Tuesday, 26 September 2017 14:04

Retention Marketing: Focus on the Clients You Have, Not the Ones (You Think) You Need

Written by   Josh McCarter

Running a service business without an effective retention marketing plan is like filling a bucket that has holes in the bottom. A company with a low retention rate will spend too much time and money working on acquisition to make up for lost business. In fact, it costs six times more to acquire new customers than it does to retain existing customers.1 Furthermore, returning clients tend to spend 67 percent more than new customers!2

So many companies put all of their resources into making the initial sale, only to become complacent and ignore the customer while they focus on chasing more new business. But, what is the point of all the time and money professionals just poured into securing a new customer if they are going to dismiss them that easily?

In reality, a company’s selling has only just begun once they convince a customer to choose them. This fact is especially true for service-based businesses, like salons and spas, who rely heavily on returning customers. Repeat business does not just happen on its own – it takes quality customer service, consistent communication, and timely promotions to get customers to return regularly.

Knowing who the business’ customers are and using that customer data effectively is one of the most important parts of building a loyal customer base. When a customer makes an appointment for a service at a business, they willingly hand over their name and contact information for confirmation follow ups, which gives that business the opportunity to continue engaging with them after their visit. Here are a few ways that skin care professionals can increase client retention using the data already at their disposal.

 

MEMBERSHIP PROGRAMS

Consumers have countless options when it comes to spending their money on services and products, so they need a compelling reason to choose the skin care professional’s business over others. Offering a membership program shows clients that the spa values their loyalty. Loyalty creates deep relationships with customers: 81 percent of consumers say that programs make them more likely to continue doing business with brands.3

Memberships can range from discounts to VIP perks, like priority scheduling and free upgrades. For example, a spa might offer a monthly membership program that gives members one facial per month for a flat monthly fee, plus the ability to get one complimentary skin care product every six months. Lunchbox Wax Salon, a premier salon dedicated entirely to waxing, keeps customers coming back with a points program that offers cash discounts on products. For every 100 points earned, customers receive a one-dollar discount, without the hassle of having to enroll in a special program or keep track of points.

The best membership programs go beyond just discounts; they solve customers’ problems and create a convenient shopping experience. Offering a useful and relevant membership program, however, can only go so far on its own. Consumers have to be convinced of the value the membership provides and be offered the option to join the membership program at a time when they are ready and willing to make the purchasing decision. Professionals should make it easy for clients to discover the benefits of their membership program and remind them of these benefits with targeted e-mails after their visit to encourage them to make the purchase.

 

CAPTURING AND PROMOTING REVIEWS

Professionals should consider how long ago they visited a business without first checking its customers’ ratings and reviews. It has become crucial for businesses to maintain positive customer reviews. A vast majority of people read them before making a purchase decision and a bad review can dissuade customers from even considering a business.

Only five percent of consumers say they have never looked up a local business’ online review and 84 percent of people trust online reviews as much as a personal recommendation.4 These statistics are especially true for businesses in high-traffic tourist areas where customers cannot rely on word-of-mouth recommendations. Seeing a series of positive reviews makes it a no-brainer for potential customers to feel comfortable choosing one business over another with less-than-stellar commentary.

Already have a slew of positive ratings? Play up the positive feedback from clients by capturing and promoting reviews. Display client reviews prominently on the spa’s website and consider incentivizing and managing client referrals to quickly turn existing clients into loyal ambassadors. If skin care professionals are seeing more negative reviews than they would like, they should proactively acknowledge and address the issues in the reviews. Most platforms permit the business to respond to reviews, allowing them to get to the bottom of the issue in question and make changes based on the feedback. This response shows clients that the business is not only listening to their concerns, but also actively making updates based on their needs.

A complaint is a gift in disguise. Ninety-six percent of dissatisfied customers do not complain – instead, they simply do not return to the business without the owners knowing why.5 Leverage review websites to unearth complaints and turn them into the lifeblood of the business. Use these reviews to connect with clients and find another opportunity to satisfy the needs that were not met the first time around.

 

PERSONALIZED MARKETING

Salon and spa marketing platforms use the information professionals collect about their clients, such as visit history and preferences, to determine when to send personalized reminders and promotions that get clients to book again. Professionals should integrate the data they collect every day – such as past purchases, preferences, and payment information – into a marketing software to deliver a personalized client experience.

For example, skin care professionals can remind clients via e-mail when it is time to come back for another visit or advertise last-minute availability via text messaging. Make recommendations for relevant services or packages that they may not have considered otherwise. Using data to create customized suggestions can boost the professional’s bottom line and make clients feel cared for and understood.

 

FOCUS ON CURRENT CLIENTS

There are three main factors that play into client retention: experience, communication, and incentives. First, professionals must provide a full and enjoyable experience, which includes everything from ease of appointment creation and pleasant, thorough service to an updated website and welcoming atmosphere. Make the client’s time at the spa memorable and an experience that they want to return for again and again.

As the saying goes, communication is key. Stay in touch with clients to alert them about new services, location updates, special promotions, and more. Keeping in touch, whether by e-mail or text message alerts, not only helps professionals stay at the top of the client’s mind, but also lets clients know that the professional has not forgotten about them.

Lastly, incentives can always be counted on to bring in business, both new and recurring. Incentives can range from discounts and promotions to perks and exclusive deals. Appeal to the client’s inner bargain hunter by offering rewards for loyal and consistent patronage.

Eighty percent of future profits will come from just 20 percent of today’s customers.6 Instead of wasting time and resources refilling a bucket with holes in it, find the problems and patch them up with a solid retention-marketing plan.

 

References

1 Ayrouth, E. (2013, March 20). Apparently, Acquiring New Customers is 6 Times More Costly Than Retaining One. Retrieved from http://www.business2community.com/infographics/apparently-acquiring-new-customers-is-6-times-more-costly-than-retaining-one-0440403#VfdTkxXO6YspQUDv.97

2 Clark, M. (2017, February 22). Returning Customers Spend 67% More Than New Customers - Keep Your Customers Coming Back with a Recurring Revenue Sales Model. Retrieved from https://www.business.com/articles/returning-customers-spend-67-more-than-new-customers-keep-your-customers-coming-back-with-a-recurring-revenue-sales-model/

3 The 2016 Bond Loyalty Report [infographic]. (n.d.). Retrieved from http://info.bondbrandloyalty.com/hubfs/Bond_Brand_Loyalty_2016_Loyalty_Report_Infographic.pdf?t=1499951340064

4 Local Consumer Review Survey 2016 | The Impact Of Online Reviews. (2016). Retrieved from https://www.brightlocal.com/learn/local-consumer-review-survey/

5 Beal, A. (n.d.). 96% of unhappy customers won’t complain to you, but will tell 15 friends [infographic] | Trackur. Retrieved from http://www.trackur.com/96-of-unhappy-customers-wont-complain-to-you-but-will-tell-15-friends-infographic

6 Lawrence, A. (2012, November 1). Five Customer Retention Tips for Entrepreneurs. Retrieved from https://www.forbes.com/sites/alexlawrence/ 2012/11/01/five-customer-retention-tips-for-entrepreneurs/#3d7bed635e8d

Josh McCarter co-founded Booker in 2010 and has served as the company’s CEO since its inception. McCarter is focused on expanding Booker’s reach through partnerships and client relationships while creating a culture of innovation and excellence in Booker’s offices around the world. He earned a Bachelor of Arts degree in political science-international relations as a cum laude graduate at the University of California, Los Angeles and his Master of Business Administration at the University of Southern California. McCarter currently serves on the board of SpaFinder.

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