Best Practices for Stabilizing Your Salon's Income

As we all know, the salon business has a natural ebb and flow--it’s typically crazy busy for the holidays in November and December, with a lull in the following months--you know the drill. With the new year, and especially with uncertain times ahead, this is a good point to look for ways to help stabilize your salon’s income.

Foster Growth

Naturally, increasing traffic through your business is the best way to boost income, but finding new clients and nurturing them into regulars takes time and effort. Instead of waiting for a lull before seeking new clients, creating an ongoing program to generate interest is highly advised.

No matter the economic climate, asking existing clients for referrals is always a good idea. After all, there’s nothing quite like word-of-mouth endorsement to help fill your chairs. Just make sure you’ve got a solid system in place to ensure clients are properly credited and thanked when their recommendation turns into a successful booking, let alone a loyal client.

Tap Ongoing Lead Generation

Another idea is to use lead generation through your website and social media to form a funnel of marketable leads for your services. You’ll want to create a landing page with an intake form so you can gather data from people and market your services to them. Once you have the landing page, create an offer, whether a discount for new clients, a giveaway, or some other idea, and promote it anywhere you can to generate interest.

According to Derek Hull of the marketing platform Salon Ninja, you want to share links like crazy when it comes to lead generation. “Having links on your website, in social media, and on your blogs, business cards, and all forms of advertising, is essential. You want to create a direct path to your landing page to get people to step up and offer you their information.”

Hull goes on to explain that people throw marketing out there as if it’s a needle in a haystack versus pinpointing a market. “Don’t just cast a wide net and go for every man, woman, and child ages 1 to 60 in your marketing efforts – that’s just not effective marketing. Instead, market to what you need. Develop your client avatar, which is basically your ideal client. Then think like that person and decide what you would want to receive in marketing.”

Ads on Google and social media are great ways to bring new leads in for your area; just be sure you narrow the search to your immediate location and only for your ideal client. Depending on the outlet, you can narrow the pool by gender, age, interest, income, etc. As leads come in, have a system in place to nurture them into clients. Think drip campaigns, text message marketing, and even reaching out directly by phone to invite them in for a consultation.

Lead generation efforts will help you keep a steady flow of new clients walking in your door, hopefully, to stay as loyal, long-term clients.

Here’s how one new client can turn into a healthy profit center for your salon:

• You have a new client who schedules a haircut for $75.
• They return for five more appointments that year, generating $375.
• If you set a goal of 10 new clients in a month, and all become repeat clients with 6 appointments per year, you’ve added $46,500 worth of new revenue to your business.
• Now imagine carrying that forward month by month, year by year, then think of the potential for upselling, retail, and referrals.

Nurture for Retention

Now that you have a system in place for driving new leads into your business, let’s look at your existing clientele. To keep your current clients happy, consider offering a rewards program and promoting incentives to drive more sales. They’ll love the idea of accumulating points that they can cash in later for products and services.

A good rewards program can encourage more spending but can also help shift other client behaviors. You can essentially decide what actions you want them to take and then reward them accordingly. For example, if Tuesdays are a slow day in the salon, offer more reward points for scheduling appointments on that day. Or, if you want to increase online bookings, add reward points for each appointment they schedule using your booking app. This method may have a limited effect on your income but will help shape how you manage your resources.

Up the Frequency

To help increase your income, encourage your clients to visit your salon more often. You can offer memberships, packages, and rewards program incentives to encourage added visits, but also consider implementing an online booking feature.

In a study of online scheduling by Rosy Salon Software, it was discovered that those salon clients who booked online tended to come in more often. When clients made their own bookings online, the average amount of time between visits was four weeks and five days. In comparison, when clients called in or pre-booked in person, the average time between appointments was five weeks and six days. With some quick math, it’s easy to realize that online booking can lead to two extra appointments per year per client.

Offer Add-ons to Upsell

Upselling is another way to increase income from existing clients. Ask about add-ons like a deep conditioning treatment or a gloss over the top to keep their color vibrant longer. Send a promotion for waxing services to help grow that part of your business. If your business includes makeup or spa services, offer incentives for facials and massages. Even get creative with package deals for upcoming holidays: couples massage for Valentine’s Day, mother/daughter (or son) experiences for Mother’s Day, grooming packages for Father’s Day, etc.

