How to Structure a Rewards Program to Increase Revenue at Your Salon or Spa
Designing your rewards program for a salon or spa is very different than other types of small businesses. The price point for services is higher. The frequency of visit is lower and retention is usually higher. The rewards program needs to be set up to enhance the customer experience. A level of sophistication is needed in both the ways to earn points and the rewards that customers receive.
Product. Product. Product.
The key to increasing revenue at a salon or spa is the product sold at the end of the treatment or service. Recommending products to add a shine to our hair or a youthfulness to our skin is a great way to upsell the customer at checkout. Set up your rewards program so that customers earn points through product purchases. For every dollar spent on product they earn a point. After earning 250 points, they can redeem for 10% off their next product purchase. The cycle of earn and redeem drives recurring product purchases.
In the spa/salon world, the add-on is a great revenue generator. It can also be the perfect way to earn points as well as a great reward. Customers can earn points for adding an eye lift to their facial, a gel polish to their manicure, or a deep condition to their hair service. These add- ons enhance the customer experience, bring in extra revenue and earn points for your customer. Your customer can then redeem their points for add on services such as a paraffin wax hand treatment during a hair service, a scalp massage during a blowout service or a peel during a facial treatment. The customer is rewarded with a perk to their usual treatment, enhancing their experience.
Repeat visits in a salon or spa occur over a longer span of time than a fitness-based business. Ensuring that a client books their next appointment before they leave is crucial to repeat business. Reward those who book before they leave with points. Businesses should strive to have a pre-booking rate of over 50% and then to increase that percentage quarterly.
Instead of earning points for single service purchases drive traffic to your higher-priced packages. Earning points for high-value services is more profitable for your business and more rewarding for the customer. The customer can then use their points to redeem add-on services or a product discount which then brings in even more revenue.
Salons may want to create tiers or levels of earnings for their customers. Big spenders and loyal customers can achieve a VIP status that enables them to redeem special, exclusive rewards. VIP status can add a level of sophistication to your customer experience and encourage customers on the border to spend more to achieve status.
Many salons or spas shy away from reward programs as they do not want to discount their services. But if you structure your program using these ideas, you’ll increase profit by driving more revenue from your existing customers.