Business Memberships are considered the holy grail of scaling a business towards unimaginable growth. They not only help you in scaling your business to greater heights but also provide a way to build a bond and long-lasting connection with your clients.
Coming from personal experience, running a Salon Membership in our Salon, helped us almost triple our revenue and staff in less than a year. It was one of the best decisions we ever made and we are still seeing remarkable benefits from it.
THE DIFFERENT TYPES OF MEMBERSHIP PROGRAM
So before diving into how Salon Memberships can turbo boost your Salon’s growth, let’s have a look at what a Salon Membership is and what are the different type of membership programs and schemes you can offer within your Salon.
FIRST; WHAT IS A SALON MEMBERSHIP?
Simply, Salon Memberships are either monthly or annually paid subscriptions, where the members receive a benefit for that charge. This is normally done through the exchange of products or services which make the long term subscription good “value” for the client and the upfront or guaranteed income lucrative for the Salon.
Typically there are three types of membership schemes which a salon could offer:
What is it? This membership scheme generally involves the client paying a pre-set monthly or yearly fee and receiving a discount on different salon services and products.
How does it work? With this membership plan, a client joins the salon for a month or year, pays a monthly/annual price and receives a percentage (%) discount on all or maybe selected products and services.
For example, pay £75 / month and receive a flat 30% off of all Hair Styling Products and Services every month.
This type of membership plan is particularly attractive to salon owners because the upfront payment helps with cashflow, the perceived financial commitment to the salon owner is very small, and it encourages client loyalty for the duration of the membership cycle.
Be aware though; the perceived low financial commitment may be more than salons think, if they haven’t got their pricing structure right. Plus, although this membership may entice your current clientele it may dilute already big spenders in the salon and is unlikely to attract to new clients.
What is it? In this membership system, a client will pay a monthly or annual payment and get a certain or predefined set of services free (covered within the membership fee)
How does it work? A client joins the monthly membership and gets packaged services every month. For example, the monthly package services can include 5 blowdry appointments, 2 hair cutting/styling appointments and 1 eye brow tint appointment per month.
This type of membership plan can generally increase the workload on your staff to fulfil the commitment, without significant increase in income, so be prepared to handle that. However, increased foot traffic and customer engagement, opens up substantial opportunities for upselling and converting to other services.
What is it? This membership charges a client a flat monthly fee for a specific unlimited service.
How does it work? A client joins the monthly membership plan and gets unlimited access to a specific service. For example, unlimited blowdries for £50 / month.
Similar to packaged services membership, unlimited monthly memberships keep your seats filled and provides a tremendous amount of opportunities for getting close to your customers and upselling them more.
This membership plan is generally the most popular type of membership plan out there among both clients and salon owners. It is usually the cheapest membership option so clients usually don’t have to spend a huge amount and with only one focused service, salon owners find it easier to manage than providing multiple services as part of other membership types.
So now you understand what a salon membership is and what are the possible different membership models, let’s see why your salon should be offering them.
A – IMPROVED, CONSISTENT AND RELIABLE CASH FLOW
Let’s agree on this. Regardless of how small or large, your salon is, above all else having a consistent and predictable cash flow is the dream. It makes the otherwise stressful life of a Salon Owner so much easier.
With automatic monthly membership payments, salon owners know that a certain and guaranteed amount of revenue is coming into the salon every month, which helps them plan their finances with greater precision.
Moreover, each client might not utilize the membership to it’s full potential, but they still will be charged for the monthly membership.
B – RETAINING EXISTING CLIENTS AND CONVERTING THEM TO SUPER FANS
A monthly membership will force your existing clientele to stick with you and use more of your services and seat time. If you play that increased engagement right, you can convert those clients into ambassadors that drive in more referral friends.
However, to ensure that they become your true fans, you need to deliver high value and quality in return for their subscription fees.
