Business Management

Week 3: Creating a VIP Club Creates Cachet and Cash

It’s a strategy supermarkets have been employing successfully for years. “Club cards” — or store “memberships” — build loyalty, provide perceived value, and can even raise cash.

It’s a strategy supermarkets have been employing successfully for years. “Club cards” — or store “memberships” — build loyalty, provide perceived value, and can even raise cash.

Take the case of Millie Haynam, owner of Natural Beauty Salon & Spa in Twinsburg, Ohio. Despite recently raising prices, her business is booming — a fact she attributes, at least in part, to her VIP card program. Clients pay $25 for a card that’s valid for one year. The card entitles them to 10% off all services and retail for a year. Card renewals are processed every January, which means that a normally slow winter month instead brings an influx of money from VIP card renewals.

“Clients are looking for ways to make their dollars stretch and this is one way we help them ‘justify’ their beauty budget,” says Haynam. But, she warns, you must raise your prices every year. If not, you’ll lose money by offering a discount. “If clients complain about the price increase, I tell them, ‘If you buy the VIP card your costs remain close to the same. It will pay for itself.’ This is a strategy that sells. It is so important to keep every client we can and if it means offering incentives to good clients to book more regularly and not cut back on retail, it is worth it.”

Another strategy — employed by MiniLuxe Nail and Beauty Lounge in Newton, Mass. — is to offer a club membership for free and give clients a host of small but valuable extras that encourage return visits and make them feel special.

Joining “Club MiniLuxe” earns clients the following perks:

• $10 gift card toward MiniLuxe retail for the client’s birthday (no minimum spending required)

• Benefit from the salon’s free Fix-It Plan. If you chip a nail within three days of your MiniLuxe manicure, clients can go back and have it fixed for free

• Earn 1 point for every $10 spent at MiniLuxe, and points are eventually redeemable at $1 per point for retail purchases once you have 25 points

• Save time and nail polish from smudging with speedy checkout during visits when client authorizes the salon to charge the credit card kept on file

• Earn 1 point for every new client referred to the salon (a point is earned when the client visits the salon and mentions the referring client’s name)

• Special members-only sales and private events

— Judy Lessin

Coming Next Week: Open Slots in Your Book? Just Twitter It

Keywords:   2010 Project     loyalty programs  



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