Not having client retention tactics in place is like having a boat with a hole in it that you refuse to patch. What is your spa’s client retention rate?
You’ve gone through a lot of trouble to create a wonderful spa environment. Your spa is beautifully decorated, your staff is well-trained, and your marketing plan is bringing in new clients. It costs a lot to keep that cycle going.
Did you ever think about how you could offset those costs if you could improve the retention rate of your existing clients?
Think about how the mobile phone companies have all of those great offers for NEW clients. Yet you have paid them a huge chunk of change every month for the last five years, and what do you get for that?
Pretty much nothing.
Your spa’s clients may be feeling the same way: unappreciated. Especially in a spa environment, where building a rapport with guests is key to success, there must be a plan in place to keep guests returning to your spa, instead of sending them to the numerous competitors that you may have. Here are a few proven tactics.
Implement a guest welcome strategy for your spa.
The first thing to do is have a plan to welcome new guests into your “family,” and make them feel special. Your spa software should allow you to flag appointments of new guests in a particular way, but unless your staff is aware and taking action, nothing will happen. Train everyone, not just customer service staff, to take special care of new guests; show them around the facility, go out of your way to say hello, smile, ask if they need anything. Use their name as often as possible and appropriately.
When the new guest checks-out, your retention-building efforts should swing into action. Studies have shown that the likelihood that a guest will continue to do business with you increases exponentially on and after their third visit to the facility. A yoga studio that I frequent has this down to a science; at the conclusion of the first class a new student completes, they are presented with an envelope with their name on it, containing information on the studio, the class schedule, and a voucher that allows them to take unlimited classes for the ensuing week for a set price of $25 (regular drop-in rate is $17). For cost-conscious consumers, like the friend that I brought with me last week, that is a compelling deal.
My friend went back the next day and will go again within the week, and therefore she is much more likely to continue to frequent the studio. The key is striking while the iron is hot. For spas, a similar offer would be to give new guests a voucher for a promotionally-priced service on their next visit, and perhaps an even larger promotion on a service or retail item for the third visit – and those next two visits should be within a six-week period.
A client who visits the spa three times in a year doesn’t help the business as much as someone who comes three times in two months, so make sure you put an end-date on promotions.
Add new clients to your spa communication channels.
After that first visit, when the client has been welcomed into the spa family, be sure to add their email address to your database, after getting their permission. Let them know that you only send a monthly newsletter with special promotions for existing clients only and that you never share your list, and you should not have trouble getting them to participate.
Loyalty or rewards programs are another excellent way to encourage clients to consolidate their purchasing with your spa business. Let them earn points for each purchase, whether services or products; 10 or 100 points to the dollar spent is typical. Look at what a “good” client spends in a year, and set a threshold for the redemption of those points, say after they’ve amassed 7000 points, which would likely be after about six visits. You can also use the points as leverage to encourage specific behaviors; double points on Tuesdays, or for appointments before 11 am, for example.
Social media provides the perfect way to continue a dialogue with your guests, well after their service has been rendered; frequent posts or polls on Facebook, compelling imagery or recipes on Pinterest, and fun photos of happenings at the spa on Instagram keep guests engaged at the level that they choose; just be sure not to inundate them.
Schedule your client’s next spa appointment before they leave this one.
When the guest checks out the first day, with their Welcome Bundle, that is the time to ask them if you can book their next treatment before they leave your spa. Pre-booking is an activity that can also carry reward points to encourage participation, and it develops that beneficial habit in your guest.
You’ve heard the statistics; it costs 7 to 8 times more to snare a new client than it does to keep an existing one. Imagine if every client you serviced in a week made a return appointment; you would be able to put a lot less money and energy into prospecting for new clients. This is doubly beneficial since “regular” clients know how it works at your spa. They do not need a lot of hand-holding or client care, and so, not only do they bring in more revenue but they cost you less, as well.
If you put some of these efforts into place throughout your spa, you will certainly see a client retention rate that is steadily increasing, along with your bottom line.
For more ideas, read Guest Checkout That Maximizes Retail and Retention.
Is social media now just about bargain-hunting–sharing discounts, steals and deals with your friends? We know from past studies that discounts do not lead to loyalty. They lead to the expectation of more discounts. Which means, that shiny new customer will linger only if you can undersell your competition. Where’s the so-called wisdom of crowds? It appears to be circling the discount drain.
