Wednesday, 12 June 2013

Boost Your Nail Salon or Mobile Nail Business with a Loyalty Program!

Everybody who invests time, energy and money in a business wants success and those who work in the nail industry are no different. So whether you run a nail salon or you’re a mobile nail technician most of us recognise the importance of growing our nail businesses to a sustainable level as quickly as possible. This is usually accomplished by growing the number of happy satisfied clients on your books and then more importantly retaining them!

An Example of a Customer Loyalty Card. Courtesy of Georgina at FancyFingers.me.uk 

Retaining Your Nail Clients

I can assure you sure that retaining customers by nurturing and developing a loyalty to your nail business is a lot less effort and costly than looking for new clients! So how can you achieve this? After all we want to spend our time delivering beautiful nails, not looking for new customers.

This article examines a simple and cost-effective method to keep hard-won customers that is proven to pay back dividends – “The Customer Loyalty Scheme”

You’re Nail Business & the Local Competition

It’s fair to say that there is a lot of competition in the nail industry. So how do you not only keep you existing clients but at the same time grow the numbers on your books?

The answer is simple. Stand out from the crowd. By differentiating your nail business, its range of services and importantly levels of customer service from the local competition you’re already be well on the way to running a successful nail business.

Identify Your Local Business Competitors

Let’s start by breaking the problem down. Nail and nail art businesses are geographically limited to the amount of clients that they can potentially serve. In terms of a nail salon it’s the number of clients that live within an acceptable travel distance to and from the salon premises and in terms of a mobile nail technician it’s the number of clients that live within an acceptable service radius where the nail tech is prepared to travel and work.

With a potential client base broadly similar for both you will have any number of local nail and beauty businesses all vying for their share of the local market. In either case (and thankfully!) you only have to concern yourself with those nail salons and mobile nail technicians that work inside your service area.

So who is your competition? A little homework using the internet and your local business directories will help you establish who your local competition is, where they’re located and even what services they offer. You will probably be quite surprised at the number of local businesses that offer similar nail services (and prices) to your nail business. All this information is useful, but....

How Many of Them Run a Client Loyalty Scheme?

You’ll be surprised that it’s probably not many and this is something that you can take advantage of.

So What is a Client Loyalty Scheme?

Basically, a customer loyalty scheme or program is a way of rewarding, or giving back to your regular and loyal clients in return for all the business that they have given you. For example, you might give your frequent customers every fifth manicure, shellac treatment or nail art a fantastic discount or in some cases for free.

What Are the Benefits of Running a Client Loyalty Program for My Nail Business?

Remember it’s all about fostering a client/business relationship, retaining your clients, growing your client list and differentiating your business from others. Four immediate benefits spring to mind so let’s expand on these.

  1. It keeps your hard-won nail clients happy (and loyal) with a reward that encourages future bookings and regular nail maintenance. Think about it. Who wouldn't like the thought of a discounted or free nail appointment?
  2. It’s persuasive. Running a loyalty program is an excellent Unique Selling Point (USP). It’s an added positive that you can mention when a new client calls about a nail appointment. Clients love the idea of discounts or free services.
  3. It promotes positive ‘word of mouth’. Your existing clients may mention you have a loyalty program to friends. After all personal recommendations through word of mouth are arguably the most powerful and effective marketing you can get.
  4. A loyalty program is something you can promote in your existing advertising campaigns including your service literature, website and even your face book and Google+ pages.

How to Run a Customer Loyalty Scheme for Your Nail Business

You’ll be glad to know it’s actually quite easy and hassle free. The issue is - How do you keep track of clients loyalty entitlement? There are many approaches, but here are a couple of ideas that are inexpensive and have certainly worked for me.


Punch Cards - Design a punch card. Every time your client visits you for a nail appointment you simply mark the card with a stamp (less risk of forged claims), initial or sign it. When the card is full your client can claim their loyalty reward on their next visit.

Reward Coupons - Design a discount coupon, which you can issue when your client qualifies.

Electronic Swipe Cards - This tends to be more expensive and used in larger nail salons and nail bars.

Whichever you choose include your company logo, name and contact details on the reverse. Ensure the card/coupon is the same size as a standard business card and get them printed professionally. There are two reasons for this.
  1. There are lots of companies that print full colour double-sided business cards so you can get lots of good deals everywhere.
  2. The card will fit conveniently in your client’s purse and so won’t get lost.
Whichever way you choose, both methods look professional and your client is left with something tangible to remind them to come back to you.

