What Are “Referral Programs”? Referral Programs encourage current customers to talk as much as possible about your salon or spa and increase “word-of-mouth” marketing by offering a reward for each new customer they refer to your business (usually discounted or free products and services).
Are Referral Programs Worth The Cost? According to a recent study, referred customers were both more profitable and loyal than normal customers. Referred customers spent more money, had a higher retention rate and were more valuable in both the short and long term. The study also found that Referral Programs are worth the cost as the value of a referred client is generally larger than the referral fee you pay.
Where Do I Start? Asking a previous client that visited you one time, 8 months ago, may not be the most effective way to go about getting referrals. Rather, start with your regular customers since they like your salon/spa and will have something positive to say about it. Being able to generate a list of these types of clients is something your management software should be able to easily do. Whether you base this list off of money spent, services purchased or simply how often they come to visit, you have an excellent place to begin your Referral Program.
What Do I Say? Once this list is generated, create a simple email asking these customers to bring or refer a friend and include a benefit to the customer, or to the customer’s referral. For example, ask your best customers to bring a friend and the two of them will be able to use a 20% “referral” coupon together. Another idea is to ask your customer to send a friend who will be given a free minor service in conjunction with any service they are purchasing (i.e. a free bang trim is an inexpensive way to say “thank you” for a referral getting a French manicure.)
Keep It Simple. Remember, the key to a successful Referral Program is making it easy for your customer, so your email should have a coupon readily available (or simply make the email the coupon). Also, having links to your Facebook, Twitter, Pinterest, Instagram, and other sites makes it easy for your customers to include beneficial comments about you. A simple Facebook post by a regular customer like “Hey guys, my spa will give me and anybody I bring in 25% off a massage. Who’s coming with me?” will give you immediate access to hundreds of potential referral clients.
Track the Benefits With Your Loyalty Program. A lot of small businesses like to do “punch cards” and other similar loyalty programs. If your customer has to keep a record like that handy (i.e. in their purse or wallet), it loses some of its value by being easy to lose or misplace. Instead, make sure you have a loyalty program that your business keeps record of so your customer can come in, or even go on-line or call, and find out what is available to them. A client file that keeps a record of their history and whatever points or benefits they have earned is invaluable. Also try printing any “earned value” onto your customer’s receipt so they are instantly aware of how many points they’ve earned.
Everybody’s business is a little different and will require some thought to be put into a properly running Referral Program, but using the ideas or even the general concepts discussed above have been proven in many successful salons and spas today.
VP of Sales at ProSolutions Software
With over 20 years experience in the beauty industry, Matt teaches classes to salon and spa owners on business topics including branding, management, marketing and advertising.