Up-selling is a technique where you encourage the customer to purchase more expensive items, upgrades, or other add-ons in an attempt to increase your revenue. While many spas and salons may have staff attempting to up-sell customers, this requires proper sales training and the ‘up-sell’ must be repeated on every customer.
A highly effective and simple approach to up-selling is to create memberships. Creating memberships for your spa or salon has tremendous benefits like driving predictable revenue and ensuring customer loyalty.
In this whitepaper, you’ll learn how to implement a membership strategy.
A membership program can be structured in a variety of ways; we’ll cover three membership types that are proven methods to increasing customer spend. Regardless of the type of membership, you’ll want the customer to pay a membership fee when she signs on.
A basic membership plan, can offer a flat discount. For example, the customer can become a member by paying a fixed cost. On becoming a member, she receives a flat 10% discount on all services for a full year.
A second plan can be set up where the customer pays for a membership and receives a balance of credits higher than the cost of the membership. For example, to join the membership plan, you can charge Rs 15,000 but the membership would be given credits worth Rs 20,000. The customer then enjoys an additional Rs 5,000 worth of services, and you gain long-term loyalty.
A third type of membership combines the cost of joining the membership plan with services. For example, if a customer pays Rs 15,000 to become a member, she will receive credits worth Rs 10,000 to spend on any services, plus a set of services that you’ve chosen that amounts to more than Rs 5,000. By doing this, your customer will likely try services that she may not have tried otherwise, but still gains value from becoming a member.
For any type of membership you may also want to provide free services which are generally not used on their own. For example, add one free steam service every month as part of the membership. The customer will perceive the free steam service as an added benefit and will often come in for a paid service to go along with the steam.
Design memberships to use any combination of the elements described above. All types of memberships ensure customer keep coming back to you, and are often successful in selling services that the customer would have otherwise not tried.
Memberships are a powerful way for you to increase customer average spend, get customers to visit more often, and encourage customers to try new services.
You should create a membership plan that fits the needs of your customers and your spa or salon. Here, we’ve offered a sample plan that combines different types of memberships.
Offer a flat discount on services. This encourages customer loyalty. The membership would look like:
Offer a group of services, plus a credit amount where the value of the services combined with the credit value is higher than the membership cost. This encourages the customer to try new services which do not sell much, but have good profit margins. For example, the membership might include:
Offer a credit value higher than the membership cost. This encourages loyalty and you benefit from receiving the large up-front payment. For example, the membership might include:
Customers that sign up for memberships bring additional value to your spa, as they:
Membership programs are powerful that result in increasing revenue when executed in the right way. They offer a simple, automated way to up-sell to customers and need focused attention on “the sale” only once. Memberships reduce the burden on staff to make individual up-sells and are more effective in that a marketing campaign can reach your whole customer base. After the sale, the program works on its own to brings customers back and encourages more spend on each visit.