Finally A “No-Brainer” Referral System that Works
What is the cheapest and most effective way to get new clients into your salon?
Getting client referrals from existing clients would be the obvious answer. But, why don’t most salons get a steady stream of new clients every week from referrals? If its the best way to get new clients…wouldn’t it stand to reason that a great effort would be made to get a referral program working in high gear?
In reality, most salons have no referral program at all. And based on my analysis of almost five hundred salons, less than 3% of salons have a defined referral program that is even monitored! But if you ask the salon owner “How do you get most of your clients?” over 80% will say “by referral”.
Does this make any sense?
Actually, it does. Most traditional referral programs “die an early death” because they are based on a system that requires work by the salon owner and guts by the staff. This is a lethal combination in almost all cases.
But think of it this way, if your salon could get just two more new clients each week by implementing a kick-ass client referral program, wouldn’t it be worth it? How much is a good client worth to your salon every year in terms of sales? $300? $400? (You can easily do the math by taking your average ticket and multiplying it by 8 visits per year).
So, if your average client is worth $300 per year and you add two more of these new clients per week – that would be about $31,200 in additional revenue each year (104 x $300)! And that doesn’t include the second year, or the third year, etc.
Now, this all sounds exciting, but how can you get a referral program off the drawing board and into action without having it fall to the lethal combination that I spoke of earlier? Here’s how…
Your HairMax salon software has a little known add-on feature available that offers a unique way of doing client referrals. It was actually developed for a salon chain some years ago and until recently I have not let anyone know of its existence. Sure, HairMax tracks client referrals and prints off reports to help you manage the program, but the current program requires some work by the salon owner (or manager) and still calls for the stylists to “promote” the program.
This new client referral program solves each of these problems and it has already proven to work like gangbusters. How do I know? Because the salon chain owner (who I learned it from) keeps ordering thousands of client referral cards. Think about it, this guy is a really shrewd operator. Would he be wasting his money on a program that didn’t work? The answer is NO!
In short, this is how the program works…
You create a plastic client referral card for your salon about the size of a gift card. Then you hand out 3 referral cards to your best 300-400 clients. In your HairMax system, you simply record the cards that are being issued to the clients. (There is a special section where you do this and it only takes about 5 seconds). That’s it!
When any new client comes in, HairMax will prompt the receptionist for the referral card. Once the receptionist scans the card (bar code on the back) or types in the number – the credit for the referral goes to the appropriate client. There is no fumbling around to find the referring client, there is no missing information because it’s busy at the desk, etc.
And with traditional referral systems, “rewarding” the client has always been a major challenge. However, with this new system, you can actually setup what service you want to give (the referring client) for FREE once they refer X number of clients to your salon. In other words, if you want to give away a free haircut for every 3 new clients that are referred, you can set it up very easily.
HairMax salon software will automatically prompt the receptionist at point-of-sale once the new client count has been reached for a particular client. And once the “free” service is applied, the count for that client goes back to zero. And just like the gift card system in HairMax, you can re-use the client referral cards by simply deleting them out of your system.
There you have it. A simple, effective client referral system that requires almost no maintenance and is extremely easy to implement. And here is the best part. If you design a little sign to have at each of your stylist stations – there is no selling required by the stylists. The clients will actually ASK for the referral cards.
Now, you can also take it one step further and tell the client that their “friends” will get 50% off their first service when they present the card. So, the new client wins because they get 50% off, the referring client wins because they get a free service eventually, and your salon wins because it gets a great new client.
This is the best referral program I have ever seen work over a long period of time. In 2009, salons will continue to face challenges when it comes to attracting clients without spending a lot of money on marketing and advertising. If you are going to implement one new program for this year…this should be it!
P.S. To get started on this referral program, simply contact our office. We will then start the design of your referral cards, marketing signage, and provide you with the HairMax salon software add-on feature required to get the program implemented.
Remember, every new client can be worth hundreds to your salon’s sales this year. If you’re going to invest in any new program – this one should be it!
Best Regards,
Steve Sampson
5 Salon Reports to Run Your Whole Business
Running the salon "better" and more profitably is the number one priority of most salon owners today. The best way to improve your business is by using the tremendous tool that most of you already possess…HairMax. Although HairMax contains over 75 reports, there are really five "key" reports that you should focus on going into the new year. If you just run these reports, and use them to improve each of these areas of your business…the results will be extrordinary. Let me explain…
Report #1: Client Retention Report
Retaining clients should always be of paramount importance to salon owners. Clients that are lost have the biggest negative impact on the future growth of the salon. The "average" salon usually has a retention rate for first-time clients of about 30% and a retention rate for regular clients of about 80%. The fastest way a salon can grow is by improving these retention rates. This report should be printed every six weeks, for each employee, to help identify opportunities.
Report #2: Client Referral Reports
The most cost-efficient way of getting new clients is by referral. Clients who are referred to your salon already have an implied "trust" factor built-in – because their friend already gave your salon "the seal of approval". Therefore, you retain referred clients much better than other clients who came in because of some other form of marketing. Another huge benefit is the non-existant cost associated with obtaining the referred client. This report should be run every 2 weeks to identify clients who are referring other clients. These clients should be rewarded for their efforts.
