Pros and Cons of a Loyalty Program

Is a Loyalty Program Right For Your Salon or Shop? 

What You Should Consider Before Implementing A Loyalty Program 

Take a moment and really, really think about the heart of your business—we mean the very core, the very soul of it all. We mean the driving factor that keeps you heading into the shop well before the sun rises and closing your when it’s long past set. What’s exactly is the heart of your business?

More than likely, it’s your customer base.

Sure, your dreams and passions probably fit into really big boxes within that category, but without your driving force—AKA your customersthose dreams and goals simply wouldn’t happen. It takes clients to make your dreams come true, right?

The best way to keep that driving force chugging along smoothly? Make sure your clients—both regular and brand-new—feel valued, appreciated, and welcomed.

A great way to accomplish all of those things at once?

A customer loyalty program.

We know, we know—half of your probably hate the idea of half of you are intrigued by it, and you’re welcome to feel any way you want to about it, but we do ask that you hear us out.

Before we dive into loyalty programs, we want to make one important point—customer loyalty programs are not for everyone or every business. Sometimes, the pros outweigh the cons and vice versa.

Still, it’s important you know what they are before you decide whether or not a customer loyalty program is the right fit (or not) for your barbershop.

What Exactly is a Loyalty Program?

First things first, let’s get into the very basics and address exactly what a loyalty program is. This is a bit difficult to define so strictly—because every loyalty program will look different in order to meet the needs of each, individual business—so we’ll give you a really general definition. 

A salon or shop loyalty program is a reward system set up by you—the business owner, manager, etc.—to offer incentive for returning customers and new customers. A loyalty program can take on any unique form you want it to—points through your own personal app, e-coupons, free merchandise, half-off services, etc. 

Why do programs like these matter?

Well, for a lot of different reasons, but ultimately because it’s an incentive to keep your regulars on—something that’s financially prudent for your business. 

It’s about six times more expensive to win a new customer than it is to retain an existing one, and further, returning customers are likely to spend about 67 percent more than a new customer—so, it kind of goes without saying that boosting customer loyalty can really, really pay off.

The Pros of a Loyalty Program 

We already talked a bit about the benefits of a loyalty program, but let’s take an even closer look at how these programs can benefit you and your barbershop. 

They Incentivize Repeat Customers 

We know we just touched on this, but we think it’s a reminder that bears repeating—loyalty programs are enormously helpful in retaining repeat customers. While you’d, ideally, be able to attract new clients and maintain regulars, the harsh reality is, sometimes attracting new people is very expensive—so, if you’re able to continue getting regular business from repeat customers, you can give yourself (and your expenses) a little break. Remember, it’s six times more expensive to attract new clients (as opposed to keeping your regulars on)—and further, those repeat clients will likely spend almost 70 percent more than your new ones. 

They Keep Your Customers Happy & Make Them Feel Valued

A huge part of brand loyalty comes from customers feeling valued, important, and integral to your business—a customer loyalty program does that and more.

With a loyalty program, you’re rewarding your customers for returning to you, for recommending them, for purchasing so many services or products, etc. People want to feel like they’re being valued and that they’re appreciated for working with you—if you’re able to provide them with little extras—a free shampoo product here, a half-off color treatment there—you’re doing more than just keeping them as clients, you’re significantly boosting their brand loyalty. 

They Attract New Clients & Encourage Referrals 

When you implement a good loyalty program, people are going to talk about it—it’s that simple. 

Whether or not your program has a built-in reward for referrals, if your clients are happy with their regular services you’re offering, they have strong brand loyalty, and they’re reaping extra benefits, they’re absolutely going to encourage their friends, family, co-workers (you name it) to pay you a visit. It’s (relatively) inexpensive, in-direct way to tap into a new market and attract new clients. 

They Encourage Client Engagement 

Not only does a loyalty program encourage direct, client-to-stylist communication, but it also can help you with your online engagement. If you build social media and online incentives into your loyalty program (for example, if your clients get an extra “punch” on their punch card for checking into your shop on social media when they’re in for an appointment), you’re getting a lot more traction and a lot more engagement bang for your loyalty program buck. 

They Help Build Up Your Client Data & Info 

This is actually an enormous benefit. When people sign up for your loyalty program, they grant you the gift of their information, which is valuable, needed data that can help you make better business decisions.

With this data, you can learn so much about your customer base—what they love, what they hate, what you’re missing, and what you could do better. All of this results in better pricing, better services, and overall better business. 

The Cons of a Loyalty Program

Like they say, all that glitters isn’t gold—there are, undoubtedly, some cons that go hand-in-hand with your barbershop loyalty program. And while they might look different to you based on what your loyalty program looks like and who your customer base is, here are a few, generalized negatives you might face.

Loyalty is Pricey 

Here’s the biggest con—loyalty programs can actually cost you. If you’re not balancing your loyalty programs correctly, you could be facing a huge deficit in your profits.

Be sure you’re doing the right math before you implement a policy so that you can monitor your ROI (because, when done right, your program can have a positive ROI). 

It’s Hard to Differentiate From Other Salons 

Unfortunately, most salon or shop loyalty programs look exactly like every other salon or shop loyalty programs. You have the power to make yours unique, but know this—it’s really hard to balance differentiating yourself from other salons with a loyalty program that’s still profitable for you.

Asking for Information is Sometimes a Turn-Off

Not only can the data you receive from customers be a bit more limiting than you had in mind, but the simple act of requiring it could be a huge turn-off to some customers. 

There are a lot of people out there who are not into sharing their information with you—and if your loyalty program is all about making them feel valued while monitoring their behaviors within your salon, they might view that as a turn-off and not want to be a part of the loyalty program. In the worst-case scenario, they might not be interested in working with your salon anymore, either (that’s a big leap, but it is possible). 

If You Push it Too Hard, Customers Might Be Averse 

Loyalty programs can be great for you and great for your customers—and sometimes it’s hard to not push them on your clients. But with a loyalty program comes the responsibility of not being a total salesman about it—if you are, you could really push away your clients (which, is entirely opposite of what you want). 

So—what’s the verdict.

Are you ready as ever to implement a loyalty program for your shop or are you opting out? Whatever you decide, we want to know! Let us know what your plans are in on the comments. 

If you’re already running a loyalty program and have some additional pros and cons for us, don’t be shy—we want to hear from you! 

If you’re all about barbering business advice, then you’re in the right place, friends.

 Keep up with our regularly-updated blog here for more tips, tricks, insight, and advice for the barbering community!