Business | Are Loyalty Programmes Worth It?

[The Ed.]

One of my favourite salons in London Town runs a loyalty programme. They have two salons in West London and each time I go they stamp my card. I get a stamp for having a treatment or for popping in to buy a product. Once I've got six stamps I get £30 off a treatment or towards a product. I think that's a pretty neat deal and I have to be honest, it's not my closest salon, but I do go out of my way to get there just so I can get myself a little stamp.

But, it got my geek cogs turning. Can loyalty programmes ever backfire? American Airlines would have to admit that it can. Ok, I'll admit, very few salons are working with the same kind of numbers as an international airline, but when they offered their AAirpass in 1981 they found themselves out of pocket to the tune of millions of dollars. Pass holders paid $250,000 and earned frequent flier miles on every trip and got lifetime memberships to the Admirals Club, American's VIP lounges. For an extra $150,000, they could buy a companion pass. It didn't work out so well for American Airlines. They've since been 'winding down' the offer.

In theory, loyalty programmes should be very cheap to implement. Once you've had some cards printed you should be ready to go. But, think your offer through very carefully. You need to do some research on your clients buying/spending habits. Consider what your clients spend on average each time they visit - that'll give you an idea of what you can legitimately offer them after say, six visits, without getting out of pocket.

Think as well, about your customer. Studies show that high-end customers hanging out at the luxury end of the market are likely to be less interested in loyalty programmes. If you're offering space, exclusivity, luxury treatments and fabulous extras then you're already providing them with exactly what they want. In general, they don't mind paying the money as long as you're providing them with the kind of luxury service they want.

It's all interesting stuff and I wanted to know what you thought of loyalty programmes. Do you run them? Do they work? Has anyone ever had a loyalty programme blow up in their face? Would you advise small business owners to go for it or to stay away from it?

Until then...geek on!

The Ed.

 

[mrslargelashes]

I think Loyalty programmes are a good thing for your reguLar clients. I offer a loyalty scheme, where on your 5th visit you get 10% off. I keep the cards so they don't get mysteriously 'lost'. My client gets a nice surprise when I tell them their treatment is slightly cheaper today as they have got their 5th stamp on their card. I also give 10% off to clients if they refer a friend, I don't advertise the fact I do this, I just like to give them a surprise at their next appointment. It rewards my clients, and makes them feel valued.

So they can work, if they aren't too OTT.

 

[millyspook]

I also offer a loyalty bonus, its on the back of my business card and once they have 6 treatments, they receive 25% off their next treatment. New customers love it and so do my existing customers. So many businesses these days offer discounts to get new customers but don't give their loyal, regular customers anything back, so its nice to do that.

 

[Lynne Baker]

Yesterday I attended the Cosmetic Executive Women beauty summit. One of the speakers (in fact, in my opinion she was the best of the day) was Joey Wat who is the CEO of Superdrug. She told us that one of the biggest complaints from their customers was the lack of a loyalty card so they introduced one. Now, I realise that Superdrug has a massive organisation behind it and that it's not possible for us mere mortals to carry put the same degree of data mining into it, but I think we can all learn from the big boys.
If you can't afford to do much you could always offer something which doesn't cost you a lot, like a brow shape or a fiver off, after x number of treatments.
Make your clients feel unique, valued and loved!

 

[rrtherapy]

I have a loyalty card. 6 stamps next infill for lashes is half price!! Clients love it. . they keep the card I stamp and date every time. But I Also keep my own record of dates and when they have been so I know when it's due.

 

[essentia]

I think in theory it is a nice idea but it does have to be worked out so that it is attracting more sales than you giving out for free and potentially running at a loss. I think that if you give a great service it will not matter if you have vouchers for this or gimmicks for that. I personally would rather re invest the profit into providing the latest treatments for my clients and having old fashioned values providing great service. I usually add on extra few mins service anyway or chat that little bit longer so they know I value them.