spending habits. 

    Now think about that regular client that always swings by to your salon for a blowout, or books into your med spa for a facial or anti-wrinkle treatment, leaving a trail of transactions from your business on their bank statement.

    If you have a handful of regular clients then you’re already doing a lot of things right. In fact, loyal clients can be a huge driver for success at your spa or salon. HUUOGE.

    Loyal clients:

    • Boost your revenue: Over time, they increase their spending, which means more moolah for your business.
    • Love hearing from you: They appreciate your communication and are more likely to jump on board with your special offers.
    • Are more likely to refer a friend: Happy clients are more likely to sing your praises and recommend your business to others.

    What’s more, according to this research, returning clients spend 60-70% more than new clients who are in turn five times more costly for your business. To further make the case for returning clients, 82% of businesses agree that retention is cheaper than acquisition.

    Why are loyalty programs so important?

    The beauty and wellness sector swiftly responds to evolving trends and client preferences. Clients are pursuing an experience that aligns with their lifestyle and aspirations. Therefore, tailoring your business approach to meet the expectations is key to success.

    Intense competition and price sensitivity

    This industry is saturated with numerous service providers, ranging from large salons to independent practitioners.

    With clients becoming price-conscious, competition is fierce. Convenience, both in terms of pricing and location, often dictates their choices.

    In an industry where clients act as price shoppers, standing out becomes a continuous challenge. Offering quality and unique services is paramount to capturing and retaining market share.

    Building loyalty is difficult, and retaining it is equally challenging. Clients may be swayed by promotional offers or competitive services from rivals, underscoring the importance of consistently delivering value and personalized experiences.

    Online presence and reputation management

    Social media is a crucial advertising platform for any industry right now. Online reviews and customer opinions play a significant role in one business’s reputation.

    Managing a positive online reputation and addressing negative feedback is crucial for maintaining a loyal client base.

    Technology integration

    Staying technologically current can be challenging, especially for smaller businesses. Having online booking systems, digital marketing, and other tech advancements is essential for reaching and retaining clients.

    Developing effective client retention strategies is probably the most important ongoing challenge.

    That’s why at the heart of your practice’s marketing strategy should lie loyalty programs. Clever loyalty programs have become a linchpin for businesses looking to shine in an industry that’s getting more competitive by the day.

    How does a loyalty program help?

    Remember when Betty Crocker started using discount coupons for her jams? No, us neither – it was in 1929 after all. However, those were the early days of loyalty marketing.

    Now, you see loyalty programs everywhere – from restaurants and toy stores to beauty brands and bookshops.

    Think about that “Buy one pair, get one free” deal at your favorite shoe store? Yep, that’s a loyalty program. And that Sephora VIB account with birthday gifts and extra discounts? You guessed it, another loyalty program.

    For small businesses, having loyal clients is crucial for staying afloat and planning for the future.

    According to the 2018 Bond Brand Loyalty Report, most people are likely to suggest a brand with a good loyalty program (70%), and a majority (77%) are inclined to stick with a brand that offers one.

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    Loyalty programs have also been proven to be effective in salons and spas, with this LinkedIn author stating that they can increase sales revenue by 20% and purchase frequency by 14%.

    But why are these loyalty programs such a big deal? Let’s break their benefits down.

    Benefits of having a loyalty program in your salon or spa

    Client retention

    Your practice needs repeat clients to thrive, and a loyalty program serves as a potent tool for building long-term relationships. By offering exclusive perks and rewards to repeat clients, they’ll keep choosing your services over others, thereby boosting overall client retention rates.

    Client acquisition

    A well-publicized and attractive loyalty program can act as a powerful magnet for new clients as well. Word-of-mouth, social media buzz, and positive online reviews about your program can attract individuals seeking to be valued as clients.

    This influx of new clients not only expands your client base but also presents additional opportunities for converting first-timers into loyal regulars.

    Business reputation

    The positive impact of a loyalty program extends beyond the rewards. They make your practice look customer-friendly and dedicated to top-notch service.

    This improved perception, in turn, helps build a solid reputation, making your salon or spa the go-to place for picky clients.

    Client engagement

    Engagement is the key to maintaining a good relationship with your clients. Loyalty programs provide a structured platform for ongoing interaction, allowing you to communicate exclusive offers, updates, and personalized tips.

    This increased engagement fosters a sense of community, making clients feel more connected to your business.

