Nail Salon Membership. Create One to Make Optimal Profit
We’ve all seen the research. A nail salon membership, lashes membership or a hair salon membership program (also known as a loyalty program) is a viable source of supplemental income for your business. If you have been considering establishing a membership program at your salon to increase your clientele; or perhaps you already have a membership program and seeking to tweak it, now is a good time to plan how your nail salon membership, hair salon membership, or lashes membership program will operate while consumers are especially eager to try new looks concerning their beauty.
Let’s dive into the ups and downs of how a nail salon membership or similar beauty services membership program works. How can you make this program a success at your salon or spa?
Why I’m Buying a Membership
It’s 9 am on Saturday. The house is so still. None of my kiddos have stirred, so I’m hesitant to roll out of bed myself. My mamas out there know this feeling.
And just as I’m mid-thought about what I’ll cook for breakfast, I switch gears and begin daydreaming about how I can add a little self care into my schedule before Monday rolls in.
Honestly, I should have taken my girl up on the offer when she suggested that we buy memberships to our favorite massage spot. As one who recognizes that self care matters – I will forever love a good foot rub – I consider cashing in on a membership deal before I head to the kitchen.
And, just a couple of clicks later, my membership is purchased and appointment scheduled. Girl, the process was easier than I had anticipated. 🙂
Why Nail Salon Memberships (or the like) and Why Now?
We are used to living in a time when being busy is the norm, but more of us are taking self care seriously. As a result, the hospitality and beauty industries have been capitalizing from our desire to get some much-needed time away from the hustle and bustle of day-to-day living.
Owners, if you have been considering establishing a membership program, or loyalty program, at your salon or spa, or perhaps you already have one and want to adjust it, here’s the nitty gritty of how membership programs work and the pro’s and con’s.
How Any Beauty Business Membership Operates
The basic premise of a nail salon membership or hair salon membership, for example, is that they each offer customers several visits over a 6 to 12-month period for a flat rate.
Let’s Break It Down
Typically, a hair salon membership or nail salon membership participant will sign a contract that locks her into 12 months of services for a set price. This set price will be auto drafted from her credit card or bank account each month. There may be a penalty if the client ends her membership before the 6 to 12-month period is over.
Three Tiers of Membership
- Basic Level: deep discounts on services and retail merchandise (monthly membership fee is low)
- Mid Level: x number of appointments are allowed monthly for specific services (monthly fee is more expensive than the basic level fee)
- High-end Level: unlimited appointments or types of services are given (monthly membership fee is the most expensive of the choices)
Membership Program Benefits
Memberships can give a client her favorite beauty services on a consistent basis and on her schedule while saving some cash. What a win, right?
Similarly, you will feel greater peace of mind knowing that your new membership program affords your salon a guaranteed stream of income.
Plus, you and your staff may receive higher tips because your membership clients have already paid for their services, so to speak.
Not to mention, this program model can maintain a consistent clientele at your salon while also helping move your retail products.
“Repeat customers spend 33% more than new clients. And, even just a 5% uptick in customer retention can boost your profits 25-125%,” according to statistics found by Millennium Systems International.
Membership Program Challenges
While all of this sounds like rainbows and unicorns, like anything in life, there can be drawbacks to having a membership program. Consider these:
- It will take strong sales skills by you and your team to make this program work.
- What is your plan to sell retail, add-ons, and/or upsell opportunities?
- Not effectively advertising the plan(s) using social media and email marketing, just two of many marketing methods, to spread the word about the benefits of buying a membership may torpedo your program.
- Your team has not bought into this new program. Without an all-hands-on-deck approach to fully embrace what launching and maintaining a membership program involves, your level of success is questionable.
- Inconsistent team support to create a stellar customer experience (one worth rave reviews online) for every client. Plan to kiss the benefits good-bye if your team is not working together to make sure that your salon feels like a local getaway that pulls out all the stops for every client.
- Research shows that a salon must offer best-in-class service in order to see at least 25% growth in customer retention, which has a direct effect on your bottom line.
How to Begin a Membership System at Your Beauty Business
Before beginning a client loyalty plan at your business, run the numbers and make sure this business model works for you and your staff.
Teamwork Makes the Dream Work
First, analyze your team to make sure you have enough members to satisfy the expected uptick in clients’ needs.
What is each team member’s daily capacity for clients? Upselling, selling retail products — which pads your new stream of income — and religiously advertising your new program are paramount to it working.
Next, is your team willing to put in the time and effort to help you do these? If not, be able to train them to get ready.
Service Menu and Prices Analysis
- Decide to offer a good introductory discount just to get customers’ ears perked at the idea of buying a membership to your salon or spa.
- Next, take a good look at your menu of services.
- Choose a handful of popular services that you can repeatedly offer each month without an overwhelming loss of supplies. How much does each of these services cost now at regular price?
For example, if one client, we’ll call her Tonya, came in for a mix of some of these services on a regular basis each month for 1 year, how much would that cost her?
Now, brainstorm potential prices for 2-3 membership packages.
Create Membership Packages that Add Up
You must offer your clients package choices. Let’s do the math, multiply your lowest priced package by 12 months and your highest priced package by 12 months. Compare your answers to how much you calculated that Tonya will be spending in 1 year for services at regular price. Will Tonya save money buying your membership packages? If the answer is yes, you’ve set the right prices.
Finally, decide if it is most cost effective yet profitable to offer a package that offers unlimited appointments or a set number of appointments each month.
Continue Your Calculations
At this point, we know how much Tonya will save by buying a membership. However, how much will you gain? Let’s do the math for this aspect, too.
Are You Ready to Win?
There must be enough opportunity for profit built into the package prices for you to experience financial gains over time. Also, consider the add-ons.
For example, for nail artists, sell nail polish and home care kits. Offering both or either at a good price to every client is a great idea. Thus, the profit that you make from retail will add to the dollar amount that you are gaining over time with the membership packages.
Ready, Set, Go!
Once you have set the prices for your packages, drafted the terms for inclusion and rights to cancel, and created a game plan to advertise, prepared retail to sell and/or ready to offer add-on’s, it’s time for you to launch your new program!
Words to the Wise
Have a limit in mind for the number of memberships that you would like on your client roster. For example, you can advertise this program as a “Limited Time Offer” periodically throughout the year. Remember, this is just one component of the way that your salon makes money.
Ideas and Offerings to Help Make a Win-Win Scenario for All
- Create benchmarks for how you want to see your salon grow from having adopted a membership program.
- Also, establish membership package sales goals for your team. Pack in incentives for team members who meet and exceed these goals. Consider a higher commission for them.
- For clients who have bought a membership, allow them 1 complimentary add-on when they come in for an appointment on a traditionally slow day.
- Follow-up is key! Call and/or email your membership users to ask about their experience at your salon. And, use their feedback to make any necessary improvements.
Be Prepared for Deal Breakers
Final note, before we wrap up, some clients may look for loopholes to cancel their package in the future.
To mitigate some of this, make sure your customers know all the perks of your membership program up front. On the flip side, make it clear to each purchaser how she or he can cancel the contract. No one should be confused about this process. Remember, it is a must to have a plan in place for those that cancel the debit or credit card that they have on file. Consider consulting a lawyer to learn more about contracts and about how to protect your business when contracts are cancelled.
TAKE AWAY
Ask yourself these four questions in the future to gauge your new plan’s performance:
- What results can I measure from this program?
- Is my salon welcoming new guests each month?
- Do I see an increase in the frequency of visits for a large percentage of our clients?
- What is the average ticket price that we are earning for most of our clients?
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