Tips for boosting salon referrals
21st Jul 2022
by Josie Jackson
Business consultant Phil Jackson, from Build Your Salon, offers these tips for promoting your business through salon referrals.
Recommend a friend doesn’t need to be ‘meh’. The problem with almost every salon referral programme is that they all look very similar, and usually fail to add much to your business. We get a few hundred flyers printed and ask our team to give them to customers in exchange for a few percent off their next service for each friend they send into the salon.
Usually the promotion is a bit dull, not very generous, hard to monitor and easy to forget. We might have a bit of initial interest but I’ll bet that your team members aren’t giving the flyers to every customer. They’ll give them to the ones they are friendliest with, if any at all. Then the flyers get moved around the salon from reception to the retail area and then back again, getting a little more faded and scruffier each time. An occasional refocus in a team meeting might generate a couple of referrals but ultimately the promotion is a bit of a non-starter. But it doesn’t have to be that way.
We can add a spark to salon referrals by making three big changes:
1. Make it a campaign, not an ongoing promotion. Make every August referral month. By shortening the timescale, we can keep excitement levels higher. It also allows us to target salon referrals to a quieter time within the salon; most of our customers are mums and as soon as the kids break for summer, our bookings decline. Even better, we review our prices every March and September. If we have price-sensitive customers we encourage them to recommend some friends in August to take the sting out of our increases in September.
2. Make the programme much more generous. You can afford to. That’s because you’re wasting less money. Let me explain. Imagine you want a brand-new customer. You decide to turn to Facebook ads and run some advertisements. Let’s say that it costs you £50 for a new customer. You’re OK with that because you know that each new customer spends £50 on their first visit. You’re not making a profit on that visit, but that’s acceptable, in marketing jargon that is called a self-liquidating offer. The reason it’s acceptable as you also know that, in your salon, one in three customers who come in as a new clients turn into regular customers. Even though you’re only breaking even in the short term, in the long run you are growing. Incidentally, that’s why some businesses who know their numbers really thoroughly are OK with ‘going negative’ (or making a loss on the first visit).
Salon referrals still have an upfront cost - it’s the discount you’re offering and the incentive you’re giving to the existing customer. But we can be generous due to retention rates for recommended customers being higher, usually much higher. That’s because your existing customer will only recommend new customers who they think would be a good fit, so there is much less of a wasted marketing effort. So, even though your cost to get a new client might be as high, or even higher, than placing an ad, your future profits should be much greater, too.
3. Take the entire programme away from your team. Run it by email instead. That way, instead of your team deciding which customer they want to speak to, your entire clientele gets to hear about the programme and its results, which can be much more impressive. Announce your promotion by email at the beginning of the month, remind them a week or two later in a shorter email, then a third time a few days before the end of the month with a, “your last chance to …” email. Or, if you’re convinced you need to be running referrals all year round, why not automate that email to go out after, say, a customer’s third visit? Your salon software should handle this with ease.
Salon referrals don't have to be ‘meh’ – in fact, in many of the salons I work with, it is the most profitable promotion of the year.
After more business advice for your salon? Check out our article on dealing with conflict in a work environment.