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Five Ways to Increase Profits With Memberships
Membership and subscription-based business models are on the rise. In fact, The "subscription economy" is predicted to grow to $1.5 trillion by 2025.
by Staff
April 5, 2022
3 min to read
*This article was repurposed with permission from Zenoti.
Membership and subscription-based business models are on the rise. In fact, The "subscription economy" is predicted to grow to $1.5 trillion by 2025.
Memberships offer long-standing relationships over one-off transactions, giving guests a more personal connection to their favorite businesses. The high-touch salon industry is perfectly placed to jump on this trend!
Some salons are already realizing the benefits of memberships. Data from salon software provider Zenoti’s 15,000-strong customer base shows that membership sales improved as much as 55% last year.
In this article, we’ll cover five ways you can increase profits with memberships.
1. Promote brand loyalty (and more guest visits!)
Your regular guests might only visit your salon 4 or 5 times per year, but membership programs encourage them to book more often. This can be to gain points, special rewards, a discount on purchasing multiple sessions upfront, or simply because it’s part of the deal.
A membership program strengthens relationships between your brand, providers, and guests. When someone is committing both time and money to your business, they are less likely to be tempted by new salons opening nearby.
2. Increase revenue
With regular upfront monthly payments, you can be sure of your minimum income every month. Having a solid revenue foundation from monthly members allows you to invest in your business without taking undue risks. It can help with budgeting for regular and expansion costs, and give you access to funding if you need it.
3. Save on marketing costs
With a dedicated base of members who are excited to use your services, you don’t have to work as hard to reach them with offers and promotions. Let your members be the first to try new products and services, and soon enough, you’ll find that word about their benefits spreads to the rest of your guests too.
4. Enjoy greater appointment utilization
Operating on a membership model gives you a great awareness of how many members are likely to be visiting each week and what treatments and services they will be visiting for. By knowing your members' visit cadence, you can ensure your staff utilization is on point by only scheduling the staff you need. This helps keep your chairs full and maintain revenue.
5. Upsell more
Having a membership model creates more touchpoints for product education and communicating that you are knowledge experts in complementary and superior products and services. Your providers also have more chance to provide guidance on what may be beneficial for a member's specific needs and goals. This brings the value of education to your guests while increasing revenue through upselling and cross-selling products.
Key Takeaways
Offering a membership model is a great way to strengthen the bond between your salon and your guests. Not only does it increase guest loyalty and recurring revenue - you can also tailor memberships to help you reach your business goals. For example, with offers around quiet times or new products and services.
Modern salon software can help you manage a membership program with ease. Find out how with our whitepaper.
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