When it comes to saving money, the wisdom of crowds looks more like the mojo of mobs. To those of us who have enjoyed being “value add” artistes, creating differentiated experiences for discerning guests, the whole thing just looks like a hideous tag sale. High overhead businesses are being thrown onto the bus alongside their bargain basement counterparts, heading down the road to dusty, hardscrabble Camp Discount. The only activity at this camp is a pitiless game called “How Low Will You Go.”
Pitiless, because the companies who are inflicting this torment on us bricks-and-mortar fatties are internet marketing creatures. They have sweaty crushes on their “users” but throw spitballs at the very businesses that are providing the value that endears the users to them. They also have an unfortunate tendency to tell businesses what’s good for them, as if they actually know. And it’s a word I’ve heard a lot: “Exposure.” As I like to say, you can die of exposure.
“It’s your job to retain them,” discounters tell you. Gosh, your only challenge is to make them happy, and they’ll gratefully morph into a loyal, full-price client. Riiiiiight. And the next month, there’s your competitor on Groupon, with a deeply discounted offer. But, if we’ve done our job right, they’ll stick with us. Riiiiight.
The discountante lives for deals. She doesn’t want to bond with your business. She wants to flit from flower to flower, yelping the entire time. Remember, these are the kids who grew up with the concept of “friends with benefits.” Commitment isn’t in their DNA.
But consumers are not the only group out there with some clout. Small businesses scored a victory this week against a user-worshipping company that’s been easy to hate. That’s right, Yelp was squirming this morning as the hot breath of a lawsuit by businesses tickled its backside. They were accused of manipulating ratings based on whether a business advertised with them or not. Frankly, I don’t think Yelp was misbehaving, but I think it underestimated the venomous hatred they’ve inspired in legions of small business owners.
Yelp announced that we’ll be able to see those positive reviews they deem so un-Yelplike (the one-off rave that your client wrote, just for you, which in the past would disappear after about 90 days.) They’ll just be hidden away in a little basket labeled, more or less, “suspect.” Yelp has been trying to walk a very fine line, torn between appearing to pander to users while attempting to convince businesses to give them advertising revenue.
You’ve probably noticed, Yelp has made more and more of their business services free, a positive step that has helped many businesses make peace with them. If you’re not using these free tools, you’re really missing out. And whether you like them or not, Yelp is boosting your search rankings thanks to their their heavily trafficked site. (I know, I know, you almost picture yourself standing there while you’re being slapped across the face, mumbling, “Thank you sir, may I have another?”)
Fitting right in with the current mania for vampire chic, discounters like Groupon and their ilk are feeding off spas’ desperation to fill their schedules. They’re causing quite a stir, but in this case “stir” may just be another word for “churn.” I’d love to hear from spas who have been able to attract and retain guests using this type of program. Please contact me firstname.lastname@example.org and share your stories.
Our experience with Spa Week at our own spa suggested that the folks who jumped on this promotion were, by and large, geographically unqualified to be regular spa guests. A year later, not one guest who came to us through this promotion was retained. And a couple of the little darlings left us unpleasant souvenirs in the form of snarky Yelp reviews. (Cheap and ungrateful–a winning combination.)
Compared to our normal retention rate of over 30%, this was a glaring example of the destructive nature of D-bombing. Aggressive promotions can create volume, but that volume may simply be churn: money-losing “volume” that saps your customer service resources and puts your regular guests in the back seat.
The jury is still out on Spa Finder Deal Days, until we see the 90 day retention statistics. Even Spa Finder feels compelled to embrace the discount mindset, but they promised a more retention-oriented promotion. I’m not sure how they engineered this, but time will tell if they hit the sweet spot. Participating in the heavily-discounted Deal Days while not accepting Spa Finder gift cards for the promotion, alas, created some pretty awkward moments with customers for many of us. We’re not sure how Spa Finder could rectify this in the future. We had much lower turnout than with Spa Week, but hopefully they were higher quality guests. Time will tell.
I haven’t written off Groupon yet, but I can tell you after two-plus decades in business, I’m dubious about their claims. They’ve graciously offered to put me in touch with some spas that have been happy with their results. I look forward to seeing the retention numbers and reporting back to you!