When Joey Coleman, author of Never Lose a Customer Again takes the stage at Serious Business, which will be held in New Orleans January 20-21, he’s planning to illustrate how valuable existing clients are to a salon, while sharing some strategies to drive client retention.
In this exclusive interview, SALON TODAY had an opportunity to catch up with Coleman and get a one-on-one preview:
ST: What is the impact of a lost customer on overall profit?
Coleman: “Researchers out of Harvard Business School and Stanford University, as well as Frederick Reichheld, who developed The Net Promoter Score, have shown that a 5% increase in customer retention leads to 25-100% increase in profits. That’s because with each incremental customer you keep you’ve already absorbed the marketing and acquisition costs associated with attracting that client—a retained client is more profitable to your salon than a new one. In addition, the longer someone is a client of yours, the more loyal they are, and they’ll tend to give you a larger share of their wallet by buying additional services. They also are more likely to refer more business to you. So it’s a multi-layered effect.”
ST: Many salons rely on loyalty point programs or pre-booking strategies to increase client retention—but you coach companies to curate experiences. What would that look like in a salon?
Coleman: “A loyalty program that gives you a few bucks off a service you already purchase isn’t really a behavior driver for most consumers—but an opportunity to earn something new for free is. For example, I had a dentist that offered a free whitening service after so many cleanings. If you offered a free facial or massage in your spa after so many haircuts, most clients are going to take you up on it. And many of those clients who had never had a facial or massage will enjoy the experience enough they’ll book it again. But there are a lot of things you can do to change the experience, for example offer me a beverage when I come in or have a bank of phone chargers I can plug into while I wait. I had one stylist that knew I traveled extensively and that I tended to only book an appointment when my wife complained. She started texting me reminders a week before I should be coming in and asking me what upcoming days I was in town. She personalized the service to my needs.
“One thing every salon can do is improve their customer relationship database. Whenever a guest walks out, the stylist should jot down two or three personal notes they can ask that guest about next time. ‘How did your big speech go? Were you able to find a new school for your son?’ Those little things make your clients think of you as a friend—like you are their favorite.”
ST: Your book details eight phases of the customer experience, and you say many companies lose a guest at Phase 4 or 5. What are those phases, and why is this a difficult transition for companies to master?
Coleman: “Stage 4 is Activate and Stage 5 is Acclimate. Activate is the first official customer interaction—the first time the guest comes in for a haircut. Acclimate is what happens between that first haircut and the second. While some salons will try to get that guest to book their next appointment before they leave, they typically have no communication with first-time clients once they walk out the door—they sit back and wait for the client to call. This is the time clients are learning how to do business with you and sometimes you need to reach out and hold their hand. Let them know how far in advance they should call to get on the appointment book, what days does their stylist typically see guests, outline some of the other service you offer. Help them understand how your systems work.”
ST: You think salons and stylists are lucky, why?
Coleman: “For the price point you charge, you have more one-on-one face time with your customer than almost any other business. And, you’re looking at each other in the mirror and the client knows there is a cultural expectation to talk. Take advantage of that opportunity to build a personal and emotional connection. Get into a substantive conversation with your client and use it to build a relationship. In an increasingly digital world, don’t miss the opportunity to create a remarkable analog experience. Personal interaction is something that everyone wishes they have more of—don’t miss the opportunity.”