3 ways to boost client retention for your salon

Having a client retention problem can spread like a virus through your business. Usually staff retention issues and cash flow problems are not far behind.

According to one beauty industry study, new client retention has been declining. This rate has decreased to only 25% (a 13% decline) across the professional salon industry. This means that for every four new clients that you bring in as a result of your efforts, three say “no thanks” after just one visit with you. For most businesses, this is not sustainable for long.

Here are two stats that should get your attention…

According to the U.S. Small Business Administration and the U.S. Chamber of Commerce, 68% of consumers have ended their relationship with a business due to the treatment they receive and only 3% leave because they move.

Acquiring new customers can cost as much as five times more than satisfying and retaining current customers

For all the discussions of things you can do to attract the manes and hearts of new clients, it is a waste if you can’t get clients to rebook. Forbes Magazine mentioned that client retention, along with employee retention and retail dollars per client are the most important metrics for hair salons. For most businesses, satisfying your oldest, most loyal clients alone will not allow you to stay profitable.

Here are a few things to consider to help improve your client retention for your newer clients:

1) Check the pulse on your retention. You want to have a realistic view on what your retention rate has been over the last 90 days. This will show you the health of your business NOW, not five years ago. When you use an electronic point of sale system, you can find out what your retention rate is by running a simple report. For those of you that still cling to your paper appointment book, good luck doing the math formulas on your own. If you have invested in a business management software package, push yourself to try to learn how to use one new report or function a month that may help you plan.

2) Ask AND take action on client feedback. I usually focus on telling my clients to collect feedback but you have to be willing to listen to what your clients say. Some of the feedback may not cost you any money to implement change.  Weigh the urgency to take action by 1) the value the client brings to your business (not their smile, their spend per year), 2) the number of times you hear the same thing (if 20 people say it, there may be some truth there), and 3) the sales upside potential (are you turning away dollars?). If you take a client suggestion, remember to let them know personally (or better yet publicly) that you are following one of their ideas.

3) Remind new clients about how to connect with you.  Don’t just give 1st time clients a business card when they leave. Let your clients know that your service goes beyond the walls of your salon. Create a simple flyer that shows where to find you on Facebook, Twitter, and your website. Or include this information in a simple thank you card. Tell them to expect to hear about specials and beauty tips from you on a regular basis. This will make them feel more like part of the salon family.

Final scoop

If you are working really hard to attract new clients but you are still running in place from a financial perspective, revisit your retention rates. Make sure that the repeat business that you receive is really enough to keep you in business.

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