Award-winning salon owner Caroline Sanderson heads up the Salon Jedi Coaching Academy, and is author of a new book, ‘The Ultimate Business Bible for Ambitious Salon Owners’ available on Amazon. This month she shares part 1 of her 3 keys to growing your salon during uncertain times.
When it comes to growth of a salon there are only three ways to grow: More clients – More spend – More visits.
In the next three columns I’m going to cover the 3 simplest ways to leverage these 3 areas for growth using the 3 R’s: Referrals – Revenue – Returns
Part 1 REFERRALS
It costs 7-12 times more going after new clients than leveraging your existing client base.
Your existing client base is an untapped goldmine. When you have happy clients who love what you do they are more than happy to refer other clients to you.
Leveraging referrals is often an under-utilised area for salon owners. Some have referral cards they use occasionally but now more than ever it’s time to 10X your strategies. Here are some ideas.
Create a referral ‘club’ with its own cool name and shout about it everywhere.
Clients can join the club to receive nine referral cards. In a test nine was found to be the most effective amount to give clients (don’t give one card implying they have just one friend)
Reward both parties equally – the referrer and referee.
You don’t always have to give anything, it’s ok to just ask for referrals, but giving a reward for doing so gives an even bigger nudge.
The reward could be money off, a free treatment or a product for example.
Giving £10 off a service or a product worth £10 that costs you £5 would both need to be tested to see which works best – if you give a £10 product it’s only costing you £5 for example and you’re not discounting your service but you may not get as many conversions as compared to giving £10 off the service.
Yes you may be financially better off offering the product but it may create less referrals.
In my first referral club we called our ‘Ego Maniacs Club’ we gave £15 off and a free treatment worth £10 to both parties. We shouted about the club saying “How would you like to get £225 of FREE HAIRDRESSING? Ask your stylist about joining the Club.”
The £225 of free hairdressing was:
£15 off x 9
£10 treatment x 9
This was the total value they would get if they referred 9 clients.
We also had chalk boards saying “Ask us how to get your next haircut FREE.”
For example if a haircut was £45 they just needed to send us three referrals before their next cut and their £45 in referral credits earned would cover their haircut.
We put their cards and instructions into an envelope and we had it on our website. You can create an area of your salon with balloons or flowers to make it stand out and shout about your club at touch points around the salon.
You can also incentivise referrals with prizes which we have also done in the past.
Refer 3 clients get ….
Refer 6 clients get ….
Refer 9 clients get ….
We have had prizes like iPads as our top prize for 9 referrals. No one reached the 9 but it encouraged them to put more effort into referrals and drove them up.
If they had reached 9 it’s worth giving a large prize away as the client is doing the hard work for you.
You must think of the client’s lifetime time value (LTV). If a client spends £400 a year and stays for 2 years on average that’s an LTV of £800.
£800 x 9 is worth £7,200 to you, what prize are you willing to give for this?
Also letting clients know you are a referral based business at each point of contact helps plant the seed for referrals.
We say it on our website home page, our email signature and in our front of house script that if a NEW client books the first thing we ask is who referred you. If they say they were not referred we say we are just checking because we are a referral based business and most of our new clients come from referrals (which they do.)
In the past decade we have had thousands of new clients through our own salon doors, the majority of which were from referrals. In our most successful year we had over 2000 new clients and had to grow into a salon double the size of the one we were in.
Another tip is asking all your A list clients for referrals, reach out to them by letter sending them the cards (or any other way you decide to run your club.) Let them know how grateful you are to have them as one of your top clients and you are ready and willing to serve the people they care about too and what’s in it for them (£225 of free hairdressing for example).
People hang with like-minded people so asking your top clients for referrals is a great strategy to find your tribe.
Don’t be scared to ask for referrals and even if you’re already running some sort of incentive think how you can 10X it.
Here’s to your salon success!
Find more strategies like these in our Salon Jedi book – all royalties go to the Mind charity and Hair & Beauty charity – or subscribe to our Salon Jedi YouTube channel.