WEB EXCLUSIVE: Win-Win Rewards Programs

Spa pros offer insight on how they reap the benefits of rewards programs.

iStockphoto.com

When it comes to the issue of attracting and retaining clients, many spas are choosing to ignore those oft-maligned “daily deal” websites and instead seek out more creative marketing avenues. As a result, programs for membership referral, rewards and loyalty are becoming increasingly popular, in turn leading to a growing roster of spa-goers who are happy to be getting a “little something extra” in return for their enduring patronage.

“These programs are vital to any spa’s business strategy," says Felicia Brown, owner of spa marketing agency Spalutions!. “They’re a great way to generate repeat visits, increase revenue and foster a long-term relationship with your clients.”

Although loyalty programs come in many forms, Brown says one singular rule applies: keep it simple. “Make the programs easy for clients to understand,” she advises. “For instance, automatic enrollment is a great start. But most of all, be sure the structure makes sense for your business.”

Are you seeking to implement an airtight loyalty program that will motivate your clients to keep coming back for more? Get inspired by the following spas that have reaped the benefits of rewarding their regulars.

The spa: Infinity Day Spa in Crystal Lake, Illinois

The programs: Infinity’s loyal patrons are recompensed via two programs: a Referral Program and a Rewards Program. In the Referral Program, every new spa guest who signs up receives 50%-off referral cards to give to their friends who sign up. “It's a great way to attract and retain new clients,” says owner Robin Jones. “The initial discount gets them in the door, a $75 thank-you card for referring friends brings them back a second time, and then, of course, three time’s the charm and they’re yours forever." The Rewards Program is based on a points system. Clients receive one point per service or retail dollar spent, 200 points for pre-booking their next appointment and 500 points if they refer a friend. Rewards start to kick in at 1,000 points—at this level the client receives a $10 gift card—and go up to 7,500 points, at which point they get a $100 gift card.

The marketing: “We promote our loyalty programs via regular email blasts and by participating in local functions, such as running events and nonprofit fundraisers,” says Jones. “For us, interacting with clients is the best marketing strategy, as opposed to sending out mailers and flyers. It’s all about word-of-mouth.”

The results: “In our experience, these initiatives have been very successful and have helped keep our existing clients happy and loyal, and generate new business,” says Jones. “Thanks to these programs, we’ve met our revenue growth goal of 10% to 15% each month.”

The spa: Jinsei Spa in Bend, Oregon

The program: The Jinsei Spa Rewards Program awards points to clients for each retail purchase, spa service, pre-booked appointment and friend referral. Points can be redeemed once clients achieve a balance of 200. “I wanted to develop an effective system that would counteract the daily deal sites, which I don’t believe help a spa’s bottom line,” says owner Katie Knotts. “I was looking to reward our regular clients through a consistent loyalty program that I, as a consumer, would be interested in. We make it easy by automatically enrolling our clients upon their first visit.”

The marketing: “We avoid paper marketing materials, and opt instead for emailed reminders of our offers and programs,” explains Knotts. “Our front desk employees also talk up the program, as well as our spa practitioners, who discuss it when a client is booking or checking out. We also have information on our website.”

The results: “We wanted to promote a long-term relationship with our clients and I believe we’ve achieved that through this rewards program,” says Knotts. “We’ve seen a substantial increase in guests pre-booking at checkout since we implemented it, as well as a boost in revenue and client retention rate.”

The spa: Milk + Honey Spa in Austin, Texas

The program: The spa’s VIP Program is a points-based system that distributes so-called “milk money” to clients after they’ve accumulated 50,000 points from services and product purchases. When they hit that mark, a $40 credit can be used toward any service, product or gift certificate. “We view this as a long-term strategy,” says co-owner Shon Bayer. “In developing the program, we realized there would be expenses associated with it—for instance, educating staff about the system and printing materials to leave at the checkout desk and in locker rooms. However, we knew by investing in it, we’d also save on having to market ourselves to new clients, as we’d be filling our books with repeat clients, which is what our business plan is based upon.”

The marketing: “We promote the program on our website. In addition, part of our front desk’s checkout protocol is to remind spa-goers what their VIP point balance is—and it’s also printed on their receipts. If it’s their first time at the spa, they’re given a short explanation. When they first join our mailing list, we have a couple of automatic emails that get sent out and one of them is focused on the VIP program,” says Bayer.

The results: "When you’re starting a spa business, it takes a long time to fill your books, and marketing can be very expensive,” explains Bayer. “When we began, we spent 5 to 10% of our revenue on marketing. Now, thanks to this program, we spend less than 1%. Clients love it and it gives them an incentive to pre-book, which is a huge factor in driving business. Our pre-booking rate was about 10% before we instituted the loyalty program. We now hover around the 30 to 35% range. It’s a remarkable change, and our clients get really excited when they receive their ‘milk money’!”

The spa: Studio RK in Fort Meyers, Florida

The program: The spa’s Loyalty Club rewards clients with a $25 gift card for every 750 points earned. Clients are automatically enrolled on their first visit and earn one point for each dollar they spend and for referring new clients. In addition to using the rewards to buy services or product, Loyalty Club members also have access to special VIP nights and spa giveaways. “It’s nice and simple,” points out owner Pamela DiRenzo Knight.

The marketing: “Every new client receives a guest bag with details on the Loyalty Club and offers relevant to their future appointments, which helps us promote pre-booking,” explains Knight. “We also advertise the program on our website and our front desk staff and stylists incorporate it into conversations with their clients.”

The results: “We started the program in 2008 when the economy began declining,” recalls Knight. “Although we were blessed in that we never experienced a dip in business, we did start to plateau. In an effort to nip any problems in the bud, we implemented the program, which was instrumental in keeping us busy. Guests were willing to spend more to accumulate points, and we were rewarded with an increase in revenue as well as client retention. We’ve grown consistently every year since, and I firmly believe it’s partly due to the Loyalty Club.”

Carrie Borzillo is a journalist and author based in Los Angeles.