5 False Beliefs That Hurt Client Retention for Hair Salons

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1 5 False Beliefs That Hurt Client Retention for Hair Salons Having a sound client retention strategy is critical to sustain both service and retail sales for your salon. Your strategy should center on delighting your top clients and listening acutely to their needs. If you don t know who they are or what makes them ecstatic, you are losing out on an opportunity to use word of mouth marketing in a powerful way. And even more painful, you are walking away from potential sales. Imagine if you started your business from scratch again and built it squarely around your happiest clients needs. Would you make the same decisions in how you designed your operations? In a client-centered business your technology needs, hours of operations, service offerings, and retail selection should all reflect your top clients wants and needs. As the needs of your client base evolve, so should your operations. Would your hiring criteria and staffed positions remain the same? As a manager, you want to make sure that both the technical and interpersonal skills of your staff allow you to implement your vision. With your top clients at the center of your business decisions, you would not jeopardize the salon environment that you created with sound operational decisions, with poor staff decisions. Having adequate staff to fulfill your vision would be too costly. Copyright 2011 My Salon Scoop, LLC, V. Woods 1

2 Listening to your clients is the only way to ensure that your operations and staffing decisions will lead to happy clients and an increase in sales. The following false beliefs work against your attempts to maximize client retention. False Belief #1: I am not sure who my top clients are from a financial perspective If you don t even know who your top clients are from a financial perspective, you are starting ten steps behind in the quest to manage you client retention. It is not enough to feel confident in your daily or weekly volume of visits if you cannot pinpoint the clients that are sustaining your profitability. Your database can tell you who are your top clients based on spending metrics. The numbers should lead you to your top clients. If you are using salon business software, run some of the client segmentation reports that highlight who spends the most across multiple categories, like retail or a specific service. A few ways top client metrics are: Total spend year-to-date # of years as a client # of referrals made in the last year Once you have that list of your top 10% or 20% of your clients, then you need to put a plan together to acknowledge their financial vote of confidence. You may want to make sure these clients are identified as special on each visit. Or, you may want to create a VIP program to make it easier for them to continue to spend at their current level or potentially spend more. Copyright 2011 My Salon Scoop, LLC, V. Woods 2

3 The Solution: Regularly assess who your top clients are by analyzing your point of sale data. False Belief #2: I don t need to care about what my clients say about me online. Your clients are talking. Are you listening? You may feel like you are eavesdropping on your clients conversations or subjecting yourself to punishment but do it anyway. If you don t know what your online reputation is, you will not be able to harness the power of your word of mouth. Since your clients have the ability to use their smartphone to write about you online before they even leave your salon, it is important to monitor it. Clients can leave comments on social networks like Facebook and Twitter, online review websites, or local community websites. And of course, all the comments may not be singing your praises. Today, when someone posts a comment online about your business, the word is spreading to hundreds of their friends instead of only a handful in the past. Constructive client feedback online should not be ignored. If you have the opportunity to either personally reach out to a client that had a less than stellar experience or use it to help weigh decisions, it is a win. These grumbles online can cost you money. According to the U.S. Small Business Administration and the U.S. Chamber of Commerce, 68% of consumers have ended their relationship with a business due to the treatment they received. On the flip side, those comments can help you refine your marketing materials. Your own reviews can become sound bites that you can use in your marketing materials to make your promotions more authentic. When you are able to incorporate the words straight out of the mouths of your Copyright 2011 My Salon Scoop, LLC, V. Woods 3

4 happy clients on your website and all your printed materials, you will become a magnet for new clients. When you proactively manage your word of mouth online, you can make either the positive or negative comments help improve your client retention efforts. The Solution: Create a process to monitor what your clients say about you online. Be prepared to take action on what you learn. False Belief # 3: I don t have to ask my clients for feedback. I already know what they like. Being overly confident about your knowledge of what your current clients value is risky. You have too much on the line with your business to just assume. It is best to ask your clients directly. Brief feedback surveys should be a regular part of your business. Sending surveys to first-time visitors or all your clients when you are considering making significant business changes is a good way to make business decisions. You can leave comment boxes at the front desk or you can send out online surveys. Online surveys allow clients to remain anonymous while still sharing good insight on what they think is working well, what needs improvement, or how they would prefer to communicate with you. Asking some of the questions below will help you make operational decisions Ask questions to learn how they would like to hear from you Find out about their online activities (on Facebook every day) Copyright 2011 My Salon Scoop, LLC, V. Woods 4

