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Originally published here by Neil Ducoff
The dilemma for salons/spas is that they suffer both the loss of revenue and client loyalty when a busy service provider leaves.
The salon/spa industry is known for its notorious employee turnover rate. It is also ground zero for the business wrecking ball known as a "walkout."
Owners hire stylists, estheticians, massage therapists and other service providers with the expectation that they should "build" themselves.
The thinking is that the more service providers fill their columns on the appointment book, the busier and more successful the salon/spa becomes.
The overriding question all owners must answer is — Are you growing individuals or growing your company?
Look at all those client names on all those columns in the appointment book and ask yourself, "Are these clients loyal to my company or the names at the top of the columns?"
FACT 1: If you're growing individuals, be prepared to lose clients, revenue and cash flow.
FACT 2: If you're growing your company, your systems, culture, teamwork and compensation model must be focused on creating client loyalty to your company.
The salon/spa industry is long overdue for rethinking its understanding and approach to creating client loyalty to the company.
Here are my No-Compromise Leadership strategies to create client loyalty to the salon/spa:
Build something of value: There's a reason salons and spas have such a low resale value. It's because client loyalty to the business is questionable. If one or more of the employees don't like the new owner, all they have to do is relocate and a good percentage of "their" clients will follow. That's how most salons/spas are designed.
• KEY: To build value into your salon/spa, everything about your company and the client experience must be redesigned around teamwork, systems and consistency.
Stop being a "booking agent": If you're all about building individuals, you are playing the role of a "booking agent." You're essentially driving clients and business to your service providers to create cash flow. You're also playing the same game as most of your competition.
• KEY: When a client calls your salon/spa to book an appointment and the response is something like, "Who with?", you're a booking agent. When the response is something like, "What would you like to schedule and what day and time work best for you?", you're making the skills of your entire team available to each and every client. These may not sound like a big deal, but they are, in fact, huge.
Retire "request rate": Tracking request is a relic from a bygone era. All it tells you is who's building a following. That's why I prefer calling request rate your "walk-out factor." The higher a service provider's request rate, the more locked in clients are to that individual.
• KEY: Your first-time and existing client retention rate report should tell you the number and percent of clients returning to other service providers. The higher that number and percentage, the more client loyalty to your company.
Teamwork business model and culture shift: Intentional or not, chances are your business model leans towards building individuals. Your language, the critical numbers you track and evaluate individuals on, and your systems, are designed to build individuals. That means a redesign of your business model and a culture shift is in your future.
• KEY: Breathe. This is a major undertaking that will require extensive planning, training and execution. Talk to Strategies if you would like to be coached through the process.
Reeducate your clients: You trained clients to request the same service provider. That is nothing more than the path of least resistance. Get new clients in the door, assign them to a service provider and hope the client returns to that individual.
• KEY: Without a thorough and scripted client orientation process that details your team-based approach to services and its benefits, there is no reason for clients to experience the skills of your entire team. It's going to take time. Some clients will love it, and some will prefer to request the same service provider. Be persistent and consistent and the shift will gain momentum.
Client loyalty is earned: Everything I described here requires leadership, systems, training, relentless information flow, and, more importantly, the delivery of truly extraordinary customer service.
• KEY: The only way to separate your salon/spa from the competition, grow value, and provide excellent employee growth opportunities, is to do what your competition is not willing or capable of doing.
Process what you read here. Do not allow "It won't work in my business" thoughts to cloud your thinking. Booth rental and suites are feeding off the old "build individuals" business model.
The days of rebuilding your salon/spa over and over again because of turnover and watching "your clients and cash flow" relocate down the street can become a thing of the past.