Drive Retail Sales

Between increasing in-salon retail sales and using eCommerce to recapture sales lost to outside-the-industry retailers, product sales can help your bottom line. But first, make sure that your team has prioritized educating clients on hair health and the benefits of professional products. While in the chair during and after styling, and again at check out - retail needs to be in the client’s path, so they are reminded to keep up their look at home using the proper products and tools.

“If you ask consumers who their number one influencer is when it comes to hair care products, nine out of ten will say their hairdresser. However, most hairdressers don’t offer their clients the proper knowledge of home care,” explains Jim Bower, former salon owner and current CEO of SalonInteractive. “If you are putting something in your client's hair, you should explain to them why and what you’re using.”

You can also encourage your clients to take advantage of product subscriptions. It’s a feature available through an eCommerce platform where your clients sign up for regular deliveries of their go-to products at the intervals they set. So, shampoo and conditioner can show up every six weeks, for example, while a client’s favorite styling paste ships every few months instead. Subscriptions are a great way to keep your clients happy while increasing your passive income.

Add Another Layer of Income with Memberships & Packages

A great way to create recurring income is to offer memberships and packages in your salon. When it comes to memberships, blow-dry services come to mind. It’s easy to come up with a plan where clients can buy into a membership for a certain number of blowouts per month for the year.

However, memberships are not limited to the blow-dry club. There are plenty of ways to secure memberships for men, women, kids, and even families. By offering a haircut membership for a trim a month, an occasional facial wax for women, or a shave a week for men, you can look forward to recurring income that you can count on.

You can also create some fun options with packages. Consider a family package, where there’s a haircut per month for any member of a specific family. Or, a client can buy six lip wax treatments for women or a shave for men and get the seventh for free. You can also bundle products and services. Think aftercare for texture or smoothing treatments and color care for any hair color service. That way, you know clients are using the right products to protect their investment.

Assuming you’ve thought through the logistics and your team can manage the workload without added costs, membership and recurring packages make sense - and their fees become a stable income source that you can bank on.

Prepare & Motivate Your Team

To make any of these initiatives come to life, you’ll want to get your team on board. To do so means strategizing tactics, developing and enforcing processes, setting goals with your team as a whole and individually, then rewarding them for stepping up. Monthly meetings with the team and individual coaching sessions are a great way to move things along.

Your team can participate by asking their clients for referrals, enforcing a rewards program, upselling and cross-promoting services, and selling retail, memberships, and packages.

For your referral program, have service providers ask their most loyal clients to recommend your salon and their stylist to friends and family. Set a specific number and timeline to complete the task. You can make it an ongoing project and have them target a certain number of clients a month or do a referral drive at a certain time each year. Suggest verbiage like: I’m looking for more clients just like you. Would you consider referring me to your friends and family?

With a rewards program, make sure your team knows or has access to the breakdown of points and encourages certain actions in order for clients to accumulate these points. Even help them with some verbiage to make the process easier for them.

For example: 

• Because you’ve been such a great client, I’ve enrolled you in our rewards program. You can accumulate points for every visit and cash those points in later for products and services.
• Did you know that you can earn extra points if you book online? Let me show you how to do that.
• If you’re available to come in on (this day), you can accumulate points even faster!

Upselling and cross promoting your salon’s services should be a part of your team’s everyday mindset. Review the opportunities with your service providers and set some specific goals for each month for them. For example, make adding conditioning treatments a priority for the dry winter months, cross-promote your spa services for another month and encourage waxing services as summer approaches. Set the bar, review expectations, give them the tools they need to succeed, then reward them for the effort. Maybe even run a contest with a prize for the service provider who upsells the most add-on services.

The tactics are very similar for selling retail, memberships, and packages. Set goals for your team, help them with tactics and verbiage to use with clients, show their progress during the process, and reward them accordingly for a job well done.