5 Ask about their involvement in specific activities or organizations. (able to spot trends to help you market to their friends better) What do you like best about the salon/spa experience Find out what other businesses they support in your area What areas can you improve For some of your top clients, you may want to do more than a survey. You may want to consider making these clients part of an informal advisory group. Large corporations routinely turn to their key customers for this type of advice. The Solution: Create a process to monitor what your clients say about you online. Be prepared to take action on what you learn. False Belief #4: I communicate with my clients about what is going on with the business while they are inside the salon. That is enough. Many salons think their retention rate begins and ends by the actions taken when the clients are inside the salon. Obviously, providing a superior service experience does play a large role. However, the savvier salon understands that you can build communication programs that help extend the good salon vibe that you worked so hard to create. You have many options to communicate with clients today. You can send clients offers in the mail, on Facebook, foursquare, or via text messages. On social media, you have an opportunity to share special salon moments, highlight special client accomplishments. You can even show a more Copyright 2011 My Salon Scoop, LLC, V. Woods 5

6 socially aware side of your business by showing your support of charities in your area. Creating a regular communication campaigns is important. For most, will be a very effective way to keep your loyal clients informed. A monthly newsletter gives you a lot of room to include both loyalty offers and new product promotions. More salons are also using text messaging to book last minute appointments, in addition to simple appointment reminders. You can select online tools that allow you to create and schedule and mobile messages to all your active clients easily. Communications outside the salon present a good opportunity to remind your clients of your staff s expertise in hair care. A good rule of thumb is to always share an educational tip while you share details about any new promotion. Remember, one goal of your communication is to continue to prove your businesses value as your clients image management team. The Solution: Develop ongoing marketing campaigns that nurture your relationships as well as communicate promotional offers. False Belief #5: I know that I don t have a retention problem This is probably the most harmful mistake. I have not met a salon that did not have a goal to improve retention. If you run the numbers, you know that for most even a one percentage point improvement in retention can mean a noticeable increase in the top line. The best way to know where you stand with retention is to review your client booking trends over a 30, 60, and 90 day Copyright 2011 My Salon Scoop, LLC, V. Woods 6

7 period to identify your average number of visits per client and to target lapsed clients. You also want to know what your retention rate is for new clients vs. your existing active client base. Last year a beauty industry studies showed that while repeat client retention has been holding steady the last few years at 80 percent, new client retention has dropped approximately 13 percent (showing only 25 percent of new clients are returning for a second visit). Some other metrics that may show that you may need to focus more on retention are: Your clients are booking appointments less frequently You face strong competition by rival salons in your area Clients spend per visit has decreased Client satisfaction has declined The Solution: Use reporting to track metrics that can indicate a retention problem before you see a decline in sales. If you d like guidance in creating effective marketing programs, I invite you to subscribe and read my Ultimate Beauty Matchmaker blog. If you are ready to make a BIG LEAP in your business and the way you that you lead as an entrepreneur, I invite you to contact me and schedule a complimentary Wealth Building Strategy Session. During this session we ll explore your business challenges, goals, and concerns, and the results you d like to achieve for your business. We ll also discuss the services I have to offer and determine if what I do can help you get you where you want to go. Copyright 2011 My Salon Scoop, LLC, V. Woods 7

8 The conversation will take about one hour and can be done in person or by phone. To arrange a strategy session, you can call me ( ) or me (veronica@mysalonscoop.com). Are you ready to make a BIG Leap in your business? About the Author: V. Woods helps beauty businesses attract more happy clients to build wealth. Through her Book Your C.H.A.I.R. Solid (BYCS) System, she guides clients to build a marketing plan centered on their loyal clients. Through her company, My Salon Scoop, LLC, she offers the BYCS System through teleseminars, live workshops, and personal coaching. She also creates customized offerings to suit the needs of ambitious spa and salon owners around the country. She is currently working on her forthcoming book, Happy Clients Count: 25 Ways to Build Wealth for Your Salon Business. For more information about her services, visit her website, Copyright 2011 My Salon Scoop, LLC, V. Woods 8

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