5 STEPS FOR A SUCCESSFUL LOYALTY PROGRAM
Client loyalty is vital to retaining your clients and obtaining new ones. As a salon or spa owner, your loyal customers are brand ambassadors to your business and are a big part of your revenue. So, how can you create a mutually-beneficial loyalty program that rewards your clients, but also improves your key performance indicators (KPIs), or “growth indicators” as we like to call them?
We’ve broken down the process of creating a successful client loyalty program into five steps:
Step 1: Analyze
Implementing loyalty promotions in your business should always be based on growth. Run the MA200 report in Millennium or Meevo for the last year and analyze your growth indicators. Focus on the growth indicators that you are struggling with to make your promotions speak to those areas. The growth indicators are:
- New Clients Per Month
- New Client Retention
- Repeat Client Retention
- Frequency of Visit (FOV)
- Average Ticket
Step 2: Develop
The loyalty programs inside of Millennium and Meevo were created around the growth indicators mentioned in Step 1. Here are some loyalty ideas that affect each growth indicator:
To increase Average Ticket, you can utilize the promotion, “Receive X times retail purchase as points”, “Receive X times service purchase as points”. For example: If a client purchases $100 in services, and the promotion was set up to award 10 times the service purchase. The client would be awarded 1000 points, or $1.00.
To increase FOV, you can utilize “Reward points for service after being performed X times”, “Points for re-booking at the time of ring-up”. For Example: If a client receives 5 pedicures, they will be awarded 1000 points, or $1.00.
To increase New Clients Per Month, utilize “Points for referring another client”.
To increase New Client Retention, utilize “Points for re-booking during first visit (new clients)”. For Example: If a client receives 5 pedicures, they will be awarded 1000
points, or $1.00.
To increase Repeat Client Retention, utilize “Points for membership purchase”, “Points for re-booking next service at the time of ring-up”, “Reward points for service after being performed X times”.
To increase Productivity, utilize “Reward points for service after being performed X times” or “Points for re-booking at the time of ring-up”, “Points for membership purchase”, “Points for trying a service class the first time”, “Points for package/series purchase”, “Points for memberships purchase”.
When strategically trying to grow your business, we suggest starting with no more than 2-3 promotions to avoid giving away too much.
Step 3: Education
Your employees are one of your greatest assets in implementing client loyalty programs. They speak to clients regularly, have already established trust, and have the most ability to inform them of current promotions.
A concrete dialogue will help your employees be more confident with pitching the client loyalty program to your customers. For example, if a client is interested in purchasing retail, help increase the likelihood of the sale by mentioning they will receive “X” amount in points if they do so. The front desk can solidify a re-booked appointment by informing the guest they will receive points if they schedule their next visit.
Step 4: Launch
After your team is on board, it’s time to launch your client loyalty program. Create printed collateral for clients to inform them of your new promotions and any restrictions. Flyers should also be placed in new client welcome bags, and all new clients should be informed when entering the salon/spa. Promoting your loyalty program via email/SMS campaigns is highly recommended, and you should turn on the option in Millennium where points will print on the bottom of receipts. Doing so will inform clients when they accrue points and will cause clients who don’t have any to inquire how they can receive points.
Step 5: Evaluate
In order for your client loyalty program to be successful, it needs to benefit your business. Take the time to reevaluate your points promotions with your MA200 report at the end of each year to determine how your business has grown from the previous year.
If you notice that your loyalty promotions have not increased your growth indicators, evaluate your strategy. Does your front desk have the proper scripts in place to educate your clients on the loyalty program? Are your stylists or therapists actively discussing re-booking throughout the client’s visit? Make sure your team has the proper tools in place to push your loyalty program.