To reward good customers and increase client loyalty, some salons are implementing VIP programs where members pay a yearly fee in exchange for special privileges. A well-implemented VIP program will increase your salon’s bottom line as well.
One of the biggest issues facing salons today is poor client retention. According to Kristi Valenzuela, a success coach at Crystal Focus, client retention is currently at 37%. That means that out of 10 new clients that walk in your door, it’s likely that less than four of those will return. So what’s happening to the other six?
Valenzuela compares the salon experience to dining at the average chain restaurant. You probably have three or four restaurants in your area that all serve just about the same dishes at the same prices. When you’re hungry, you’re likely to go to whichever is convenient at the time since they are all the same to you.
“That’s what clients are thinking salons are like,” says Valenzuela, “that they can get the same thing down the road. We really need to figure out how to be unique.”
To stand out from their competition and to encourage repeat business, some salons are implementing VIP programs where members pay a yearly fee in exchange for special privileges. These programs are designed to reward good clients while increasing client loyalty. Of course a successful VIP program should also increase your salon’s bottom line as well.
Michael Giunta, owner of Salon 1 in Jamestown N.Y., boasts an estimated 25%-30% increase in retail sales since implementing his salon’s VIP program, which offers clients 20% off all retail purchases with their VIP card.
Clients at Salon 1 purchase this card for $10, which is donated to help fight cancer, and can use the card throughout the year. Plus, “clients keep these cards on them,” he says, “so they always have our number at their fingertips.”
Tailoring Your Program
Discounts on retail products or a flat percentage off all services are not the only ways to show recognition to your VIPs while building your business. VIP members can be offered specific services at an exclusive discount, or given gift vouchers to try other services such as a free paraffin dip or free service upgrades.
Sue Kmak, general manager of Lisa Thomas Salon in Tinley Park, Ill., suggests using your VIP program to promote specific products or services during slow times. Last year, Kmak’s salon offered its VIP members $10 off pedicures and a free polish change during the month of January when pedicures are typically slower. “Our pedicure business really boomed because of it,” she says. Many of those clients continued to get regular pedicures throughout the winter and the rest of the year.
Bryan Durocher, a salon consultant and president of Durocher Enterprises, suggests including different types of benefits in the program such as members-only special event nights, savings on gift certificate purchases, or advance notice for promotions with added savings exclusive to members. “The key is to make it enticing,” says Durocher, “and having a selection of benefits is vital.”
However you choose to implement your program, just remember your goal: to increase client loyalty while increasing your bottom line. Read on for some pointers to keep you on track.
First, “don’t blow your budget,” says Valenzuela. Before you begin, Valenzuela suggests you review your profit-and-loss statements to see what you can afford to spend on the program. Set a budget and then stick to it.
“You just can’t say, ‘I am going to spend everything I have right now on this month’s promotion,’” warns Tom Kmak, owner of Lisa Thomas Salon.
Durocher suggests evaluating your current clients by asking yourself, “Who are the most loyal, who come frequently and pre-book their appointments? Then ask yourself, how many of these clients can I turn into VIP members?”
Coming up with an estimate of who will participate will help you evaluate costs such as printing your membership cards. When getting your cards printed, keep in mind that, “that card is going to reflect your image,” says Giunta. “If you want to do it, then you should do it right. If you put it on a cheap piece of paper, it’s not going to look good.”
Think Reward, Not Discount
Use your VIP program as an opportunity to stand out from the salon down the street. “It’s not discounting and couponing,” says Durocher. “It’s rewarding your clients.”
“I do believe that salons that discount for everything attract that type of client — the kind of client who is just looking for a deal,” says Durocher. “They’ll come in because you’re offering the cheapest service that month. In my experience, that type of client doesn’t stay with the business.” The VIP program is different, says Durocher, because it’s upscale. “You get a beautiful VIP card and you’re invited to exclusive events.”
When you’ve set your budget and planned out your promotion, start focusing on marketing.
Valenzuela recommends a grand launch that includes signage through-out the salon and scripting for the team. This way, every client who walks in the door is introduced to the possibility of becoming a VIP member.
Have posters that read, “Ask about our VIP rewards program,” and make sure all employees are ready to explain the benefits. You can also create handouts to put in retail bags and feature the benefits on your website.
Get the Staff on Board
Whatever your marketing strategy, the most important thing, says Valenzuela, is to make sure everyone on your staff is on board and excited about launching the program. “Too often I see salon owners with the best intentions launch a program like this and then they don’t ask for support from their team,” says Valenzuela, who suggests creating some kind of staff incentive to keep employees excited about the program.
“Sometimes the staff gets really excited, but they get sick of talking about it. They tell all their clients at first, and later on they forget to talk about it with new clients — and new clients are the lifeblood of the salon,” says Valenzuela.
Many times employees won’t talk to their clients about promotions because they feel uncomfortable bringing it up. “Sometimes they just need a lead-in script,” says Valenzuela. These scripted phrases can be as simple as: “Have you heard about our new VIP program?” or “Hey Susie, I thought you’d be interested in this.”
Lastly, give yourself ample time to plan and promote your program before implementing it. “You don’t want to say ‘OK, we’re going to do this promotion for a month’ and by the time you get it ready you’re halfway into that month,” says Kmak.
~Jessica Mahler is a nail technician and the owner of Painted Red Nails & Naturals Boutique in Cape Cod, Mass.