Inside the Salon: Stop discount disasters
Posted on 31st May 2016 by Rhiannon Barnes
How loyalty programs are saving the Beauty and Hair industry from the disasters of discount programs
There are so many deal and discount programs out there, it is sometimes impossible to refrain from jumping on the bandwagon to acquire new customers. As a Beauty Therapist, I returned from working on a cruiseship to my home of Australia in 2010. This was shortly after the global financial crisis hit and beauty salons and hairdressers were struggling everywhere. It was incredibly hard to get a full time job as a beauty therapist and I took a job working for a fairly new salon. Little did I know that the business owner had turned to using a deal and discount program, in times of despair. It was a horrible experience, we were absolutely bombarded with appointments from clients that were not interested in seeing us because of the special treatment and services we offered (we could have given them a massage with baby oil for all they cared). The customers we saw just wanted a cheap deal and as much as we gave the best customer service, we never saw any of those clients again. Not long after the discount craziness, we didn’t receive any of the money that we were promised and not only that, we were back to being dead quiet. A few months later the business went belly up and closed down.
Fortunately, there are so many alternative solutions to discounts programs now, including Loyalzoo. Rather than pushing hard earned customers out with discount programs, loyalty programs allow you to nurture your existing customers to ensure they return. The facts tell it all, it takes 10 times more money to acquire new customers, so by focusing on your existing customers you will see a boost in customer retention and revenue. Loyalty reward programs work on consumer psychology without hurting the business. Customers who are part of a loyalty program spend up to 2x more because they are spending (or visiting more), knowing that they want to achieve a specific reward. The customer thinks that the business owner is being generous by giving away something, while the business owner really is asking the customer to spend more to get something in return, so it’s a win-win situation.
Loyalty programs have been around for a long time in the form of paper punch cards, those you often see at coffee shops, but now they are becoming more sophisticated. Loyalty programs have become digital, making it incredibly easy and affordable for business owners to run their own. By offering a digital loyalty program, customers are more inclined to take part in a loyalty program because it is more engaging and convenient. If only I could turn back time and use a digital loyalty program instead of a discount program, how different things may have been?
For a free trial to build your own affordable loyalty program, head to www.loyalzoo.com. For more information contact Rhiannon at +44 (0)20 3598 3932