May is Salon Month here on the Signpost Local Marketing Blog! This means that in addition to our usual posts with tips on connecting with customers, marketing strategy, and growing your business, we’ll be sharing insights specifically for local salon professionals. If that includes you, it’s time to polish up on these proven promotion techniques. If not, don’t worry, we’ll still be sharing our usual resources that can help you effectively market your local business. And keep your eyes peeled, your industry might be the one we feature next month!
Referrals are the best gift a business owner can receive. Unfortunately, far too often they’re treated as just that, instead of a customer acquisition technique that requires its own strategy in order to be truly effective. Comprising 65% of all new business, referrals are also 4 times more likely to buy than other prospective customers. With such valuable prospects, it’s even more important to think through the entire process from start to finish, so you can encourage your customers to take various actions throughout. You’ll find that when you cultivate a referrals mindset, you can drive even more business by leveraging your existing customers. We’ve outlined the best way to start the process, along with tips for asking and creative campaigns to drive more referrals.
Calculating Customer Value
First, it’s important to evaluate the value of your average client. Dive into your customer data to answer the following questions:
- What is the typical purchase amount?
- What is the typical purchase frequency? (How often do they come in?)
- What is the typical customer time period for repeat business? (How long do they keep returning?)
Use this to determine incentive discounts
Once you’ve answered these three questions, you can calculate your average customer value. For example, if most customers spend about $50 on each visit, come in once a month and remain loyal for 5 years, then their lifetime value (LTV) would be $3000. Knowing how much a customer is worth to your business helps inform a sustainable referral strategy. Surprisingly, too often salons are too stingy with these incentives, and they fail to motivate clients to act. It should be greater than 10% off their next visit, because when they introduce a friend or family member to your salon and this new customer follows in a similar pattern, then that referral has generated an additional $3000 for your business. So, if you do decide to go the discount route for your referral program, do make sure that it’s substantial enough (a $50 voucher for services, free manicure, etc.) to motivate customers.
Incorporate referrals into your current loyalty program
If your salon already has a loyalty program, you could have referrals count towards these established goals and reward levels. If you use points systems, a referral could be worth 50 points, or could bump a customer up a tier, depending on your program’s structure. Just be sure that it is easy to understand, track and redeem these rewards, and again, that the award level (points, tiers, etc.) are significant enough.
You can also turn the act of referring family and friends into a contest. Hand out coupons or cards with a new customer offer to your existing customers. Have them write their name and contact info on them, and give them out to friends and family. Keep track of the coupons that get returned when performing services, and whomever refers the most new customers gets a prize at the end of the month. Whether a prize pack of favorite pampering products (nail polish sets, tools, lotions), a full day of pampering with spa treatments or something entirely different, select something that feels substantial and special so it’s worthy of the extra work clients have done to promote your business.
Turning new customers into advocates
It goes with out saying (but we’ll say it anyway, just in case!) that ensuring a great customer experience is the cornerstone to your referral strategy. You should think about the complete customer journey from the time they make their appointment, through the follow up post-appointment in terms of various touch points and opportunities to connect with the customer and drive repeat business.
You should record their contact information when they call to make an appointment or book online. This way, you can send them email and text message reminders, along with tips on how they can prepare for their upcoming appointment (“Don’t forget to wear flip flops when you come in for your pedicure!”), as well as after, “Apply an extra layer of top coat today to keep your manicure looking its best!”. These reminders are helpful and prove your commitment to customer service.
You can also think about giving them a small welcome gift. Something along the lines of a branded nail file will keep your business top-of-mind. If you put it in a small giftbag, be sure to include either business cards or referral coupons to pass out to friends. Explain the system and any reward structure you have in place, and tell them that they must be used before the end of the month to motivate them to act while their positive experience is still fresh in their mind. This expiration date also improves the likelihood that their family and friends will get to see your work looking its best.
Who gets the reward?
This is completely up to you. Some business offer current clients a reward for bringing in new business, as a thank-you, while others prefer to offer new customer discounts to those referred by friends and family to further motivate them to complete a purchase. Typically, the most effective programs reward both parties, which encourages the current client to keep sending referrals your way, and sets a good example for your new customer. If you’re able to win over these new referrals, and turn them into repeat clients, this sets a good example for them to refer their own friends and family.
The great thing about referrals, is that you can ask any happy customer. The important thing to remember turns out to be the most simple: Remember to ask. Despite 83% of customers reporting they’d refer friends and family to a business following a positive experience, only 29% actually do. It’s great to start planting the seeds early on, as long as you’re not too pushy about it. This is why we love pairing referral coupons with a welcome gift.
If you’re looking to start with an engaged group, try following up with clients who have reviewed your salon on third-party review sites like Yelp, Facebook, Google My Business, etc. These are your most easily-identifiable advocates. They’ve taken the time to sing your business’s praises, on their own free will, so chances are they’d be receptive to referring others. Send them a personal thank you for reviewing your salon, and offer a small token if you wish as a thank-you. Then, take the opportunity to put your new referral program on their radar. Outline the process for making and tracking, and be sure it’s easy to understand.
As a reminder, Signpost’s AI-driven technology, Mia, does this all for you. Mia identifies your advocates and targets them to drive more feedback, five-star reviews, referrals and repeat business. automatically.
Use events (and partnerships) to drive referrals
Event marketing is a great way to expose new clients to your work. Try hosting “bring a friend” nights where anyone who has a friend tag along gets a special discount for them both, or encourage them to bring a bottle of wine and provide glasses and light snack pairings. These could be planned in advance and made special by various creative ploys, or be used as a tactic during slow days.
The next time you have a lull, try sending out a SMS blast, which has amazing engagement rates in terms of read rate and for the fact that they’re usually read almost instantly. Offer a 2 for 1 special or some sort of promotion that will get more people in, while also getting a chance to meet new customers. If you have some light bookings scattered across the day, you could alternatively try targeting those customers with a promotion that will encourage them to bring a friend in need of a manicure.
You can host events that teach tips and tricks for nail maintenance, or provide more information about newer treatments, so that clients better understand the benefits and help your technicians upsell them during their next visit. Encourage (or make it mandatory) to bring a friend to these. Try partnering with other salons or boutiques in your community to show how they can complete different looks or replicate their favorite trends of the season. If you do collaborate with partners, be sure to include their materials (any gifts, as well as business cards or referral coupons) to help drive referrals for them as well. Serve light refreshments, and either lead these workshops yourself, or invite representatives from various beauty supply companies to come give tutorials.
Be sure to take photos and videos for your social pages, so that your followers won’t want to miss the next event!
It’s no surprise that taking to social media is a great way to drive referrals and word-of-mouth marketing, however it can be difficult to track. Encourage clients to post photos on their favorite networks, and run various social contests. Have clients take a photo of their nails while they’re still at the salon (and before they have a chance to chip or smudge!), and tag your business. Feel free to include any special hashtags or other criteria that you feel will enhance the results. At the end of the month, the post with the most likes will win a prize or free service!
And don’t miss out on these creative ways to boost referrals!