When we’re looking for a great salon or spa, who do we ask? Our friends and family, of course. In the beauty and wellness industry, trust is everything. That’s why referrals are one of the best ways for salons and spas to grow their business and book new clients.
According to Nielson, 83% of people trust the recommendations of friends and family, and referral leads convert 30% better than leads from other channels. Plus, referred customers have a 16% higher lifetime value.
Given a positive experience, 83% of customers are willing to refer, but only 29% actually do.
What’s standing in the way of happy customers shouting your praises from the rooftop? A salon and spa referral marketing program.
Why Referral Marketing Matters
Between staffing, admin, customer service, cleaning and sanitizing, and keeping up with the social media, salon and spa owners are stretched thin. With so much on the go, it’s natural to push referral marketing to the bottom of the list. But not encouraging happy customers to refer their friends will cost you down the line.
Think of new customers like a timid squirrel that spooks when you approach. You must build trust before that squirrel is eating out of your hand. Attracting referral business is like setting out a delicious bowl of nuts and watching the squirrels come in droves.
When you don’t make it easy for clients to refer friends, you ignore the future customers just waiting to become your biggest fans.
The 25/20 Referral Marketing Program
Implementing a successful salon and spa referral marketing program is easier and more cost-effective than you think. You don’t need to offer large rewards, and you don’t need an elaborate plan either.
Take Aveda, a master in salon marketing, as an example. They wanted to increase customer referrals, so they conducted studies on the most successful incentives. After the results came in, Aveda rolled out a “25/20” program. This simple referral program brought in sixteen-fifty new clients every month for six to ten salon chairs!
Here’s how it works:
- Step 1: An existing customer invites a friend to try the salon by offering them a $20 credit toward any new service.
- Step 2: When the friend comes into the salon to cash in their reward, the referring guest receives a $25 credit toward their next product purchase.
That’s it! Here’s why this simple referral marketing program works:
- It’s easy to implement, and the message is simple.
- $20 is an impactful enough amount to entice a new guest.
- $25 makes the existing guest feel valued and increases their loyalty.
- Giving the existing guest a product award vs. a service award allows for greater opportunities to up-sell or cross-sell.
Shout it From the Rooftop
Here are a few ways to spread the word about your referral marketing program:
- Provide a script for staff: “if you have any friends who might be interested, I’d like to give both of you a gift if you refer them” or “have you heard about our rewards program where you can earn $25?”
- Email: send an email to your guests with their referral code.
- Mobile app: let your guests know that they can share their referral code directly through their mobile app.
- Get social: announce your referral program on your social media pages.
- Leverage reciprocity: “here’s $25 off a product. If you refer a friend, they will get $20 off a service.”
What Results Should You Expect
When starting out on any new program or venture, setting targets and benchmarks based on data and research can make a huge difference to the overall success. Globally, the average referral rate of salon and spa referral marketing campaigns is 2.2%, so if you’re hitting this number or higher then you’re doing great!
If you want to take your rate to new heights, then consider the following:
Overall, the success of many of today’s household brands, such as Uber and Airbnb, can be attributed to referral marketing strategies. In fact, Airbnb’s ‘referral loop’ had an exponential impact on the growth of its user base. This is because, the loop incentivizes users to refer as many friends as possible since they get a reward in the form of a credit for every person that signs up.
So, what are you waiting for? Take advantage of a salon and spa referral marketing program today and watch your customer base grow!
How Zenoti Can Help
With Zenoti’s mobile app, salon and spa referral marketing is a snap. Happy customers can rate, review and refer from their phone—right when they’re most likely to do so. They simply log in to the app, access their unique code and share it with their friends.
Ready to get started? Get in touch.