When is 20% greater than 80%?
Though there are certainly a whole lot of consumers out there looking to spend money on beauty, we’d be lying if we didn’t state the obvious: The beauty business is a highly competitive industry.
So, rather than focusing your attention on scrambling to get as many new clients as possible, why don’t you focus your attention more on keeping the clients you already have? Studies show that 82% of companies agree with the idea that client retention is less expensive than new client acquisition.
And we have the facts to prove it.
On average, getting new customers “costs anywhere from five to 25 times more than retaining existing ones.” We will let you sit with that for a minute. Five to 25 times more. That’s a whole lot of money that you could be saving or spending on something else for your business.
We aren’t saying you should stop putting effort into attracting new clientele to your salon or spa, but we are saying to prioritize the quality of your clients, not the quantity.
By zoning in on creating loyalty, you will attract the right clients who will buy more often and will also likely bring you new business that might turn into even more long-term clients. This is all because they trust you. And when it comes to the beauty biz, trust is worth its weight in gold.
We’ve all had that one scarring experience where we went into a salon and got the worst haircut of our lives. We are willing to bet it wasn’t the salon where you typically go, and it wasn’t a salon that came as a recommendation from a friend. The lesson to be learned: Always stick with the salon you know and trust.
Because this story rings true for so many, it needs to be your goal to work on being that salon for your clients. The Pareto Principle is an idea that works wonders for sales and marketing. Even though the idea is over 100 years old, it still rings true today. The modern-day take on this principle essentially says that 80% of your profits should come from 20% of customers. In other words, the 20% of your clientele that is loyal will bring in the vast majority of your revenue.
While it sounds overwhelming, getting that loyal clientele is not as challenging as you think, especially with the help of modern-day technology.