Get With the Program!

Reward your best clients—and boost sales—with loyalty programs.

Quick: How many loyalty cards are you carrying in your wallet right now?

In recent years, a bevy of companies—supermarkets, hotels, restaurants—have cashed in on the client retention that accompanies loyalty cards, but few in the spa and beauty industries have jumped on board. Which is unfortunate, because loyalty programs not only attract and retain clients, but also increase retail sales, client referrals and, yes, even tips!

“Loyalty programs are a must right now; with the economy changing, customers are also changing, and they’re looking for more bang for their buck,” says Pamela DiRenzo-Knight, partner at Studio RK Salon in Fort Myers, Florida. “We also find that our loyalty program further incentivizes staff to provide top customer service.”

While there are obvious benefits to reap, before you leap blindly into a loyalty program, think about this: How many loyalty cards have you stashed away in a drawer and neglected? Because reward programs are ubiquitous, yours can easily get lost in the shuffle if it offers minimal value to the client or becomes forgotten over time. Starting a loyalty program doesn’t have to be complicated, but you do have to commit to implementing, actively promoting and maintaining the program that you select—all while ensuring that new and repeat clients alike recognize its worth.

What’s My Type?

Considering the variety of loyalty program setups, choosing the right one for your business requires some forethought about your clients and their purchasing habits.

Punch cards
Many spas favor punch cards for their simplicity and inexpensiveness. And clients benefit by physically seeing how they’re progressing toward rewards. Cross-marketing is also a snap when using punch cards, notes Larry Oskin, president of spa industry resource Marketing Solutions. Rather than giving, say, a free massage after a client purchases 10 of them, offer a free pedicure or waxing service. Or offer a matching treatment, but with a free upgrade that the guest hasn’t tried, such as reflexology or a paraffin dip. She may love the new service so much that she incorporates it into her regular rotation!

Keep in mind, punch cards are easy for clients to lose or forget and, unless you purchase a one-of-a-kind puncher, people could try to punch their own cards. This set-up may also limit flexibility: For example, if the card is punched per service (i.e., ‘Buy 10 manis, get one free’), how will you reward clients for referrals or product purchases? If you choose to provide punch cards for clients, adopt a clear and simple policy that outlines all of the ways in which a client can earn a card punch—for services, referrals and retail expenditures.

Plastic cards
Credit card–style loyalty cards have the benefit of being difficult to duplicate or transfer due to their magnetic strips. As with punch cards, clients will need to tote them around; however, they offer greater loss protection—your computer system retains the account history—and you can also use them to track clients’ purchasing habits. “Unlike punch cards, these can accommodate different rewards and identify rewards clients have used in the past,” notes Oskin. “For spas that are computerized, having magnetized loyalty cards can help owners to effectively integrate service, retail and loyalty program records, and facilitate targeted email promotions for members.” For instance, if your records show that a client always requests oxygen facials, you’ll know to email her whenever you’re running a promotion on them.

The drawbacks? You’ll have to absorb the cost of designing and purchasing the cards (not to mention replacing ones that get lost), and also invest in a system to read the cards and process transactions.

Software solutions
Some spa owners prefer to do away with cards altogether and simply track clients’ loyalty through software, informing guests of the points they’ve racked up as they check out. You can also go the extra mile by integrating the software program with your website so that clients can log in and review their progress anytime. “Our clients are now more inclined to buy and talk about our business,” says Chantel Gillilan, manager of Brava Hair Studio & Day Spa in Fort Walton Beach, Florida, who uses Salon Iris software. “Our loyalty program really offers guests new opportunities to push their friends in the door.” Studio RK’s DiRenzo-Knight uses both a software system that tracks points and keychain tags, and new guests are automatically enrolled when they come in for a service. Potential pitfalls of software-based systems? Any sort of technological glitches that wipe out your system could also wipe out rewards records. If you depend solely on software, make sure to regularly back up clients’ stored information.

Once you’ve determined the best loyalty program for your salon, give it a special name that will resonate with your clients, suggests Oskin. Seven Salon in Omaha, Nebraska calls its VIP option “Celebrity Status” and Studio RK promotes its club with the tagline, “Savings made simple.” Loosen up and have fun with it. An inventive name is sure to stick in your clients’ minds, making it easy to remember and to use.

The Follow Through

You’ve launched your program, now it’s time to encourage clients to enroll, using some simple strategies. “Create a complete marketing and promotional campaign with fliers, posters and in-salon counter cards to announce the special benefits of your loyalty program, and send a series of email blasts to existing clients,” Oskin suggests. “Ask prospective members to fill out a membership application that gathers contact information, birthday, email address, and favorite services and products.” You may choose to jump-start your program by offering an incentive upon sign-up, such as a percentage off a service or product that the client wouldn’t normally try.

