What is it about the word "free" that makes us so excited as humans? It always does and we'll totally take a handful of things that we don't even need as soon as it's labeled free. How about when there is a free gift with purchase or when you spend a certain amount? Love that!!
I want you to stop a moment and think about what we as consumers love so much about stores like Sephora and Ulta. If you don't shop there let's slot in places like Target, Safeway, Yogurtland, Costco, Starbucks. Are you addicted to any of those? All of those stores have rewards programs in one way or another and I bet you are enrolled in at least one of them. I'm enrolled in every single one so this is me speaking from experience! I get so freaking excited when Sephora gives me a handful of samples I may never even use or when I get $3 off at Ulta after spending $100. I drive across town to hit Target and Costco because they both offer me cash back on all of my purchases. They are a pain in the a** to get to, but I'll go to both because I'm loyal to their savings. See where I'm going with this?
The vast majority of successful retail businesses offer rewards programs to gain brand loyalty because we as consumers are suckers for "free". No matter how much money we have in the bank, we are all looking to save a dollar here or there, or better yet, earn a free gift every couple of months. We will actually forgive a poor experience every once in a while because we aren't willing up to give up the unique perks that certain businesses offer.
As a hairstylist or salon owner a rewards program isn't optional, it's essential. If you don't already have a program in place I want you to make it a priority for your business in 2016. Consumers are actually demanding rewards in exchange for loyalty and we need to give the people what they want. Rewards create retention and give you the upper hand in your market. Very few salons have rewards programs in place and in a crowded industry it is your job to set yourself apart. Great customer service, excellent hair color, perfect styling and precision cuts are the standard now. Nothing about any of those things are special anymore and good hair is just the standard. To earn client loyalty in today's market we have to try a little harder than that.
Some salons do have rewards programs in place and that is awesome! I want to offer a slight shift in your program if you haven't already done so. I want you to start rewarding for behavior and dollars spent instead of for volume. Most salons and stylists set up rewards programs that are something like "Get 4 haircuts and earn the 5th one free". Or a punch card that says "Purchase 10 pieces of retail and get 20% off your next purchase or a free bottle of shampoo". Both won't get you as far when it comes to loyalty and certainly won't increase your income. When we look at the haircut example, it's basically like take a 20% paycut because overall that is what you'll lose. I can't afford to lose 20% of my income! That's a lot of money. I will also never, ever suggest giving retail away for free. It is like throwing money down the train and makes your retail actually feel valueless to your clients in a weird way. Crazy, but totally true I swear.
I prefer a method where are rewarding clients based on behaviors and spend. If we can get our clients doing more of the things they AREN'T already doing naturally, that is where the magic happens.
Behaviors to reward:
- Purchasing retail
- Pre-booking appointments
- Purchasing conditioning treatments
- Purchasing gift certificates
- Service dollars spent
- Social media sharing
We basically want to reward the behaviors that we want to see more of. It's like saying "I like it when you pre-book your appointments, so if we can just put something on the books today you'll earn 100 points". That isn't the verbiage you'd use, but you get it. If a client posts a picture with you on their Instagram before they leave and tags you in it, maybe you give them points. The client doesn't have to spend a dime to earn loyalty points and that is really appealing to them and you get them doing all the things you want them to do to grow your business which is a real win for you.
Rewarding guests sounds awesome! Great. So how the heck do we do that? Well, there are a few ways you can do it. A punch card does work but some clients just don't want to carry punch cards. They really do work, but you'll have to deal with lost cards etc. Apps work great too but there is a cost associated and, for me, I don't download a single thing to my phone. I have no games, no rewards apps, just business for me and I'm not alone in that. I will actually be launching a rewards system blueprint when Thrivers Society re-opens later this year that will make the process easier for both you and your client!! Current Thrivers: get excited for the new system I recently discovered that another stylist is using with great success!
Once you have your rewards system in place we want to offer rewards that are enticing to clients without giving away our income. I really believe at currency type of rewards system is best for everybody. Rewards are earned and then the client in a sense can chose how to spend them. Generally, most major retailers reward at a rate of between 3%-5% (further proof that get 4 hair haircuts and the 5th is free is too generous)
I really like a points or punch system that rewards retail purchases at the rate of about 5% and services at the rate of 2%. Its enough to be exciting without crushing your bottom line. Basically, for every $100 spent on retail the client would earn $5 in rewards and for every $100 spent on services they earn a $2 reward.
When clients are cashing in points, they can be used towards retail purchases, services, treatments or a hybrid of all three. Incorporating partner certificates can be highly effective as well which is something we cover in Thrivers Society too.
How you setup your program will depend largely on your demographic and clientele. There are some rewards mistakes that don't get you anywhere:
Giving away bottles of product-As soon as you hand over a bottle of anything for free, it is instantly devalued. Now, if the client earns enough points that they choose to redeem them towards a shampoo, it is different. They are making the choice and spending their points that way, but we never say "wow, you have 100 points so let's get your free shampoo". Don't do this for referrals and don't do this for rewards programs.
Giving away services-Giving away services on the regular is just too much. If you just heard my interview with Shannon Keel (love her by the way) she mentioned that she did her free haircut for life promotion which was amazing!! That wasn't a rewards program though, it was a marketing campaign. There is a huge difference so don't get it twisted.
Launching your program and letting it ride-Like anything else, you need to talk about your program every single day if it's going to work. Make it a part of the close of visit. You bring up pre-booking and you say "and let's take a look at your rewards points today". This all happens right before you give a couple of your business cards for your clients to pass along to their family and friends. Sounds like a lot, I know, but once you streamline it as part of the process, you will adjust and your clients will see you as more professional I promise.
I don't know about you, but I love rewards programs and brands certainly earn my loyalty by using them. Grab a notebook and start brainstorming your rewards ideas. When you are ready to launch, be sure to create a sign at your station and do an email blast to get your guests excited!