Seventy percent of salon guests never come back after a first visit. This is not a good number, but it’s accurate, according to Tom Kuhn, founder of Qnity, the company that founded the 2 to 10 Project that benchmarks the best financial practices of multi-location salons. Overall salon retention isn’t much better either, according to Kuhn.
If he’s right (and we know he is), the business of beauty has a serious marketing problem.
Salon marketing has taken many twists and turns over the last two decades. At Group 3 Marketing, we know all about those shifts because we have been involved with salon marketing for 20 years. We are leaders in marketing the business of beauty, with a client roster that involves manufacturers, distributors, salon chains and independent salons.
But even with our experience, we realized we have all been focusing on the wrong strategies. We talk about loyalty, but most guests are not really loyal to either their stylist or the salon, which is illustrated clearly by the paltry 30 percent guest retention rate.
In our 2010 Beauty for the Ages research project, one of the questions we asked was, “If your stylist left your salon would you follow him or her to a new salon?”
The results surprised almost everyone:
|Gen Y||Gen X||Boomers||Overall, less than 1/3 of Guests would follow their stylist. However, more than half are on the fence across all three demographic age groups. Younger Guests are more likely to stay at the salon. Gen Xers are most likely to be on the fence and older Guests (Boomers) are most likely to leave because of relations they may have built over the years.|
|No, I like my salon, other stylists are just as good||21%||16%||14%|
However, when you analyze the results they support the 70% defection rate—which should be disturbing news for every salon owner.
Salons install loyalty programs and some salons use their POS system to dole out rewards with little thought to whether these loyalty programs really drive sales or just drain margins. We brag about our “relationship” marketing programs, but if the defection rate is 70%, do we really have a relationship with our guests? Doubtful.
And, then there is the buzz about social media and how salons now have a tool to engage with guests. We’re not downplaying social media, but we are questioning the impact it really has on driving the business. Sure, it’s low-cost and easy, but is it worth it and is there a real return on investment? Can you show tangible results?