    More referrals

    Word of mouth marketing is so valuable for med spas and salons. Happy clients are not only likely to return but also to refer your services to friends and family.

    A loyalty program that includes referral bonuses turns your existing clients into enthusiastic brand advocates who actively promote your practice to their social circles.

    Increased bookings on slow days

    Encourage clients to visit during traditionally slow periods by incorporating special promotions or bonus rewards for appointments on those days. This not only helps in optimizing your business’s capacity but also ensures a steady flow of revenue throughout the week.

    Easier to upsell and cross-sell

    Loyal clients love trying new things. Your loyalty program is the perfect tool for introducing new premium services, packages, or products.

    Since clients already value the benefits of your program, they are more likely to explore and invest in complementary offerings – especially if they earn points for doing so!

    Increased revenue

    At the end of the day, a well-crafted loyalty program is a money-maker. More loyal clients, more upselling opportunities, a constant flow of new clients, and a higher spending frequency – it all adds up to a growing income for your salon or spa.

    4 types of loyalty programs

    Punch cards

    This type of loyalty program is one of the most traditional ones, a classic favorite and likely familiar experience for many of us.

    These programs are designed to encourage customers to repeat business by offering incentives and rewards based on their cumulative purchases.

    Clients receive a loyalty card to use for purchases, be it for a spa treatment or retail item. With each transaction the card gets punched or stamped, and after reaching a predetermined number, clients unlock the perk of a complimentary product or service.

    Punch cards as a loyalty program have evolved over time, transitioning from physical cards to digital formats.

    While they remain a popular and effective method for incentivizing customer loyalty, businesses are increasingly exploring modern alternatives that leverage digital technology for a more seamless and personalized customer experience.

    Points system

    A digital points-based system is a much smarter approach for loyalty. Here’s how it works.

    Every purchase earns clients a specific number of points, and these points translate into a monetary value set by the practice.

    For example, clients earn a certain amount of points, predetermined by you, if they book a new treatment, book a service online, or simply write a review or refer a friend. Once they accumulate 100 points, for example, they can redeem it for a product or service at your salon or spa.

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    Although more complex than the punch-card system, the added complexity comes with a huge payoff.

    Membership

    We’ve noticed a growing trend of membership-based loyalty programs in the beauty and wellness industry.

    Here’s the concept: Clients invest in a membership for your salon or spa, securing discounts that eventually offset the membership cost. Most basic examples of this are Amazon Prime and Costco’s membership model.

    At your salon or spa, for example, you can get creative by offering an annual membership model where clients pay a monthly fee that is accumulated as credit in their account. This credit can be subsequently used for purchasing services, products, gift vouchers, or get further discounts.

    Tiered points system

    To create a tiered points system, consider introducing three distinct levels, such as silver, gold, and platinum. Define specific criteria for each level, and your clients can enjoy various discounts or perks corresponding to their tier. The more they invest, the more lucrative the rewards become.

    Review and share program

    Encourage your customers to share their thoughts on the products or services they’ve tried. Every review they leave will score them points in your loyalty program.

    To sweeten the deal, offer extra points for sharing their reviews or posting before-and-after photos on social media. This not only spreads the word about your business to a larger audience but also gets your current customers chatting online.

    BONUS: Periodically introduce bonus challenges, such as creating a video review or participating in a themed review contents, with the chance to win extra points, free services or gift vouchers.

    Top tips for running a successful loyalty program

    Creating a loyalty program in your salon or spa needs to work for your business. There’s no one-size-fits-all solution, but here are some down-to-earth tips to help you craft a loyalty program that’s both professional and effective:

    Loyalty points

    Reward clients with loyalty points for specific products or services. By assigning points to specific treatments, you can effectively manage clients’ rewards. To maintain client interest, it’s crucial to offer a variety of redeemable rewards.

    While treatments make fantastic rewards, consider including options like gift cards and vouchers that require fewer loyalty points. This allows clients to either gift the cards to others or use them as a convenient option for their own treatments.

    Loyalty tags

    Introduce tangible loyalty tags like “Serene Superfan” or “Pampering Pro” to boost brand recall. Clients can easily track their loyalty status with these tags, adding a fun element to the program.

    Personalized rewards

    Personalize rewards based on clients’ preferences, purchase history, and special occasions. This could include personalized discounts, free services, or product samples.

    Celebrate clients’ birthdays, anniversaries, or other special occasions with bonus points, discounts, or complimentary services.

