Tuesday 24 July 2012
Jump on the Loyalty Bandwagon!
In previous SalonHero blogs we have harped on about the importance of customer retention. The first point of call is obviously being able to provide the best treatments, with great service at a price the customer is willing to pay. Doing this will ensure that the customer will always leave the salon happy, however may not guarantee they return.
A key strategy to keep your customers’ coming back is a loyalty system. The essential point of a loyalty scheme is to reward customers for repeat business and currently in england they are being utilised in coffee shops and fast food outlets. These industry utilises them to try and win extra customers since in many cases the product offered is similar at a similar price. Similarly and more known are supermarkets utilising it (most famously Tesco - Clubcard and Sainsbury’s - Nectar Card). Salons can also utilise the concept in order to maintain loyalty and even collect data on customers is a solid infrastructure is in place.
In this blog we are going to chat a bit about the different options for loyalty schemes and how to go about implementing them.
What do you want from a loyalty scheme?
First stage in implementing a loyalty scheme should be to plan the end result. Using a loyalty system encourages your customers to keep coming back to you, but at the same time encourages them to spend more. If used correctly, it can help you increase client retention, frequency, spending and referrals along with enhancing your salon's image. For larger companies you may want to collect data on customer preferences and use this information to enhance the customer service experience. For this you would need some salon software which is readily available on the market.
Choosing your loyalty scheme
Depending on the resources you are ready to invest and on the equipment you have, you can choose between two types of cards: the cardboard or the electronic one. The electronic one is obviously more expensive option however it means you can collect data on appointments and preference. You can also ask your customers to register the card to collect other information and then integrate this strategy with an emailing campaign. A cardboard card is simpler and cheaper however has less scope for collecting data. you merely stamp a card after each appointment and once customer reaches a certain level you give them a reward. You can still ask for information but it is a longer process.
Creating your card
One benefit of a card based loyalty system is that you gain space in a person wallet (or on a keyring). This will mean the card is seen by others and you can benfit from referral business. Now how your card looks is very important! You want it to maintain the brand standard that you have created in your salon.
If you are using a paper card then either take a description of how you expect the card to look to a printer and they will design it for you. If you are feeling creative then you can even design it yourself and either pay for someone else to print it or print it in-house.
For an electronic card you can either have a credit card sized card or a keyring card. Your software provider will tell you how to go about getting these printed but you have to make sure the card looks great. You can also try a non-conventional looking card. For instance have one designed shaped like a comb or some scissors! This will certainly stand out in people's wallets or on their keyring. See Superdrug’s Beauty Card that has a mirror on the back.
Marketing the benefits correctly
If you want your customers to play the game you have to explain the rules. Having a loyalty card is useless if your clients don’t know what they can get from it, you therefore need to make it clear what your loyalty program can bring them. To do that, answer two questions:
How does it work?
10 stamps on your card and get a reward,
10 visits and get a reward,
Get 1 point per pound spent and get a reward when reaching 100,
Get 200 more points if you recommend us to a friend...
What do you get?
A free treatment,
A discount,
A complementary product..
The possibilities are limitless but must be chosen carefully according to your budget and the structure of your loyalty program. One thing you can do with the reward is get the customer to act in the way you want them to. If you want to push a specific treatment or product (perhaps you have overstock) then that can be the reward. If you decide to only offer a different treatment then it can get customer to pay for the treatment next time. Most marketers will tell you it is rarely beneficial to give away something that the customer would probably pay for anyway!
Measuring success of the program
Marketing 101 tells you that a strategy must have a method of measuring success rates. If you have invested in software then you may be able to track whether average spending, frequency of appointments or number of customers have increased. If the benefit is a different treatment you even even monitor whether the amounts of these treatments have increased. You should give it a few months (or a set period) and then compare the data to before the strategy was implemented.
For the paper cards it is harder to monitor the success. One way is to physically count the amount of completed cards coming back to measure how often they are used. Generally if appointments are on the rise and customers are visiting more frequently then you are obviously doing something right!
Tracking your customers
If you have invested in an electronic system to track and enhance loyalty, then one thing you need to remember to do is USE IT! Current technology allows you to learn a lot about your customers. When collecting the data make sure every few months you assess it. This could meant analysing which appointments are doing well and which are declining, who is using the card compared with who you want to attract.
Use the data you will gather to get your customers to act in the way you want them to. Every so often send an email out to customers using the loyalty system to ask them what they think. Once again this concept of empowering customers will lead to your business being run more efficiently.
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