How to Develop a Great Client Retention Program

How to develop a great retention program your clients will love

Before you begin laying out your retention program, you will quickly find that any program designed to improve your salon/spa’s client retention performance will cause you to rethink many aspects of your business.

This is because virtually everything that happens in a salon or spa directly affects client satisfaction to some degree. The reasons a client will move to another salon or spa are many and varied. A total retention program addresses as many of these reasons as possible. It can be overwhelming at first, that’s why we suggest you start with the basics and fine-tune your program as you gain confidence and control.

Ground Rules
The following ground rules should be planned into your basic program:

1. Track client retention — not request rates. Request rates do not have anything to do with client retention.
2. Pre-book, pre-book, pre-book!!! It’s a simple concept, yet one that is desperately overlooked by most owners and service providers. Stop spending the marketing dollars to attract NEW clients, when you can work smarter (and keep all those marketing dollars) by pre-booking the clients you already have. And we don’t want to hear about client excuses. Spend an afternoon writing a script on how to position the importance of pre-booking, and watch your retention rates soar!
3. Base service provider compensation on their ability to retain clients.
   • Reward improving and excellent retention rates with a raise, bonus, prize, etc.
   • Address poor and declining stylist retention rates quickly. Coach, train, mentor, etc., until rates improve within a specified time frame. Release the employee if there is no improvement.
4. Assemble a basic assortment of marketing promotions to support retention.
   • Develop programs aimed at first-time clients to get them back for a second visit. “Thank You” texts/cards/e-mails, second visit discount cards/texts/e-mails, haircut and massage club cards and other simple programs that encourage repeat visits. With the wealth of automated message providers available these days (automated texts in salon software, e-mail providers like MailChimp, Aweber, Constant Contact, Infusionsoft, etc.) there is no excuse for skipping this step. Program it once and it’s done!
   • Use call-back, text or e-mail campaigns to find out why first-time clients did not return.
5. Profile and guide new client traffic.
   • Match new clients with those stylists best suited to retain them based on skill level, personality and personal profile.
6. Relentlessly communicate the goals with your team.
   • Evaluate and review each service provider’s retention rates every month.
   • Review retention goals during your daily huddles and weekly meetings.
   • Post monthly retention rates in the dispensary. This will reinforce your resolve to improve retention and encourage stylists to reach for the best overall retention rate. They can’t play the game if they don’t know the score!
7. Develop a marketing program to introduce clients to other qualified stylists.
   • Send out an announcement on social media or e-mail to your client list introducing your “total salon concept” that places the skills of the entire salon at the disposal of each client. You want clients to get comfortable with the idea that they can switch stylists within the salon.
8. Perfect the teamwork concept.
   • Every staff member should be working to achieve the salon’s goals.
   • Set up team projects, retention evaluation committees, first-time client programs and other team-based efforts.
9. Assemble a target list of real and potential retention problems at your salon/spa.
   • Examine every major and minor detail of your operation; parking, music, cleanliness, retail displays, reception area, website, telephone answering techniques, signage, etc..
   • Evaluate the skill level of each provider in each service category. If a service provider has a bad retention track record with a particular service — prohibit them from doing those services until trained and certified.
10. Develop a client referral program that encourages retained clients to recommend your salon to friends, family and associates. We’ve seen salons and spas do very well with “send-a-friend” referrals and two-for-one promotions that are either simple cards that stylists hand out to clients, or automated e-mails or texts that are sent out to pre-defined groups of clients.
11. Make the commitment to develop your retention program and stick with it.
    • Don’t try to accomplish everything too quickly. Develop your program and fine tune it as you gain control and master retention skills.
    • Don’t leave retention to chance.
    • Take the bull by the horns

Staff Involvement

Get your staff involved in the development of your entire retention program. The input, ideas and recommendations from staff members can play a key role in the success of the program. Staff members are more likely to support a program that they helped to put together than one developed solely by management. This is an excellent way to develop your teamwork concept.

Strategies recommends using project teams to expedite the process. Teams can be any size as long as they are manageable and will get their assigned tasks completed on time. The size of your staff doesn’t matter. A small salon or spa with three or four employees can still divide up elements of the program and work as individuals or teams. Larger operations may have the luxury of more team members, but maintaining control and focus requires closer supervision. The ground rules discussed earlier include a sufficient number of projects for your teams to sink their teeth into. Establish your teams, assign projects and agree to deadlines.

Program Implementation

A formal start date isn’t necessary to launch your retention program. There are so many elements and issues involved in retention that launching the program in stages is certainly acceptable. The goal is to improve retention, not to induce stress on you and your staff.

Step One: Get comfortable with the retention terms and key variables in your point-of-sale (POS) software. More importantly, learn how to run and understand the retention reports your POS provides. Don’t understand them? Call their tech support. Next, make two spreadsheets, one showing where you are now, and another with your target retention goals. The spreadsheets will be helpful for your initial staff meeting on retention.

Step Two: Have a staff meeting devoted entirely to client retention. Discuss the reports from step one and how all staff members will benefit from the program. It should be a relaxed meeting.

Step Three: There are four projects that should be worked on simultaneously. One, if you don’t already have retention promotions, get them done. Two, make sure you understand how to run/read your retention reports. Three, complete your list of retention hot-spots and how to eliminate them. Four, learn and implement your system.

Step Four: Begin monthly retention performance evaluations with all staff members. This includes the receptionist and others that have contact with clients.

Step Five: Review your compensation program and base all raises (commission or salary/hourly), bonuses, prizes, etc., on retention performance (among other performance-related benchmarks). Salons and spas that pay high commissions will have difficulty with this step as there is no room for increases. Call Strategies if you have problems.

Step Six: Fine-tune your program as you go.

The Goal
Shoot for a 20% increase in retention over the first six months. We’ve seen rates level off around the 75% rate. Keep us informed on your progress, we love to hear how you are going!