    Promote on social media

    Leverage social media platforms to spread the word and excitement about your loyalty program. Showcase program details, available rewards, and the redemption process to engage your audience.

    Listen to client feedback

    Seek feedback from clients to assess the success of your loyalty program. Pay attention to aspects that resonate with clients and be open to adjustments that enhance the program’s attractiveness, to in turn, reinforce loyalty and enhance the overall experience.

    To consider!

    A successful loyalty program starts with cementing the loyalty of your existing clients. After all, they’re the heartbeat of your business.

    Ensure rewards are both achievable and valuable. Be cautious not to set rewards too high, considering the impact on your business’s financial health.

    Align your program with both your business goals and client expectations. Plan and analyze carefully to fulfill commitments without overextending.

    Clearly communicate any restrictions on points redemption. Establish well-defined terms and conditions to prevent misunderstandings, emphasizing that points cannot be exchanged for cash.

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    Welcome Pabau’s Loyalty feature!

    Pabau’s Loyalty feature provides a comprehensive system to manage and monitor loyalty campaigns, points, and rewards. No more struggling with manual point calculations and the potential for errors.

    With Pabau, you can tailor your loyalty programs to your preferences. You can reward your clients for different actions, such as leaving reviews or booking a service online. You also have the flexibility to determine the specific points clients earn for each activity.

    By using a strong database, it makes sure that points are assigned accurately and without mistakes when clients make purchases. This makes your loyalty program smoother and improves how clients feel about their overall experience.

    With Pabau, you can:

    • Create and manage loyalty campaigns
    • Review current active loyalty programs
    • Track client loyalty points

    … and you’ll get:

    Easy management

    With Pabau, setting up a new loyalty campaign is quick, uncomplicated, and highly effective in promoting repeat bookings and rewarding your clients.

    Pabau’s integrated Loyalty feature is a breeze to set up and oversee. You have the flexibility to decide on the incentives for your clients, and they effortlessly accumulate points with each treatment booking.

    Real-time insights

    Loyalty programs take around 3-6 months to show results. To use the maximum of your loyalty program, you must be sure to measure the improvements made.

    On the Loyalty dashboard, with the touch of a button, you can access comprehensive reports, allowing you to measure the impact of your loyalty programs and compare them with previous months, making it easy for you to fine-tune your strategy for optimal results.

    Point management and redemption

    Once your clients have accumulated a sufficient number of points, Pabau easily converts them into discounts or full payment options for a variety of treatments, allowing your clients to immediately reap the benefits of your loyalty program.

    This added flexibility lets your clients enjoy their rewards, giving a sense of appreciation and satisfaction. The automated nature of this process ensures a smooth and enjoyable experience for both you and your clients.

    Plus, managing points for a specific client is also possible with Pabau. By accessing their Client Card in the system, you can delve into details about the client’s financial transactions and interactions with your business.

    This centralized hub serves as a quick and intuitive starting point for loyalty point management. Here, you can conveniently view information about your client’s current points balance, providing a snapshot of their loyalty standing.

    If needed, Pabau offers a user-friendly option to manually add points, giving you the flexibility to tailor the loyalty program to meet the specific needs of your clients.

    Automated marketing integration

    Keeping your clients engaged is key to a successful loyalty program. Pabau doesn’t stop at point management and creating new campaigns. It also integrates automated marketing features to promote your loyalty offers effectively.

    From personalized promotions to targeted campaigns, Pabau ensures that your loyalty program remains top-of-mind for your clients, driving sustained business growth.

    In summary...

    A good loyalty program is vital for your salon or spa’s ongoing success in the competitive beauty and wellness industry. Loyal clients bring in consistent revenue, spend more over time, and become advocates for your business.

    Despite challenges in the beauty and wellness industry, loyalty programs are effective tools, addressing issues such as client retention and business reputation, leading to increased earnings.

    To build a successful loyalty program, it’s essential to tailor it to the unique needs of your business and clients.

    Pabau’s Loyalty feature streamlines the process, providing easy system management and real-time insights to maximize the impact of your loyalty initiatives.

    By prioritizing client loyalty, you not only secure a steady stream of revenue but also create a community of dedicated clients who value and champion your salon or spa.

    What you should do now

    1. Schedule a Demo to see how Pabau can help your team.
    2. Read more clinic management articles in our blog.
    3. If you know someone who’d enjoy this article, share it with them via Facebook, Twitter, LinkedIn, or email.

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