C – ATTRACTING AND ACQUIRING NEW CLIENTS
Following from the benefits of creating super fans and gaining referral interest; a salon membership plan can easily open doors for new clients. In B2C businesses like salons, word of mouth referral or personal recommendations are gold dust.
Salon Experts believe that selling a membership is much easier than selling a service, as it offers more privileges and benefits than the standard set services.
And don’t forget about your super fans for bringing you more customers. Give your existing clients or their referred friends an added benefit, something free or anything that adds value to their recommendation.
For example, refer 3 friends and get 1-month subscription free or bring in a friend every month free of charge.
Your members will love it as it gives them either the opportunity to get something for free or help their friends and turns them into your Super Fans.
D – INCREASE BOOKINGS
When you open your salon to a membership, naturally you will get more bookings and busier schedules for your team. A salon membership system can dramatically increase the amount of foot traffic and appointments within your salon.
Imagine 100 members coming in at least once per week. This will result in over 400 more appointments/month, the significant upselling capabilities they bring along will result in more regular appointment for your salon.
Be prepared for it though, you still need to offer value for money and that means the level of service and number that your clients perceive to be value for the money they are paying.
E – MORE PREBOOKINGS
Another significant angle to a salon membership is that it becomes part of the weekly / monthly routine like other lifestyle memberships. For example, if your customer is paying monthly for a yoga club, they usually add it as part of their routine as not only does it help them stay healthy but they are also paying for it.
Similarly, salon memberships become part of their routine, they more frequently attend the salon and become accustomed to upholding a certain level of appearance. This provides an opportunity when the client visits for regular services as they will have become used to regular and frequent visits to the salon; prebooking their next colour, or cut becomes part of the routine too.
F – REDUCES LOAD AND RELIABILITY ON YOUR TOP STYLISTS
From my own experience, I found this to be a very big issue specifically in our industry and salons face significant stress due to this.
In most Salons there is a traditional hierarchy, set mostly by experience. Generally because of seniority the higher up the ladder the larger the clientele and busier the team member. Disregarding specific qualifications and price most of your clients would want to be looked after by your top stylists.
But if that stylist goes on a holiday or worse leaves the salon, you will see a significant drop in your customers.
The good news is that a membership plan can easily take care of this issue.
With a membership system in place, your clients will have the opportunity to be serviced by different stylists possibly on every visit to the salon. This creates a loyalty shift, from team member to Salon, if now a stylist goes on holiday or leaves, the client will already have built familiarisation with other stylists.
G – ATTRACT THE BEST PAIR OF HANDS FOR YOUR SALON
If you are building a progressive salon that not only has more incoming customers and a healthy revenue, it will naturally help you attract the best talent out there.
Contrary to what you might think, it has been shown that a busy team is a happy team, and if a salon is doing well and its staff are productive and getting a good income, they will tend to communicate with their friends and connections in the industry.
Everyone likes to work with a salon that has a stable and consistent stream of incoming customers and is doing good monetarily.
H – MORE TIPS FOR YOUR STAFF
This shouldn’t come as a surprise – a salon which has more incoming customers and busy staff, chances are that those stylists will be making big with the tips too.
Moreover, clients are under the impression that they are not paying for the service or they are not paying enough for the received service under the membership plan. Therefore, they will naturally try to tip the stylist for the heavily discounted services they are getting, which is brilliant for your staff’s motivation but also removes additional payroll burden from you.
I – INCREASED SALES
All right we saved the best one for the last.
Yes, membership systems help increase sales 3X in very very short time. It helped us increase revenue and staff 3 fold in less than a year and a huge clientele on our waiting list.
And this year, we are seeing a dramatic increase from last years figures too.
There are two major ways membership plans help to gain more sales.
- Monthly membership fees.
- Upselling the members.
If the revenue from monthly membership plans isn’t enough to justify having a membership system in the first place, then the added money from upselling will be.
Membership plans help you increase your customer’s salon’s time. Without a membership plan, even your loyal customers might visit you 4 or 5 times per year. But with a membership in place, it can quickly jump to 5+ visits per month and from those additional visits, there is a very good chance that either they will request additional services and if they don’t your staff better be offering them.