Report #3: Activity Trend Report
This report gives you all the statistical information you need to make quality decisions for your salon. It measures activity over a six-week time period and gives you information such as rebooking rates, color %, new client counts, request rates, average ticket, retail sales %, etc. This report should be run every week, by stylist, to help them monitor their progress in meeting their weekly goals.
Report #4: Inventory Status Report
This report will give you everything you need to know about your retail and professional inventory. It tells you how much inventory you have on-hand, what is selling (and what is not), where you are losing products due to theft, how much you spend on professional products, etc. Salon owners are always balancing having enough product on the shelf (so they don’t run out) with minimizing the total dollars tied up in inventory. This report helps you in maximizing those inventory goals.
Report #5: Cash/Sales Summary Report
This report is a perfect report to provide to your accountant. It gives them sales information, deposits, gift card sales and redemptions, sales tax collected, over/short information etc. You can run the report for any time period and simply hand it to your accountant.
These five reports will provide you with all the information needed to run your salon business more productively and profitably in 2009. There are other reports in HairMax that will give you additional detail, but these primary reports are the real building blocks. Run them consistency and work on improving each area of the business.
Best Regards, Steve
What is the Biggest Concern For Salons Going into 2009?
Well, the results are in from the poll that I took a few weeks ago. And for all those salon owners that participated, I just wanted to say thanks. Look, we’re all busy but if you can’t take the time to answer a "one-question" poll…you really need to ask yourself why. As usual the Pareto principle was at work here, (20% of the people…generated 80% of the responses).
But, I do have to say the results were pretty alarming. I had over 300 salon owners respond to a poll that asked a simple question. That question was "What is your Biggest Concern Going into 2009?". Over 75% of the salon owners chose one of the following as their top concern. Here were the top three answers:
33% – Running my Business Better and More Profitably
25% – Getting Enough New Clients
17% – Finding Quality Staff
Just a few years ago, that same poll produced results that were dramatically different. Selling more retail was number two in that poll. Getting quality staff was number one garnering over 40% of the responses. So, what does this tell us going into 2009? Answer: Finally salon owners are getting serious about running their salons as a business. They are also finally getting serious about finding new clients (i.e. marketing). These are good things.
I think we can all safely say that a lot of things slide during good times. Business owners rarely improve their businesses during boom times. They think that the business is better because the sales are going up. But in reality, the business may be getting worse and it tends to come out in spades when the economy takes a turn for the worse. Your HairMax salon software is a perfect tool for you to use to improve your business.
The salon owners that "tighten up their ship" over the next 12-18 months will emerge as the winners. Poorly run salons with no clear methods of attracting new clients or staff will go out of business. Staff will leave these salons and join the better run salons…adding additional revenue to these new powerhouses. Great salons will continue to take market-share from their competitors.
Salon owners that fail to learn the basic principles about running a successful business will struggle. Salon owners that fail to learn how to market their businesses…will see their business shrink or go under. Over the next 30 days, I will be creating a series of teleseminars designed to help you with these areas of your business. For those of you that have never heard of teleseminars, they are essentially audio programs that you can listen to over the Internet.
I will be posting the first teleseminar on this site over the next few weeks. It is free. Listen to it at your leisure. But do yourself a favor…listen to it.
Best Regards, Steve
How to Attract Affluent Clientele – Cheaply.
I want to talk to you about a little known method of advertising that targets more affluent clients. Typically, the affluent client will spend more each year in your salon (although this is not always the case). Salon owners are always trying to find new approaches when it comes to attracting these clients. There is a marketing principle that states “It usually takes the same amount of effort to attract a buyer who spends $200 per year as it does to attract a client who spends $1000 per year”. The problem lies in knowing just where to find the affluent buyers.
One of the best ways to do this is thru advertising in the booklets that people get during plays, operas, and charity events. The more local the event is to your salon…the better. Many times, full-page ads can be purchased for as little as a few hundred dollars. And by now, you realize that just obtaining one quality client can more than pay for the advertisement.
Check to see whether or not you can advertise on the inside cover or the back of the program (booklet). These are high visibility areas that you may be able to take advantage of for very short money.
You should also look at sponsoring “Charity” events. Again, if there is a program or booklet that is being handed out to participants – look to advertise in these materials. Many people that go to these events believe in the principle of reciprocity. Therefore, they are much more likely to frequent the businesses that are giving to their particular charity.
You should also investigate whether giving away Gift Cards to the charity is a possibility. Gift Cards and Packages are great things to donate to charities that are holding a “silent auction”. You can write them off and you have the very real possibility of getting a new affluent client with the gift.
Bottom Line: It doesn’t take a lot of money to market to the affluent. It only takes some creativity and your ability to find out what they attend on a regular basis.
Dedicated To Multiplying Your Profits,
Steve Sampson
www.hairmaxsalonsoftware.com
