How To Start A Succeessful Salon Referral Program. In the salon business, referrals are everything. According to some studies about 8. But it’s safe to say most salons aren’t effectively getting referrals. In this post we’ll explore how to implement a referral program and increase referrals for your salon. Referrals most often come through word of mouth recommendations of your current client base. Thus, in order for you, as the salon owner, to increase your referral customers, you first have to keep your current clients happy. While this may seem obvious without doing it well the rest of the referral techniques described below will be worthless if you can. In addition to making and keeping your current clients happy, actually getting referrals from them is going to take some strategic thinking and serious effort. The effort required to get referrals from your customers will be well worth it in the end. The monetary impact of a good referral program can literally change the fortune of a struggling salon. Ultimately the new business generated by your referred customers needs to be greater than any costs required of the program. These customers visit the salon 6 times a year and on average spend $5. This means currently the salon makes $3. Referral Marketing Best Practices. These best practices are what we feel are the key steps in creating the best referral program you can. How to Build an Employee Referral Program (That Actually Fills Jobs) Posted by Jenna Puckett. The lifeblood of your company is one of your best recruiting tools. This would represent a 3. Any salon owner would love that kind of growth! While this is a simplistic example it goes to show the kind of monetary impact a referral program can make for a salon trying to make more money. Create A Happy Client Base. Before we dive into specific methods to use in your referral program I can. If you currently have an unhappy client base your efforts should be focused on customer satisfaction before you even think about, let alone attempt, to implement a referral program. On the other hand if you do what your clients ask you to do and do a great job of it, they. Whether you cut or color their hair, wax their eyebrows or give them a manicure, if they love what you do then they. Be sure to really listen to what your clients want and then respond to those requests to meet and then exceed their expectations. When you sincerely listen and then exceed expectations they will be much more likely to refer their friends, family and co- workers to your salon. You can then implement some of the tactics described below. Lifetime Value of a Customer & Sufficient Incentives. The first step of any good referral program is ensuring that it will be profitable. As mentioned above the costs of the referral program needs to be offset by any future revenue generated by the actual referrals. 6-Step Guide to Building the Perfect Employee Referral. Referral programs offer ways to get new customers and keep current ones. Business Referral Program Ideas. How to Build the Best Referral Program. Building an Employee Referral Program. ReferralCandy powers referral marketing. Guide Best Practices and Guides ReferralCandy Demo. In order to ensure profitability salon owners must estimate lifetime value and properly incentivize customers. The beauty of a referral program is that often the lifetime value of a customer allows incentives to appear, and even actually be, significant. Too often salon owners, and many other store operators for that matter, are too stingy with the incentives offered for a referral. Salon owners need to know three things before setting up incentives for referrals. These are: average annual number of visits of a customer, average spend per visit and average length a customer stays with the salon. Knowing these things will allow a salon owner to estimate a lifetime value figure of a customer. For example, a customer who spends $5. Thus, giving a current client 1. In the example above, let. If a current customer provides 2 referrals they! You, as a salon owner, know that even if you give $1. So while the $7. 5 referral bonus may seem expensive at first it is actually a very good bargain! Thus, the first two critical steps of setting up a referral program are accurately estimating customer lifetime value and putting incentives in place that truly motivate customers to give referrals. Ways to Incentivize Customers. There are a number of different ways to incentivize/rewards current customers for giving you referrals. Your program can include offering a discount on certain services or offering a free service after so many referrals. You could also give a small gift bag of salon products after so many referrals or after their first referral. Whether the reward is a discount on services or an actual product make sure, as noted above, that it is generous and significant enough to motivate your current clients to follow through on the referrals yet not so much that it makes your program unprofitable. Another great way to incentivize referrals is through promotions. For example, you can give the existing client a free salon product or service or a discount on their next visit, and you can give the new customer a discount on a certain service or product. You could also always offer some kind of special discount to all of your first- time customers regardless of whether they are referred or not. Make sure that your incentives – services or products – . An overly complicated referral program is as bad as not having one at all! While the planning and calculations that go into a referral program may be extensive and detailed, the actual customer facing referral program should be extremely easy to understand and use. Promoting Your Referral Program. The next important step in implementing a successful referral program for your salon is to promote it. There are several ways to effectively promote your program. Email – Hopefully you. Your email can lead to a landing page on your website that has the full details, direct them to ask about it in the store, have them print off a referral card or all of the above. Just remember to keep it as simple as possible in order to get more people to take action. Social Media – You can use your social media platforms in various ways when it comes to your referral program. It can be a great way to announce a new program, inform new customers acquired through other channels that you have an existing referral program and celebrate/acknowledge recent successes. Find the platform (Pinterest, Instagram and Facebook work great for salons) that works best and start engaging your customers to give your referral program a digital boost. In- Store – In store promotion will be critical as there is no guarantee that current customers will open your email or engage with your salon on social media. But if they are truly happy they will undoubtedly be visiting your salon in the near future. Thus, you should be promoting your referral program in at least two different ways within the salon. First, stylists should make sure to communicate this to clients not only during the appointment but at checkout as well. Just make sure that in both cases it is not overly pushy nor unclear. A simple mention and quick overview of how it works should be enough for those that will be willing to give referrals. Second, in store signage is a must. Not all stylists will remember to tell customers and even then it may not be communicated well or even remembered by the customer. Window decals on the mirrors or store front and. These signs should concisely communicate that a program exists, what the rewards are and how to get started. How to Manage Your Referral Program. While it. The overriding principle of the managing your referral program is that it should be simple for both the salon and the customers. Referral Cards – Many salons choose to use a simple referral card much like discount hair cut chains use to promote a free haircut after . The major advantage of using a card like this is the low cost. There are a number of drawbacks including possible fraud, inability to measure the success of the program, lost cards, confusion for the employees and clients, etc. There are a variety of them out there that make management extremely easy for salon owners. The major drawback of these are that they are the most expensive option of those listed. Salon owners should ensure that the referral system fits for a small salon and is not built more for a purely online or e commerce type business. Referral Candy, Inivitebox and Ambassador are all examples of this type of software but are geared towards online businesses. App – Arguably the best way to manage your referral program is a hybrid of the referral card and a software program. Using a mobile app will allow not only for easier management for the salon employees but also gives customers an easy way to verify what they. In most cases if a software platform can be found it most likely will have an app component to it. Though undoubtedly an app expressly for this purpose is out there. Since most of your salon. By properly planning, incentivizing, promoting and managing it your salon will reap the great financial rewards of maximizing referrals from your current customers. How to Create a Referral Program that Works. Especially in the B2. B world, it. And a 2. So why do so many providers miss the mark when it comes to getting referrals? In order to excel at driving business through referrals, a business must do two things: Be referrable: offer amazing service. Adding value and delivering on client expectations provides the foundation for word- of- mouth marketing. Even the most robust referral system won. Remember, every business is unique, and your system will need to be tailored to the practices and key players in your marketing strategy. Step 1: Target your “dream customer”Targeting the right people is essential for the success of your referral system. Define your ideal customer. Take a look at your most valuable customers . A deep understanding of your ideal client will boost your bottom line because you can repeat what. It also makes it easier to describe your perfect prospect to referrers. Identify your best referrers. Referrers are people who know your company and already think highly of it. Typically, they have some sort of pull on your prospect, either through a personal or working relationship. Referrers can be existing clients, vendors, complimentary service providers, and/or business friends. Step 2: Educate referral sources. Once you. Make sure your referrers understand how your company is unique and how your products and services make a difference to your ideal clients. Educate your referrers. Talk to your referrers to help them understand what makes an ideal client for you. This streamlines your process and helps your referrers keep their eyes out for a great match. Equip your referrers. Develop valuable content that your referrers can share with their networks. Reports and guides can be easily passed along . When your referrers have great information to provide to people, they get excited to share it. Connect virtually. Update your Linked. In Profile and Linked. In Company Page so your referrers can provide online introductions and make connections virtually. Step 3: Ask for referrals. We understand that asking for referrals can be intimidating. You may worry that your client will think you’re pushy or rude. This will help your company realize an ongoing stream of prospects who come to you via word- of- mouth (the most powerful form of marketing): Ask for referrals at key points in your customer relationship. You can post thesein your email signature, newsletter correspondence, and on your website. This is a good option if you have a broad base of referral sources that you reach out to on a regular basis. If you have forms that you deliver to customers on a regular basis such as receipts of payment, this can be another place to print this message. Incorporate referral language into your client appreciation materials. Not only are you nurturing your client relationship, you. There are many ways to recognize your referral sources: Simple correspondence is an effective and affordable way to recognize your active referral sources. Make a phone call, send an email, or . Send a gift card, or grant them discounted products or services to express your appreciation when one of their referrals converts. Incentivize referrals for key relationships. Certain companies have relationships with the sales reps of complimentary software or types of services. There is often an opportunity to explore a formal spiff arrangement. Step 5: Measure referral marketing efforts. In order to leverage your referral system for the best results, it. With the right amount of measurement, you can answer questions like: Who are my best referral sources? How does my referral conversion rate compare to my overall lead conversion rate? What. You can also tie it into your Customer Relationship Management (CRM) software so that your sales team is sure to input sales made as a result of referrals. Just remember, a referral system won. Because the greatest way to generate more business is to give your customers something to talk about.
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January 2017
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