Leverage Your Salon Loyalty Program To Track Spending and Boost Profits

Leverage Your Salon Loyalty Program To Track Spending and Boost Profits
Loyalty is built into the fabric of the beauty industry. Here's how to use a salon loyalty program to track customer spending and boost profits.
by Chidinma Nnamani Mar 14, 2024 — 5 min read
Leverage Your Salon Loyalty Program To Track Spending and Boost Profits

Loyalty is built into the fabric of the beauty industry. Customers often form personal connections with their preferred stylists, which helps drive repeat visits and appointments. Want proof? The Square Future of Commerce report reveals that 56% of consumers (and 61% of women specifically) book appointments with the same provider consistently. Separate research shows that 86% of customers will switch salons to follow their favorite stylist if the stylist moves to a new location. 

As a salon or beauty business owner, that’s a huge advantage. And it’s one you can leverage to nurture relationships with customers and boost your profits. A loyalty program is an effective way to keep customers connected to your business and to encourage repeat business by rewarding their patronage.  

A properly run salon loyalty program offers some key benefits:

How to design your salon loyalty program for the best results

Set clear and attainable rewards. 

The top three frustrations customers express with loyalty programs are reward points that expire, the length of time it takes to get rewards, and the value of rewards being too low. Having too many rules or restrictions is also a major complaint. Whether you opt for a point-based or tiered rewards system, it is essential to create rewards that are valuable and easy to earn and redeem.

So what’s the easiest way to find out which rewards resonate most with your customers? Ask them. Set up a quick survey they can fill out in a minute or two when they walk in for their next appointment. Use that insight to structure a loyalty program that hits the mark with your clientele.

Pro Tip

Don’t create a buck-for-buck program where customers only earn rewards when they spend money. Instead, reward nonpurchase activities, such as customer referrals or signing up for a new service.

Choose the right loyalty program software or platform.

A dedicated loyalty program software like Square Loyalty allows you to deliver the best possible experience. You want to use a platform that is easy to set up, easy for you and your staff to manage, and easy for customers to sign up and track their rewards. 

The insight that’s available within the tool is also important. For starters, you want a tool that gives some performance insight into your loyalty program, such as which sales are driven by loyalty incentives or the average spend of loyalty-enrolled versus nonloyalty-enrolled customers. As you gather more information about your program’s performance, you may want to change the program structure. Your selected software should make it easy to act quickly. 

Customize the program to fit your salon’s brand and clientele.

Tailor your loyalty program’s features, rewards, and messaging to align with the unique identity and preferences of your salon and its customers. For example, you can create VIP tiers with Square Loyalty and customize the name and structure of each tier to fit your business.

Using a point-of-sale system like Square, you can dive into your sales data to uncover the most popular products or services and build those into your rewards program. For example, from your Square Dashboard data, you can see your bestselling products by day, by week, and by month to determine the right time to unlock specific rewards. 

Communicate the benefits of the program to customers.

Your salon loyalty program will only succeed if your customers know about it and are motivated enough to sign up. Actively promote the loyalty program to customers during their appointments and share updates about your rewards and promotions on social media. Encourage stylists to mention the program’s benefits and explain how customers can sign up. Place eye-catching posters or signs throughout your salon that highlight the benefits of your loyalty program. Include a brief mention of your loyalty program in appointment reminders sent via email or text. With Square Appointments, for example, you can send automated text and email reminders to your customers that are tailored to suit your brand.

How to use your salon loyalty program data to track spending and boost sales

Here are some specific ways to track customer spending through your loyalty program, plus suggestions on how to boost your profits.

Integrate loyalty with your point-of-sale system.

With a loyalty-integrated POS system like Square POS, every time a customer makes a purchase, whether for a haircut, a hair treatment, or a beauty product, the system tracks the transaction and assigns loyalty points to the customer’s account automatically. 

When customers are ready to redeem their loyalty rewards, the POS system integrates the redemption process into the checkout experience seamlessly. You can apply discounts or redeem free services without the need for manual calculations or adjustments. This integrated process helps you to gather a wealth of data and see the sales impact of your loyalty program. 

Track every transaction.

Capture data on each transaction made by loyalty program members, including the date, time, services received, items purchased, and total amount spent. This information helps you identify spending patterns and trends among your customers. This data will be tracked automatically if you already use a loyalty-integrated payment system.

Track reward redemption.

Keep track of when customers redeem rewards or discounts earned through your loyalty program. This allows you to monitor how frequently customers take advantage of their loyalty benefits and which rewards are most popular. Again, this data is tracked automatically if you use a loyalty platform software connected to your payment system.

Maintain customer profiles.

Create detailed profiles for each loyalty program member, including their purchase history, preferences, and demographic information. Square Loyalty, for example, integrates with a built-in CRM tool that gives you access to all this data and more. You can use this data to personalize marketing messages and offers tailored to individual customers. If you observe that a customer purchases a particular brand of hair products frequently, you can send them targeted promotions or discounts on those products.

Use segmentation and targeting to boost sales.

While customer profiles allow you to target specific customers when necessary, segmentation allows you to target customers in more manageable groups. Segment your loyalty program members into different groups based on their spending habits, their preferences, and other criteria. This way you can target specific customer groups with relevant promotions and incentives to drive additional spending.

To avoid having to do this manually, tools like Square Directory creates smart groups, such as top spenders and visitors, based on your POS transactions. You can then send customized (and automated) marketing emails and text messages to each group. 

Dive deep into your analytics and reporting tool.

If you want to go even deeper, use your data to generate reports on customer spending and engagement. Analyze key metrics, such as total sales, average transaction value, and repeat purchase rate, to gain insights into customer behavior. For even more insight, send surveys and request feedback from your most active loyalty customers to improve your program.

Make the most of your salon loyalty program with Square.

Loyalty programs work, especially for businesses with which loyalty comes naturally. However you structure your rewards system, the key is to keep rewards attainable and to focus on delivering a flawless loyalty experience. By using technology like Square Loyalty, you can implement and manage your loyalty program effortlessly, so you can focus on what truly matters — monitoring the impact on your bottom line and driving business growth. 

Chidinma Nnamani
Chidinma Nnamani writes about the food industry, digital marketing, and technology — and explores the fine spaces where they intersect. She works with B2B startups and agencies, helping them deliver clear, actionable, and insightful content for business audiences.


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