If you drink coffee in the morning or hit IKEA in the afternoons, you’ve probably encountered a customer loyalty program.
That “buy 10 green juice, get one free” punch card in your wallet?
Customer loyalty program.
That Sephora VIB account that gets you birthday gifts and extra annual discounts?
Yep, that’s a loyalty program, too.
Loyalty rewards programs are prolific because — as both a customer retention strategy and small business marketing tool — they work.
That’s why we’re breaking down how to create an epic customer loyalty program of your own.
This guide works for all small businesses, but we’ve paid particular attention to the hair and beauty industry as well as fitness businesses (because that’s our bread-and-butter).
You’ll find special notes on how to start a spa or salon loyalty program, plus some unique salon loyalty program ideas, too.
In this article:
- What is a customer loyalty program?
- Do loyalty programs work?
- How do they benefit your business?
- How customer loyalty programs work
- Common types of customer loyalty programs (plus examples)
- How to create a successful program of your own
What Is a Customer, Spa, or Salon Loyalty Program?
Loyalty programs offer special perks or rewards to repeat customers in order to incentivize them to keep coming back — and to come back more often.
Loyalty programs are particularly popular with small businesses because they require little-to-no marketing budget and largely run themselves once you’ve started one.
Do Customer Loyalty Programs Work?
You just need to find the right one for your business style and audience. Once you found it, studies show that a customer loyalty program can help create “sticky” clients who keep coming back.
According to research conducted by the reward program platform, Smile, if you can get a customer or client to return to your business a second and third time, there’s a 54% chance they’ll purchase a product or service again.
Repeat, loyal customers also spend more money on average each time they checkout.
This is why we often say that a single, repeat client is “better than a book full of maybes.”
Customer loyalty programs work because they focus on turning new clients into repeat clients. In fact, marketing experts have found that they wind up paying for themselves.
Why Customer Loyalty Programs Benefit Your Salon or Small Business
“If you can get a customer or client to return to your business a second and third time, there’s a 54% chance they’ll purchase a product or service again.”
1. Amp Up Customer Retention
But how do they convince 54% of customers to support your business again?
By some simple, honest psychology.
Think of the last time someone thanked you for what you do. How did you feel?
What about when someone gave you a discount for helping them out with a project or sending a client their way?
Feels great, right?
Customer loyalty programs are an automated version of the personalized thank-you note or call (though you should also send those after someone books with you).
They reward the clients that love you hardest and longest by giving them discounts on the products and services they’re already buying and booking.
2. Encourage a Higher Frequency of Visit (FOV)
Once clients sign up for a loyalty program, they’re incentivized to book appointments with you more often.
There’s a clear discount or reward ahead. This can result in clients booking appointments more often, and upping your frequency of visit (FOV) means more revenue year-over-year.
Here’s our explainer on why FOV is vital.
3. Encourage Referrals
While not all loyalty programs are referral programs, they still encourage members to recommend your services.
Loyal clients are more likely to recommend you to family and friends especially when they’ve been coming to you regularly and often.
And in this business (and every business really) word-of-mouth marketing is everything.
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How Customer Loyalty Programs Work
Customer loyalty programs vary in format, but here’s the basic premise: You track a repeat customer’s purchases, then reward them after they reach a certain dollar amount or number of transactions.
This process can be done through a variety of formats that vary from simple to complex.
Think about the paper punch card at your mom-and-pop café versus Starbucks’ rewards app.
Both are customer loyalty programs for coffee-guzzlers but with very different approaches.
With that in mind, let’s go over some common loyalty program examples plus ideas to put them into action.
5 Examples of Great Spa + Salon Loyalty Programs
Here are just a few of the most common types of customer loyalty programs along with some example formats. Any one of these options can help build customer retention at your salon or spa.
We mentioned punch cards a few times now because it’s the ideal customer loyalty program for beginners.
You hand a customer a punch card (feel free to go hard on the design and definitely consider laminating them), and they bring it with them each time they book a service.
When the punch card is full, presto! They receive a free service or a discount or a special freebie product.
The main appeal of punch card loyalty programs? You don’t have to keep track of anything.
You’re already juggling a busy schedule and your studio or salon’s appointment calendar — using a punch card system puts the tracking responsibility on your clients.
“Booked and busy is great and all but I think stylists should be working towards invested and rested” —Misty Jayne, Hair Educator & Money Coach for Hairstylists
Referral Bonuses / BOGO Rewards
While referral programs aren’t typically considered customer loyalty programs in other industries, we’re including them here because they’re essential to the service industry.
The premise is simple: Every time a loyal client brings you a new client, you give them a reward as a thank you.
Salon Loyalty Program Examples:
1. Offer a free service or discount to a client whenever they refer a new person to you. When the new client tells you who referred them, add a note to that person’s client profile, so you remember to discount them the next time they book.
2. If you teach classes, you could also consider setting up a discounted buy-one-get-one (BOGO) package for clients who sign up for it with a friend. By the way, you can set up custom discounts and service packages through Schedulicity.
If you spend as much as we do at Sephora, you’ve witnessed a points system firsthand. These customer loyalty programs offer increasing rewards as repeat customers spend more money.
While they’re more complex than the punch-card system, there’s a huge benefit: Increasing rewards keeps customers incentivized — sort of like a mildly addictive game — versus punch cards, which can often lose momentum.
(Think of all the punch cards sitting in a forgotten drawer at your place. )
Salon Loyalty Program Example: Offer increasing deals on your services over time. If someone books with you five times, offer them a 10% discount on their service. At 10 times, offer them a free cut. At 25, offer them a free cut and some special products for free.
(You can let clients know that they should remind you, or you can just count the total number of bookings they have in their history.) Don’t be afraid to get creative, giving names to the different levels in your marketing (BFF status, Girlboss status, Queen status…).
We’ve started to see membership-based loyalty programs increasingly in our industry.
The idea is this: Customers buy a membership to your business or salon to lock-in discounts that eventually pay for themselves over time.
Possibly the most common example of this is Amazon Prime.
Salon Loyalty Program Examples: Actually, these are pretty simple to set up through Schedulicity’s Packages feature and built-in payment processing.
1. Offer a package that gives customers 15% off blowouts if they buy 10 at a time.
2. Or go wild and offer an annual “membership” package that includes four haircuts at a discount and maybe even special access to your calendar during the busy holiday season.
Do-Good Loyalty Programs
Perhaps the most uncommon loyalty programs — we’d love to see more of these going.
The idea is that, as customers spend more money at your business, you donate money to a cause you (and they) care about.
You’ve probably heard of TOMS loyalty program in which purchasing TOMS products means they’ll donate to developing countries in need.
How to Set Up a Successful Customer Loyalty Rewards Program
OK, so now you have some ideas and inspiration, but how do you know you’re planning a program that works? Here are some of our best pointers for getting started:
If you don’t have a customer loyalty program in place, anything is better than nothing. When in doubt, go punch card.
Crunch Some Numbers
You don’t want to give away so much that you’re not making money back, but too often, we see salons and businesses offer discounts that don’t impress customers.
Figure out what’s reasonable but still incentivizing. (15%-20% off is often a sweet spot.)
Ask Loyal Customers What They’d Like Most
Would they love a membership program?
Would they rather you offer discounts over time?
Pick their brains — especially if those clients happen to be your family and friends.
Use What You Have
Those tools are the ideal combination for setting up your first customer loyalty program.