Loyalty reward scheme pitfalls to avoid

• Written by Colin Shove

Loyalty reward scheme pitfalls to avoid

Loyalty reward schemes are a time-honoured strategy for building and nurturing client relationships in the professional salon industry.

By offering rewards for regular visits, salons can encourage repeat business and enhance customer loyalty. However, not all loyalty schemes are created equal, and some can inadvertently harm your business if not carefully managed.

Here, we'll discuss common pitfalls of poorly run loyalty reward schemes and how to avoid them.

The "One Size Fits All" approach

One frequent misstep is implementing a "points per visit" system, akin to the coffee shop model where a client receives a stamp for every visit, leading to a reward after a set number of stamps. While straightforward, this method doesn't account for the varying value clients bring. A client who comes in weekly for a quick blowdry accumulates rewards at a faster rate as another who books extensive, high-value treatments less frequently. This discrepancy can lead to over compensating very regular clients and under rewarding lucrative clients, who spend more.

Misguided discounts

Offering discounts as rewards, such as money off a future appointment, might seem like an effective way to ensure repeat business. However, this approach often reinforces existing client habits rather than encouraging additional spending. For instance, a client who routinely books a cut and finish every eight weeks will likely use a discount on what they would have purchased anyway. This results in reduced revenue for the salon without actually enhancing client experience or encouraging them to try new services.

Lost opportunities for engagement

The allure of getting something for "free" after a certain number of visits is a common feature of many loyalty schemes. Yet, when the reward is simply a free iteration of a service the client regularly uses, it misses a critical opportunity to broaden their engagement with your salon's offerings. Instead of incentivising clients to explore other services they haven't tried, it merely subsidises a repeat purchase.

By being mindful of these pitfalls and adopting a more strategic approach to your loyalty reward scheme, you can create a program that truly enhances client loyalty, encourages a broader engagement with your salon's services, and ultimately contributes to your business's growth. Remember, the goal is to build lasting relationships with your clients, making them feel valued and appreciated every step of the way.

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Written by Colin Shove

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