How Customer Loyalty Programs Work and Why Your Salon Needs One

Your customers are the heart of your business. Salon loyalty programs are a great way to show your appreciation and keep clients happy.
Naturally, every business wants to be their client’s “go to” place. Amidst the COVID-19 crisis, small businesses and their loyal customers have had to weather harsh changes. As small businesses reopen their doors, it will be important to reengage their customer bases to grow and get back on their feet.

Did you know, it is five times more expensive to win a new client than to retain an existing one? Not only that, but returning clients spend 67% more than new customers. In light of these statistics, it goes without saying that customer loyalty pays off. Focusing your marketing strategies on customer retention can give your salon a quantum leap.

Although customer retention plays an important role in growing your business, client acquisition should always take equal precedence. An easy, effective way for salon owners to grow a strong base of repeat customers is through salon loyalty programs. In this post, we’ll teach you more about salon loyalty programs and why they work.

customer loyalty programs
What is a Salon Loyalty Program?
A salon loyalty program is a rewards system offered by a company to its returning customers. Such programs may give a customer coupons, free merchandise, or even new products ahead of official release. Customer loyalty programs are lifeblood of the American small business. Through thick and thin, small businesses rely on repeat customers for economic sustainability and future planning.

According to a the Salon Iris 2020 Consumer Survey Report, when customers are regulars at a small business, 42% say they would only refer a friend if they ALWAYS have a positive experience. That positive experience comes with a caveat, 76% of consumers say they are more loyal to individual employees than to a brand.

Investing enough time and money in value added customer loyalty programs is the key to holding on to your customers.

But how do you create an effective loyalty program for your salon that will compel your customers to stay?

loyalty points
How to Create a Salon Loyalty Program
The first step to create a feasible loyalty program for your salon involves understanding your customers’ buying patterns. Regular customers are those who utilize your products and services frequently. These are the clients who are satisfied with your services and are ready to forgive minor slipups.

Sporadic customers are those clients who visit your salon once in a while or for special occasions. By identifying regular and sporadic customers, you’ll be able to come up with loyalty programs that target each category of customers.

Once you have identified your customers’ buying patterns, you can now devise a loyalty program that will encourage them to buy more. There are many ways to create a loyalty program for your salon. Here are some killer ideas that might engage your clients more, while at the same time make them feel appreciated.

1. VIP Treatment
Give your loyal clients the VIP treatment they deserve, especially those who have acted as your brand’s ambassadors by way of referrals. A VIP Treatment loyalty program can include special rewards and bonuses for the most frequent and loyal customers.

Nothing can make your loyal clients feel more appreciated than bearing that “VIP badge.” The VIP status can open them up to exclusive salon deals and discounts on select retail items on sale, special treatments, and more.

2. Points System
One of the most popular ways of creating a reward program for your loyal clients is through a points system. Most salon owners prefer the points system because it’s easy to implement and straightforward for customers to understand.

You can start by assessing “Value” with respect to “Points.” Ask yourself, what will it take for a client to earn a single point in your salon? For example, you can set $1 to be equivalent to 1 point. Be sure to lay down the circumstances under which the points are redeemable, and whether they can be redeemed for cash.

You can also assign points based on customer behavior that may be beneficial to your business. Here’s a typical point system you can utilize.

1 customer referral = 400 points

Appointments made for birthdays = 100 points

Each appointment made through the salon app = 200 points

Each appointment made through physical visit =100 points

Such a system can encourage people to make bookings through the salon app. It’s a win-win for everyone. The salon owner gets more traffic to their site and the client gets more redeemable points.

Salon Iris Client Management

3. Punch Card
The use of a punch card is another effective, yet easy to use reward program that can encourage repeat clients.

Successful salons supply their customers with loyalty punch cards after their first purchase. It’s upon the customer to choose whether to punch a slot for each incremental amount spent or for each visit. Either way, customers are entitled to free treatment, a motivating factor for repeat clients.

4. Social Rewards
In this era of digital revolution, your salon needs a social media presence. Since all beauty shops are in a visual industry, salons can attract plenty of new clients through Instagram, Pinterest, and Facebook.

Set up a loyalty program that will reward your clients based on social media promotions. You can ask satisfied customers to take photos of their new hairstyles, post on different social accounts, and tag your salon’s account handle along with the snaps.

You can then grant reward points for each post or give them access to special discounts. You can also leverage the power of Yelp marketing by requesting satisfied clients to drop positive reviews of your salon on your Yelp page.

customer loyalty programs
Why Customer Loyalty Programs Are Beneficial for Your Salon
Here’s how salon loyalty programs can be beneficial to your salon.

1. Client’s Engagement
Customer loyalty programs not only encourage repeat customers but also spur them to take other actions. If there are reward points for booking early, customers will have a reason to do so, even if they are prone to procrastinate. Assigning reward points for buying retail products might compel a customer to buy at your shop, even if they are used to buying the same products elsewhere.

2. Referrals
Word of mouth is one of the cheapest and most effective ways of attracting new clients. At times organic search results can be biased due to paid ads, but peoples’ experiences always hit the nail on the head. By offering loyalty points or rewards for every referral, your customers are likely to refer more clients to earn free services.

3. Contact Details
As online security threats continue to infiltrate the web, many people don’t feel at liberty to give their private information for free. But when your customers sign up for a loyalty program, you can access important information such as their email addresses and phone numbers. This gives you the opportunity to follow up with them after a service to ensure satisfaction and engage them further through newsletters.

leaving good reviews
Wrapping Up
Salon loyalty programs are a great way for you to hold on to your clients. They go a long way to ensuring your clients not only hold on to you but also act as brand ambassadors for your salon. When setting up a salon loyalty program, remember to keep it simple. It needs to be transparent for customers to understand.