Does a Loyalty Program Make Sense for Your Business?

Salons, Spas, and Shops—Should You Implement a Loyalty Program?

We bet you any amount of money that if you picked up your wallet and sifted through the various pockets (or, you know, dumped it out on the countertop for those of us who are a little less organized), you’d pull out various loyalty program cards.

Whether you’re two stamps away from getting a free ice cream, a row of hole punches from a 20 percent discount at your next oil change, or an entire card’s length away from finally (FINALLY) getting that BOGO sandwich from your favorite sub shop, you’ve proved something important—you’re part of a loyalty program, and that loyalty program is working.

Loyalty programs are a hugely popular incentive that a lot of businesses—no matter the industry—partake in.

And truthfully, we can see why. 

These programs do a ton of things at oncethey make your customers feel valued (like they’re getting something back for spending money on you), they make your client feel welcomed, and they incentivize them to become seasoned regulars chasing the eternal punch card.

Maybe half of you hate the idea of a loyalty program. Maybe you think the idea of a loyalty program is foolproof. 

No matter where you stand on the spectrum, this article is for you. 

We’re exploring loyalty programs, how they can benefit you, and of course, how they could hurt your business, too.

Let's Talk Loyalty

First things first, we need to define a loyalty program.

These types of things all look different because they are all designed uniquely to meet the needs of a specific business. But for generality’s sake, let’s just say this:

A loyalty program is a reward system that you set up for your business to offer an incentive for returning customers as well as a way to attract new customers.

These programs can be old-school (a-la-punch-card) or new-fangled (create your own app, if you want), but ultimately, they do the same thing—incentivize, offer value, and keep customers happy.

And those reasons, well, they shouldn’t be totally ignored—especially the part about retaining customers.

If you’re able to keep a regular because of your loyalty program, you’re doing yourself a huge financial favor—it’s about 6 times more expensive to win a new customer than it is to keep an existing one.

So, yeah, it definitely pays off to do what you can to keep your existing customers feeling valued and appreciated.

What’s Good About Loyalty Programs?

Remember what we said earlier about how loyalty programs keep customers, attract new ones, and offer value?

All of that is still true.

Let’s dive a little deeper into the pros of a loyalty program.

Customers Feel Valued

Ultimately, a loyalty program is about making your customers feel like they’re getting a bang for their buck—and then some.

Even if your customers aren’t really getting all that much extra value of out your service, just the mere effort you put into making them feel valued is going to be worth it.  

People want to be appreciated.

They want to feel important. They want to feel like you understand how special it is that they chose your salon as the place to spend their hard-earned money.

Rewards programs, loyalty programs, and incentive programs offer that value and that validation the consumer is searching for—and ultimately, it makes them pretty happy.

They Keep Customers Coming Back for More

Loyalty programs do wonders for keeping regular clients coming back to your salon over and over again.

Sure, in a perfect world you could attract new clients constantly and not concern yourself with keeping every client that walks through your door a regular—but attract new clients costs a lot of dough.

Remember, it’s six times more expensive to attract new clients than it is to keep your repeat clients—and further, a regular client is likely to spend almost 70 percent more than your new ones.

They Attract New Clients Without Costing You Insane Amounts

When you implement a solid loyalty program, people are going to make sure their friends, family members, loved ones, pastors, teachers, etc. are all going to hear about it.

Translation? Hello referrals and hello new clients.

Loyalty programs, though definitely not free, have the potential to dramatically cut the cost of attracting new clients!

What’s Bad About Loyalty Programs?

Sure, there’s a lot of good that goes hand-in-hand with the loyalty program life. But we’re not here to sugar coat anything, there’s some bad, too.

Of course, everyone’s pros and cons are going to be different based on the program they design, but in general, you could deal with some issues like:

Loyalty Can Get Expensive

If you don’t do this correctly, you could end up losing a ton of money. And it’s easy to slip into a deficit without really knowing it. 

Make sure you’re doing the math and doing it correctly before you dive into a loyalty program that bleeds you dry.

It Can Make You Just Another Face in the Crowd

Sometimes, by adding in a loyalty program, you run the risk of looking like every other salon out there.

And truthfully, that’s because most salons find similar programs to be profitable. Unless you can come up with something super unique, it’s possible you’re making yourself more unrecognizable.

Data-Driven Programs Freak People Out

Remember all that data you love to receive? Well, that freaks people out.

Not all people, but some people. Not everyone likes having to give out their information to be in a program, but without it, running a program is pretty difficult.

No One Likes a Pushy Salon

We’re not saying this will absolutely happen, but it is possible that some customers are going to be pretty averse to you pushing a program on them.

Even if the program benefits them, sometimes people like to be left alone. Having a loyalty program means that you need to avoid being a loyalty program salesperson—it’s a big responsibility.

Ultimately, it’s up to you. We can’t decide whether a loyalty program makes sense for you, but we can tell you that it’s crucial to figure it out. 

We can’t wait to hear your verdict. No, we’re serious, we really want to hear your verdict. That’s why we have a comment section, people.

If you’re Team Loyalty Program, we wanna know. If you think Loyalty Programs are a cheap marketing ploy, we wanna know.

Either way, we hope we’ve been a valuable source of knowledge—and if you want even more knowledge, be sure to keep up with our regularly updated blog here on the EBS site​!

We’ve got the beauty biz tips, tricks of the trade, and industry advice you’ve been dying for!