In our personal case, 30% of those additional visits resulted in more upsells – product sales and bookings, which propelled our profits significantly.
The primary objective behind upselling is to convince customers to buy in a product or service ( not covered with the membership plan) that they were not originally considering. Membership plans serve as a brilliant upselling technique and salon owners can sell more profitable services along the path of their membership.
Under the same umbrella as upselling is converting – a unique aspect of our membership was having clients of other salons as members, i.e. being part of the club but still remaining loyal to their original salon for other services. This can happen for 2 maybe even 3 months but eventually the clients “convert” entirely.
A. UNDERSTAND YOUR CUSTOMERS
Similar to any other business plan, understanding your audience first is one of the most important places to start. You need to know who your customers are, how often they visit you each month and what are their most and least used services.
For example, if you have a regular clientele who visit the salon 3-5 times per month, a membership plan might not be effective for your business.
Moreover, you need to know how add-on services and perks can impact the overall membership program and how you base your pricing. For example, will providing additional benefits for inviting friends to help you get more sales or reduce your overall return.
B. SETUP THE BEST MEMBERSHIP PLAN FOR YOU.
When you have a good level of understanding of the popularity of different services your clients use and their budgets, you now need to consider the membership services which most closely match this, but answers your business needs also.
Anything else filled beyond your salon’s needs may be attractive for the client but will be detrimental to your business model.
Before creating a membership plan, you can ask a group of your customers to understand what type of membership plan they will like and use, but the bottom line here is to create a membership plan that not only ticks your customer’s requirements but also doesn’t push your salon towards a loss.
C. SETUP THE PRICING RIGHT
Getting the ingredients of the membership is one thing but setting up it’s pricing the right way, is something else.
You need to ensure that you set the pricing in a way that not only drives profit but also is competitive with other salons in your area.
And on top of that, you need to know and evaluate your outgoings such as rent, salaries, taxes and other expenses that can affect your membership pricing.
Moreover, if you have chosen to offer different levels of membership – remember that most of the members will be using your lower and middle tier and only handful will go for premium. So, ensure that those 2 plans give you the best return.
HOW TO IMPLEMENT SALON MEMBERSHIP PROGRAMS
A. PLAN YOUR MEMBERSHIP CAPACITY
Every salon owners know that they can service a limited number of clients each day and there still be walk-in customers along with the membership customers.
For example, we were able to handle an additional 200 bookings from 40 members coming at least 5 times a month and 6 staff. But we weren’t able to handle an additional 20 members.
The answer to this isn’t just to do with the maths of X members per stylist as every extra member will add greater management time. It’s important to keep this in mind that your membership limit isn’t solely based on your current seating and stylist’s availability.
Don’t forget though, having a limited membership can make your offer look more premium too. Your customers will think that they are part of an exclusive group, which can only have limited numbers of people.
B. START INFORMING YOUR CUSTOMERS
Once you have everything ready, it will be time to start actually promoting it and getting members to sign up.
At the very minimum, you can place banners or posters outside and inside your salon or hand out flyers to every person coming in. Similarly, share your membership plan across all your social accounts, email and send SMS.
If you have the budget you can use your local newspaper or radio to broadcast your message or take help from a marketing consultant. You can also try doing a soft launch by just sharing it with some of your loyal customers before opening it up for all.
Just make sure that your membership system and its terms and conditions are setup before you start promoting it.
C. AUTOMATE THE ENTIRE SYSTEM
Salon memberships from the outset look like a great opportunity to scale your business to new heights. If implemented right, they can turn a small and vacant looking salon into a thriving brand in very short time.
However, to manage all the memberships, members and their appointment can become stressful and time-consuming, very quickly. Managing a single service membership takes 2 - 3 hours per day for one person – on top of the normal daily salon tasks.
Once we hit 60 members that time went up significantly and meant w