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When you run a beauty or wellness business, the focus is often on enticing new customers, preferably as many as possible. But what about making sure those customers keep coming back, again and again and again?
Turning your walk-ins into loyal regulars is key to creating a sustainable and thriving business. Here we look at why it’s so important, and which strategies you can use to boost your repeat bookings.
Why you need repeat customers
You might have started your business on sheer gut instinct – you know what you want to do, and it just works, at least initially. But to sustain your business, you need revenue from paying customers. Trouble is it costs an awful lot more to get new ones than it does to encourage existing ones to make a repeat visit.
The figures back this up – different sources put the cost of bringing in a new customer at five times higher than the cost of selling to an existing one. And the probability of selling to an existing customer is 60–70%, compared to just 5% for a person who has never bought from you before.
If you’re still not convinced, consider this – if you increase customer retention rates by just 5%, you’ll increase profits by 25%–95%. Plus, loyal retail customers spend 67% more than first-time clients.
How to calculate your customer acquisition cost
It’s useful to know exactly how much each new walk-in is costing you, and there’s an easy formula for working out your customer acquisition cost (CAC).
Simply add up the cost of your sales and the cost of your marketing efforts (ad spend, social media marketing, agency costs etc) and divide it by the total number of new customers.
CAC = (cost of sales + cost of marketing) ÷ number of new customers in that period
For example, you run a Facebook ads campaign to get 500 new customers into your salon, and it costs $2,000. To cater for these extra 500 customers, you need to employ another stylist and buy extra products, which costs you $50,000. Your CAC is ($2,000 + $50,000)/500 = $104.
Now, let’s compare that to customer retention cost (CRC). Add the total of all CRC activities (loyalty schemes, cost of customer services agents such as receptionists, training to improve customer service, customer usage of products and services, features to engage with customers like chatbots online appointments booking software, and divide it by the total number of active customers in that period.
CRC = total cost of retention activities (loyalty schemes, customer service etc) ÷ number of active customers in that period
For example, you spend $10,000 on your customer retention activities in three months and over that same period you have 500 people use your services or buy your products, your CRC is $20 per customer.
To further define what it’s costing you, compare those figures to your average customer spend. If your average new customer only spends $80 per visit, and it’s costing you $104 to get that customer, then you know it’s too high. If they’re a regular customer, you know the revenue they bring to your business is more than it costs to retain them.
Five easy ways to make sure your customers come back
The figures make a convincing case for throwing your marketing efforts behind customer retention. These five strategies are a great way to encourage clients to book with you regularly:
1. Special offers and promotions
Using customer relationship management (CRM) software like Square Marketing, keep track of your customers’ details and their purchase history. Use this information to segment them and tailor emails specifically. Here are some things you might send:
- Abandoned shopping cart emails
- Reminders if they’ve not visited or purchased from you in three months
- Seasonal offers or special birthday promotions for them
- Products or services related to ones they’ve already purchased
- Exclusive deals for customers who spend the most money with you
2. Customer newsletters
Sending a newsletter via an app like Mailchimp lets you send automated offers and new product updates. It’s a cost-effective way of marketing to your existing customer base and reminds them regularly of your brand. Using Square, add custom landing pages so your clients can book and buy from you directly.
3. Get regular customer feedback
Your customers are the first to tell you what service gaps you have if you ask them. Setting up a regular feedback loop from the outset is a great way to find out where you can improve. Send a survey with Square Marketing straight after treatment or purchase, and pair it with a special offer. Not only might they book again, but you also receive valuable feedback.
4. Make sure all communication is branded
Whether thanking them for their purchase or asking them what they thought of their latest back massage, make sure your logo is all over it. Constantly reinforce your brand throughout the entire customer journey, particularly in the post-sale phase. Make them feel good about your brand and keep you in mind.
5. Create a customer loyalty program
There’s nothing like a good customer loyalty scheme to persuade customers to come back. Giving them rewards when they collect points encourages them to return time and time again. The trick is to make sure the rewards you offer are of real value – money off future treatments, discounts, free gifts etc.
Customers who enrol in Square’s loyalty program spend on average 33% more.
Putting your marketing efforts into acquiring new customers is a completely valid and legitimate business decision. But don’t do so at the expense of your existing customers. Divert some of your efforts to appealing to your current clients, and see a rise in retention rates which is reflected in your bottom line.
Know your core audience
Using the data and insights from your most reliable and frequent customers can be a great opportunity to understand your ideal target market. Take a look at the insights within your Square Dashboard to see which types of services they most frequently book, which products they purchase, and even how they interact with your business, such as email opens or discount and promotion redemptions.
Understanding your repeat customers can allow you to target and serve your walk-ins better. You’ll be able to invest more into the services and products.
Build a great team and staff
A great customer experience relies on having a great team in place. Train your staff so that they feel confident in the day-to-day interactions with your customers and set a welcoming tone for walk-ins and newer customers.
One way to ensure a seamless and smooth interaction between your staff and clients is to train them on the software and tools. Using multiple software programs can cause lags, hold up bookings and checkouts, and create frustration and impatience with your staff. With Square your team can spend less time managing separate software and tools and more time focusing on customers.
If you have multiple locations, work with leaders at each location. Ensure that they further train your team and that every staff member knows your services and products inside and out. A strong leader and team can boost sales while upselling an additional service or product that’s in your salon or available on your Square Online store.
You want to hire the best professionals for your beauty services. But creating a space that clients will want to return to isn’t solely about having the best professionals. Knowing how to build a culture of community at your beauty business can transform your location into a business that clients and staff will want to support. Foster community by:
- Offering moral support to your employees
- Crafting a inviting, family atmosphere
- Providing training programs for your staff
- Protecting staff time by offering flexible working hours or PTO
- Focusing on customer service policies
Build a great reputation
When you communicate with your clients and show your appreciation for their support, kindly ask them to share their experiences through reviews of your beauty business. Asking for reviews doesn’t have to be awkward. A great way to request reviews is through follow-up emails or texts after a service. Send out an email or a text asking for feedback to keep the communication loop open. Remind them to share their experience on Google or Facebook reviews.
For example, a simple text or email could include:
“Thank you so much for your visit! We want to thank you again for your business, and we hope you are happy with the services offered. If there was anything we could have done to make your visit more enjoyable, please let us know. If you enjoyed your visit, we would be so grateful if you could further support us by writing a short review on Google to share your thoughts. Thank you again!”
Don’t forget to support the local community as well. Do you or your staff have a mission you believe in and want to support? Partner with a local charity or a nonprofit in your area to hold a fundraising event. For example, if your beauty business practices low-waste and sustainable initiatives, you can work with a local nonprofit that focuses on recycling and sustainability education to give back to the community.
Turn your beauty business into a destination
In addition to fundraising events, you can turn your business into a destination for those in your community.
Here are some examples:
- Work with other small businesses in your craft to have a happy hour event.
- Host workshops and have your staff teach something based on their expertise.
- You can build a community that supports your business through get-togethers and parties that bring like-minded individuals together.
While turning walk-ins into repeat bookings doesn’t happen with one single tactic, a memorable experience and great interactions with your customers help you stand out from your competition. Keeping the client top of mind is sure to help increase your profitability and become a proven strategy for how to keep customers coming back to your beauty business.