Membership programs in salons and spas are growing in popularity. They can increase client loyalty and bring in a reliable revenue stream, however not all businesses will benefit from them. Find out if you should join this trend or if it is not a fit for your salon.
Benefits of a Membership Program
More Appointment Bookings
Clients typically have an incentive to become a member as they receive additional benefits at a lower cost. This can take place in the form of free services (paid for in the price of membership), credits, or discounts. In order to take full advantage of the membership, clients will visit your business more frequently.
Increased Sales
The idea of upselling is to convince customers to purchase a product or service that they were not originally considering. Memberships can be a great upselling technique by including a few popular services along with a less popular yet more profitable service. Clients may see the increased value and try out something new!
For example, some clients try to save time or a few bucks by attempting things at home when they really should be coming to you. Providing a membership package with a maintenance plan (e.g. free bang trim every month or discounted color touch up) will help fill up your appointment book, earn some extra revenue, and also save some time by not having to fix the damage clients may cause to themselves. Of course with the upkeep, clients will also have a higher satisfaction rate which leads to greater retention!
New Clients
Beyond having greater satisfaction levels and thus better review and more word-of-mouth referrals, you can incorporate a “bring a friend” program to put new clients in your seats. Consumers tend to value their friends’ recommendations but sometimes it isn’t enough to get them to try out your salon. Motivate them to come by allowing members to bring a friend in for a free (i.e. included in the membership cost) service a couple times each year. Members will love it and you will have the opportunity to “wow” their friends and turn them into lifelong clients!
Reliable Cash Flow
Clients pay for their membership before any services are even provided. Even in the months that they do not claim any benefits, you will still receive that revenue. With the steady cash flow of a membership program, you can have more confidence in paying off your costs.
Routine Rebookings
In tough economic situations, consumers tend to cut down on their spending. However, they have a greater likelihood to cut back on one-time spending than to eliminate their regular activities. For example, they will be more likely to put off their purchase of a new dress than to buy their daily cup of coffee. Similarly, your spa members will think of their monthly appointment as a part of their lifestyle and will be more hesitant to cancel or delay their massage (especially if they are locked in for a period of time).
Reasons to Avoid a Membership Program
Limited Capacity
As mentioned earlier, memberships will likely lead to more appointment requests. You will want to ensure that these appointments for discounted services do not reduce your ability to take on appointments for regular-priced services. Since members have already paid to receive certain benefits, they would need to be prioritized. By losing regular-priced sales, you will be cutting into your profits and will potentially lose some clients as they will not be able to get an appointment.
This can be mitigated by either extending business hours, hiring new stylists (if you have space available), or by restricting membership redemptions to your quieter times. Some salons have also limited the number of memberships available.
Management Challenges
Do you have the resources necessary to manage a membership program? At the very least, you will need to be able to track redemption and billing history to know who has paid their fees and if they’ve already claimed the benefits available to them.
Well, you’re in luck! With Insight Software, you can easily create, sell, and manage memberships! Beyond that, Insight will help organize your appointment schedule, send promotional emails and text messages, track inventory, and more.