Will Running a Loyalty Scheme Cost Me Money?

You’re absolutely right to ask this important question and the answer is of course - yes.

In the short-term, offering a loyalty program will cost you money and affect your earnings.

But those that look only at the short-term gains to business growth are generally the businesses fail! There is always a cost in providing a service whether it’s your time, materials or both. But wait; let’s look at this from the perspectives of both short and long-term gains.

Let’s say you decide to offer a customer loyalty program and that you offer stamps on a card every time you client completes a nail appointment.

FREE nail appointment when 8 stamps collected. They can claim their loyalty reward on their 9th appointment.

If you offer to do every 9th nail service for free, that's 1/9 less money you have earned, right?

Of course you would be right, but whilst this is the case from a short-term perspective, in the long run a loyalty program will earn you much more money and regularly than it costs you. This is accomplished by developing a long-term client / business relationship, and if your client does not return for future nail appointments you will not have lost a thing!  

Let's Explore This Hypothetical Example to See Why This is the Case

Continuing to use the example above let's say that your loyalty program consists of giving each of your clients a stamp on a loyalty card at the end of every nail appointment, and that you offer a free nail appointment after eight stamps. Now let’s look at the pros and the cons and what it means in terms of lost revenue for this type of program.

In this example we’re using the term ‘lost revenue’ instead of cost because the cost of an appointment is actually less. The true cost to your business is actually the profit from a nail appointment.

To keep the maths simple were going to use an average value for a nail appointment of £25 and we are going to assume you have 30 clients.

  • 8 Nail appointments x £25 = £200 Earnings per client
  • 30 Clients x £200 = £6000 Total earnings
  • Collecting 8 stamps client received 1 free nail booking a saving of £25 on their 9th appointment.
  • Multiply this by the number of clients on your books, in this case 30.
  • 30 x £25 = £750 in lost revenue giving 30 clients 1 free 9th nail appointment.

Summary Points to Consider

£750 of lost revenue for £6000 worth of business sounds like a lot, but would you not rather have the regular business and an established client book?
Any loss in revenue is actually much less in reality when you consider the true cost of an appointment.
Not every client will see the loyalty program through so loss in revenue is often much less.
You’re keeping your clients happy and feeling valued thus perpetuating your nail business.


The Positives & Negatives of Running a Client Loyalty Program

Lets start with the negatives and finish with the positives.

Negatives:
  1. You will receive a bit less money when you client cashes in their loyalty stamps.

Positives:
  1. You will have improved the likelihood that the client WILL come back a second time and for many subsequent nail appointments, where without an incentive, they might not.
  2. The customer loyalty card acts as a visual and physical reminder for the client (Free advertising!). Again enhancing the likelihood of a repeat business and future booking. A cleverly designed and correctly sized customer loyalty card will remind the client every time she opens her purse, reminding her of (hopefully) a positive experience with you and your nail business.
  3. Perception is everything. Showing that you care, look after and reward ‘regular’ customers will leave your clients with the impression that they are ‘valued’. They will also perceive to have received an enhanced more personal experience when compared to other similar local businesses.
  4. Your clients will be left with a positive impression that you and your nail business offer a better value deal and may feel more inclined to feel good about you, the work that you do and the range of nail services you offer.
  5. Whereas without a client loyalty program, you might be able to keep a client for one or two nail appointment, with a loyalty program, you should keep your clients for longer.
  6. They are inexpensive to set up and support.
  7. They are a unique selling point (UPS).
  8. They are attractive to customers because let’s face it who doesn't like free or discounted services.

Summary

We think that it’s always worth taking a very small reduction in your profit margins to keep your customers coming back, which means that the scale and flow of your clients through your business will be increased.

Ask yourself the following question and then decide if a customer loyalty scheme is for you. Would you rather have two clients every day letting you do their nails for full price, or five clients and sacrificing a modest discount?

We hope that we have convinced you of the benefits of adopting a client reward system for your nail business and remember you can tailor a discount deal to your own requirements. Also make sure you include the details and any special terms and conditions applicable to discounts or reward systems you offer either on your website or in print and don't forget to promote your offers to your clients.

We hope you have found this nail tech article useful. If you have, please feel free to recommend, share or link to it.

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