Marketing experts agree that retaining customers is far easier that acquiring them.  If that’s the case, then why do so many day spas spend so much money on marketing to new clients and so little on loyalty programs for existing customers?

The Value of Customer Loyalty Programs for Your Spa

The key elements to customer loyalty are listed below.

• Customer repeat buying behavior
• Customer referrals to friends, family, and colleagues
• Customer’s emotional commitment to your business/relationship
• Customer trust
• Customer spends more over time
• Customer satisfaction

The long and short of it is that loyal customers do business with your day spa more frequently and stick around longer - bringing greater revenue and profits for your business.

Justifying Your Loyalty Program to Management

According to a 2002 Marketing Metrics study by Griffin and Lowenstein, the average company has a 60-70% probability of a successful sale to active customers; a 20-40% probability of a sale to lost customers; and only a 5-20% probability of a sale to prospects.

Because a loyal customer tends to spend more, refer others, and costs less to service, wouldn’t it make sense to have a strong loyalty program in place? A well run loyalty program will improve your day spa profitability, grow revenue, and expand your customer base. Money spent on customer loyalty programs will:

• Increase total profitability – not just revenue growth
• Increase revenue profitability per customer segment (services, products, online sales, gift certificates)
• Increase total company revenue – customer attrition rate is lower
• Increase total number of customers – loyal customers refer others, thereby reducing marketing costs
• Improves services and products – loyal customers provide more feedback

What drives customer loyalty?

Customer loyalty is driven by many factors including:

• Attitudes – about your spa, its quality, and customer focus
• Brand image
• Customer experiences – overall quality of your products and services, including customer service and support
• Price – plays a role in how customers perceive value

Whether large or small, your day spa can put a loyalty program in place. Start by interviewing some of your best customers and get their input about various areas, such as:

• Satisfaction levels
• Familiarity with all your services and products
• Competitors
• Areas where they’d like to see change

Armed with this information, you can make decisions about product & services offerings, pricing, and post-sales service & support. This personal approach to your customers can generate a positive attitude toward your day spa, especially if your customers see that their feedback has been acted upon.

It’s then up to you to put the right programs in place. Consider:

• Points – applied toward future purchases
• Discount cards
• Rewards
• Special savings for select “loyal” customer groups
• Advanced notice on sales for “loyal” customers

There is no ideal, one-size fits all customer loyalty program. Each day spa must decide the right formula for their program.  The important thing is to keep your loyalty program novel and offer value for your customers.

Does Your Day Spa Need a Loyalty Program?

Customer loyalty programs take resources to manage and may not be right for every spa.  If you are a small day spa with a small customer base, a loyalty program may actually add headaches to your operation.  You and your staff know who your best customers are. It’s easy for you to reward them with a free product or add-on service in recognition of their loyalty. 

For larger day spas, those experiencing customer churn, or those selling online, a customer loyalty program is a good idea and may be critical to your long-term profitability.

In this competitive environment where every day spa offers similar products and services, preventing customer defection will have a huge impact on your bottom line.  The right customer loyalty program may be just the thing to jump start lagging sales.

Need help developing your customer loyalty program? Call Spa Marketing at 860-655-2283 to get started.