Industry • Best Practice
Data-Driven Devotion: Using Loyalty Programs to Personalize Client Experiences
Sep.05.2023By Boulevard Staff
Combining rich report data with pitch-perfect marketing tech can inspire meaningful client relationships
Loyal clients are so much more than dependable sources of income; they’re also crucial indicators that a salon or spa’s services are worth coming back for. However, client loyalty isn’t freely given — it’s hard-earned with exceptional service, personalized details, and the occasional discount or incentive.
If inspiring loyalty means meeting minute client expectations with bespoke service, then loyalty programs should aspire to the same level of personalization. How can self-care business owners meet that lofty goal? By poring over all of the data at their disposal to understand exactly what their clients want — and giving them the message they want to hear.
Why run a loyalty program?
Not every ancient sales maxim still holds true, but it remains a stone-cold fact that new clients are expensive to acquire. In fact, new client acquisition costs have increased almost 50% in the past five years. Current estimates put the cost of a new client at anywhere from five to 25 times more than retaining an old one.
Clearly, retaining loyal clients is cost-effective, but the benefits don’t stop there. Loyal clients will often pay for services more frequently than new ones, and 72% of them are ready to pay more for their preferred brand than for another. If your services really impress them, they might spread the word, and that word-of-mouth endorsement can carry the weight of a thousand Google reviews — 92% of consumers say they trust earned media such as recommendations from friends above all other forms of advertising.
While you should always strive to provide the best possible service, sometimes that’s just not enough. Clients have come to expect loyalty programs from businesses they frequent. They’re looking to be rewarded for coming back, and that desire presents an opportunity for your business. If you can meet that expectation, you stand to benefit. More than three-quarters (77%) of consumers are likely to stay with a brand that has a loyalty program, and 70% of people are more likely to recommend a company or brand with a good loyalty program.
What does this show us? First of all, loyalty programs work, giving clients another reason to choose your business over similar competitors. If clients are receiving rewards from your self-care business, they're more likely to make a purchase while getting their hair or nails done instead of picking it up while they’re shopping at Ulta or Sephora. Second, they can even help you bring in new clients through sweet, sweet word of mouth. Your best clients are the building blocks of your business, and rewarding their loyalty can turn them into your best promoters, too.
How to level up your loyalty
Loyalty programs can take many forms. Research shows discounts are the most popular, with 61% of consumers preferring them, and points are next up at 58%. But early or exclusive access (30%), personalized product recommendations (26%), interactive experiences (18%), and feeling like a part of a brand’s community (16%) are also popular. A strong rewards program should mix and match these elements and do more to appeal to as many clients in as personal a way as possible. “Gosh,” you may be thinking, “that sounds like a lot of work.” And it can be. But with best-in-class loyalty software, it doesn’t have to be. Here’s how you can leverage tech to strike the perfect loyalty program balance.
Analyze your client data
This may seem obvious, but bear with us: If you want your clients to feel understood, you have to understand them. Your booking software should collect identifying information about your clients such as age and gender as soon as they book. Over time, you’ll learn more about what services they’re interested in, how often they book, and what personal touches they best respond to. With customized reporting, you can turn all of this data into client profiles and group those profiles into segments that share key characteristics. This data will give you a framework for understanding which rewards your clients like best, guiding your loyalty program toward maximum efficiency.
If the loyalty program itself is the kite, then marketing is the wind that sends it sailing. First and foremost, clients need to be informed that your loyalty program exists and offers all the benefits they want. That means creating awareness campaigns, which are designed to — you guessed it — raise awareness about your self-care business. In this case, raising awareness also means informing your target audience about the particular benefits of your loyalty program. Consider detailing these perks in tight, punchy ads on social media, local media like regional newspapers, and out-of-home advertising in the areas where you do business. Automated email campaigns are another powerful tool in your marketing toolbox, so use them strategically! Offer sign-up incentives for new clients who decide to hop on the loyalty train.
Tweak rewards with loyalty software
Don’t forget about the clients already making use of your loyalty program. They’ll need reminding when it’s time to spend their points, book at a discount, or enjoy any other bonus you offer. The right loyalty software should track each client’s loyalty usage across multiple locations, and if it spots a client’s rewards lying fallow, it can send a gentle nudge. Plus, with a fully integrated software suite, your marketing and loyalty programs can work together — think dynamically generated, limited-time promotions that go straight to the inboxes of clients most likely to use them. Further automations can determine the best time to send out these offers, ensuring that your efforts are noticed.
Take the time to analyze how your loyalty rewards perform. Maybe certain client segments use their discounts exclusively on products from your online store. Maybe others forget to book with discount codes, but they come to all your members-only pop-up events. Not every client wants the same thing out of a rewards program, and loyalty software can help you pick out who wants what, double down on what works for each segment, and trim what doesn’t. Over time, you can develop a virtuous circle: loyal clients book more, which provides more data to refine loyalty rewards, which brings more loyal clients in, and so on.
Creating a loyalty program might feel like a Herculean effort, but in the competitive self-care industry, it’s exactly what you need to stand out. By taking a data-driven approach and customizing rewards to suit your clientele, you’re setting your salon or spa up for the long-term client relationships that successful businesses are built upon.
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