After the initial marketing push, keep your program thriving by catering to both new and repeat clients through your website, emails, Facebook and Twitter. Remember that new clients and regulars require different retention tactics. Once regular clients receive and redeem points, they may start to crave more rewards. New clients may be enticed into becoming regulars during their first visit if you offer points to redeem at their very next appointment if they pre-book on the spot. You should also keep your program at the forefront of clients’ minds by mentioning it on your business cards, ads, menus or any other printed collateral.

Make sure to inform clients of their reward status to keep them hooked and coming back for more. “When we tell a client she’s getting $25 off that day, she’s more apt to purchase that retail product she’s been meaning to try, or tip the service provider a little extra,” DiRenzo-Knight says. “And when you tell someone, ‘Spend $X today and receive your $25 reward,’ the program turns into a great up-selling tool.”

Similarly, if you notice that a client hasn’t come in for a while, you can send an email that reminds her how many points she’s already accumulated, which may encourage her to return. During slower periods, offer clients double loyalty points for a given month or week. And if you have a new product in stock, promote it by telling clients: “Buy this product and get extra points for a limited time.”

The goal is to make your guests feel special, and nothing says “thank you” more effectively than a reward. Used correctly, loyalty programs are a powerful marketing tool that can help you influence purchases, cross-market within the spa and fill appointment slots during nonpeak times.

“Guests are so appreciative when you recognize them,” DiRenzo-Knight says. “There’s nothing like that smile on a client’s face after you tell them they’ve just earned their next reward.”

SIDEBAR: How Do They Do it?

Spa owners with profitable loyalty programs share insider secrets to success.

“For every service received, clients earn 25 points—with 10 additional points each time they pre-book (plus entry into a $100 gift card drawing)—and 15 points for every retail purchase. If a client suggests us to five of her Facebook friends, that’s another 25 points. Everyone jumps on it to the point where we have a backlog because Facebook allows us to add only so many at a time! Even clients who are hesitant to give out their email addresses are more likely to do so when we offer them 10 points. But the biggest push we do is for new clients: We offer 100 points for referrals. Our guests absolutely love our loyalty program because they get free products and services, and for us it’s simple to follow with a program that tracks points.”
—Chantel Gillilan, manager of Brava Hair Studio & Day Spa, Fort Walton Beach, FL

“We use our loyalty program to encourage purchasing series of treatments. If the client buys five of any service, the sixth is always free; if she buys two, the second is 20% off. It’s free for clients to enroll, and when they refer a friend, we give 10% off the friend’s first service and 10% off that client’s next service. We also regularly offer our loyalty program clients product samples. The program increases profits and keeps guests happy.”
—Eljona Kasneci, concierge at Jeunesse Spa and Salon, New York City

“Our program’s called A•Glo Points. Every dollar spent earns one point, and at certain levels the points can be cashed in for gift cards. For example, 5,000 points garners a $75 gift card. A client’s receipt shows how many points she earned for that transaction and when they expire (the points are good until the end of the following year). This is a great way to say ‘thank you.’ But, as I learned, a loyalty program requires a lot of forethought; I’d suggest starting small and adding new ways to earn points annually. Also, don’t be afraid to offer huge points for referrals—it’s worth it to attract new clients.”
—Allan Newell, vice president of A•Glo Spa & Salon Co., Janesville, WI

SIDEBAR: Before You Begin

A loyalty program, though ideal in the spa setting, is also a serious commitment. Lois Geller, author of Customers for Keeps and Response! The Complete Guide to Profitable Direct Marketing and owner of Lois Geller Marketing Group in Hollywood, Florida, offers some thoughts for spa owners to consider before they begin a program.

1. There’s no turning back
Once you launch a loyalty program, it’s difficult to cancel. People may come in with the card years later and still want it honored. Meanwhile, your customers will begin to think that your program is an entitlement, not a reward. They believe they’ve earned those points, so if the program expires or is canceled, your clients get upset. In that respect, these programs need careful consideration.

2. Watch your bottom line
There are real costs connected to any loyalty program. You may think a punch card will cost you very little, but you still need to pay to print them and award the free service. Plus, it takes time to explain the program, handle complaints if someone loses a card, etc. And software programs require considerable data entry—someone will have to input client information with email addresses and service history. You may not have the personnel for this. Finally, if there’s a question or disagreement from a client about her reward, you’ll have to assess whether it’s worth the time to research, or if you should just give her what she requests.

3. Gauge the true value
Obviously, once your program has been implemented, you need to measure and analyze the results. But how will you do this? Your system should include an accurate way of determining outcome. Once you’ve quantified your findings, ask yourself this important question: Are you building “share of customer”—i.e., is the client now spending more money with you? If not, your program could use some tweaking.

Tracy Morin is a freelance writer based in Oxford, Mississippi.