Rewarding the Most Important People
When we opened, I decided we would put all our advertising dollars into our best form of advertising—our work—on our guests, and reward them for bragging about our team. That is how our rewards program was born. An industry statistic for advertising states it takes a $20 investment in advertising to bring in one new guest. And, because there is no personal relationship with the new guest, aside from a reaction to an ad that caught their eye, retention of new guests averages about 20 percent. That means, on average, we are spending $100 to have one guest still visiting our salon after one year.
Our rewards program is not targeted at the new guests, our 50 Ideas Book that gives them 20 percent off their first visit is for them. Our rewards program gives a $20 - $40 thank-you to our existing guests for recommending us to their friends.
The program is simple to manage and exciting to receive. All new guests fill out a consultation form at the beginning of the visit and on the form it asks, “How did you hear about our studio?” In order to receive a reward, the new guest MUST write an existing guest's name in that space. Then, depending on how many services the new guest receives, the existing guest is rewarded $20 for one service (i.e., hair cut, color or highlight) or a $40 thank-you if the new guest has multiple services (i.e. hair cut and color or hair cut and highlights).
As the new guest’s information is being entered into the computer by our studio coordinator, they immediately address a thank-you rewards postcard for the existing guest, filling in the new guest's name to go in the next day’s mail. The postcard is great because every person who sees it (mail man, family members, etc.) also see that our studio is giving away free money to use for services at our studios, creating more buzz.
In one month, we have rewarded as many as nine thank-you rewards for a value of $270 to one existing guest. Naturally, she was so thankful she told more people, not just about our studio, but also about our rewards—generating even more excitement.
In a tough economy, ideas like these continue to allow our studios to grow when so many others are not as fortunate. I believe when we put first things first, it allows us to do the things we want to do that other salons can not afford to do, like create other ideas that are exciting to our guests.