Do you ever scroll through social media and see a stylist who isn't taking new clients or has a 6 month waitlist. WTF! How is that even possible, right. Do you ever wonder what the difference is between stylists who say they have a waitlist or aren't taking new requests and you? It's one beautiful little "R" word that makes all the difference in the world....retention.
I think one of the biggest issues in the industry today is the constant rat race struggle of trying to find new clients. Newsflash, trying to find new clients is a ton of work! It's time consuming, expensive and frustrating. New client consultations are really fun, but also emotionally draining and there is nothing better than walking in to your salon in the morning and saying "oh yay, it's all of my favorite clients coming in today". If you look at your books and are feeling like you've got new gaps that weren't there before, before you try to seek out new clients, I want you to stop and take a look at what's going on within your typical work day right now.
If you've been following me for any length of time, you've probably heard me talk about stylists "bleeding out". This has nothing to do with traumatic finger injuries from freshly sharpened shears or third degree curling iron burns. When I say "bleeding out" I'm referring to the endless cycle of working really hard to attract clients without putting an effort into retention. When retention goes to the way-side, all of the marketing work you do ends up being worthless because you bleed out more clients than you attract and it's a really slippery slope.
When I share the statistic that every stylist loses 10% of their clientele each year the majority of stylists say "maybe that is true for most, but not for me". I challenge you to truly run your numbers and take a look. I think, actually I know, you'll be surprised.
Now check out these two REAL LIFE scenarios of a stylist I coach.....
Stylist A called me and said "I am getting new clients frequently but I feel like I'm not making any more money. What is going on here?"
I asked her to take a look at her new client totals over the last 3 months and she was seeing an average of 100 clients each month and 9 of those clients were referrals . That's a really solid new client count!! Very impressive. There is no reason why she shouldn't be booked solid.
I want to throw some numbers your way to make this more clear.
Let's say she sees 100 clients a month. Averaging that her clients come to see her every 8 weeks means she has a clientele of about 200 guests.
Stylist A said she gets 9 beautiful referrals each month which is great. The average hairstylist retains about 30% of their new clients for at least 3 visits and once you get a client to a 3rd visit, that client will likely stay with you for at least 3 years. That means that of those 9 new clients, only 3 will stay with her longterm. Still great!
As soon as she said she was seeing 9 new clients a month and losing money I instantly knew we had a retention issue on our hands.
She ran a retention report on her existing clientele and she's retaining her existing clientele at the rate of about 80%. This means that each year, 20% of her clientele decides to try somebody new. Now, we will all lose some clients every single year, that is just life, but we don't ever want to lose more than 10%. If she has the clientele of 200 like we mentioned above, this means she's losing 40 clients a year.
If she's getting 9 new clients monthly and retaining those brand new at the industry standard 30%, she's retaining 36 new clients per year.
Do you see what happened here? This stylist is seeing 9 brand new, potential clients each and every month, but her business is actually losing money because she's bleeding out clients. While she gained 36 new clients in the year, she lost 40 so she's at a deficit. If each of those 6 clients she lost had been paying $100 per visit, that is a total of $3,600 lost. Ouch!
Now, if she could improve that retention rate by 10% (90% retention is industry standard), she would have 16 more clients this year than last year for an income increase of $9,600.
The only thing that changed was that in scenario two, she retained more of what she already had. No additional marketing, no handing out extra cards, no paid advertising. She just kept her existing clients happy. It costs 6x less money to keep an existing client happy than to find a new client. That statistic refers to actual monetary cost, but I think we can all agree that the energy and effort spent on new clients is way more exhausting than connecting with existing clients also.
Stylist A is a very talented stylist but she's admittedly put her clientele on cruise control. She does great hair, but she's shifted her focus away from nurturing her clients with things like thank you notes, referral rewards cards, extended consultations and all of the other bonuses that make a great stylist phenomenal.
Generally, there are two reasons why a client leaves: they stop feeling special or they feel like you don’t respect your time. Both of these bad habits can easily start to sneak into a stylists business and it usually happens once a stylist starts to get comfortable. Money is good, referrals are coming in and you think "finally, I can relax a little". I've got good news and bad news; yes, you can relax on the marketing a little but the work done nurturing and developing your clientele has never been more important.
There is a never a time in your career where you get to show up, do good hair, make good money and leave. I'm not sure what industry works like that, but it isn't ours. Don't get me wrong, that can get you by for a while, but it has a short lifespan. Our industry will reward those who make long term connections and relationships with their clients. Our clients think of us as good friends. They confide in us, trust us to keep them looking their best and prove their loyalty with their consistent visits. It is crucial to nurture these relationships and, even though you likely have hundreds of clients, each client who sits in your chair needs to feel like they are your number one priority.
Next week on the blog we will dive deeper in techniques that will help you to improve your retention, but for now I want you to focus your time this week on truly connecting with your clients.