A Definitive Guide to Referral Schemes For Your SalonMay 14, 2020A majority of marketing executives (64%) believe that businesses benefit a lot from word of mouth publicity. In fact, 82% of marketers increase brand awareness through word of mouth marketing strategies. These statistics show how important client referrals are for the salon industry. Salons tend to wrongly assume that digital marketing can fulfill all their marketing requirements. In reality, out of every 3 clients, 1 is recommended your salon by an old customer. This accounts for one-third of your client base! A common reason for disregarding word of mouth referrals and verbal publicity is because they’re deemed traditional and outdated. However, given the success rate of personal recommendations, the effectiveness of this tool can’t be denied. A flood of advertisements, social media posts, promotional emails, and messages can put off potential customers. Overselling can be a deterrent that cuts down sales greatly. However, client referral schemes and word of mouth publicity helps filter through the sales noise. Coming from a friend, recommendations seem more genuine and authentic. This factor alone pushes a lot of new clients to try out your services. Word of mouth publicity is the reason why buyers are convinced to give a new or expensive product or service a try 20–50% of the time. Not just that, clients brought to your business through a referral contact tend to become long-term clients 37% of the time. Thus, word of mouth is not only a promising start for higher sales, but also expands your customer base in the long run. Before jumping right into it, it’s important to give your referral campaign a structure and plan it out well. Here’s how to go about it. Set Long-Term and Short-Term Goals It’s important to know what you’re planning to achieve with word of mouth publicity. Knowing your message will help you save time and money in the long run. Why? It’s more important to increase your profits as well as your customer base. A good strategy can help you do that. Just bringing in a lot of new clients isn’t going to guarantee growth. New customers could be high-maintenance and hard-to-please clients who are a strain on your resources if you don’t think your message through. What you should be aiming for are clients who’ll like your services and enjoy the experience you offer. If you feel a certain client will not be a good fit for your salon environment, it’s pointless to chase after them. Keep your referrals focused on targets that can potentially turn into ideal customers. Make It Rewarding and Less Risky When you choose clients to execute a referral plan, you’re technically handing them a part of your marketing responsibility. Don’t underestimate the effort and time it takes to approach friends and family contacts and deliver your message. They too have busy lives and are working on a schedule. If not compensated in full, the task can be quite unrewarding. This is probably why no one volunteers for referral schemes. Another reason why clients might not sign up for the job is that it poses a risk to their personal relations with the contacts they bring. They can’t be sure if their friends and family are going to like your services; they’re trusting your assurance. If their relations come out dissatisfied, they won’t blame your salon as much as the person who referred you to them. In order to make the job more appealing for them, eliminate risk and increase rewards. Introduce a gift voucher or complimentary offer for the client. Also, assure them that you’re going to give their friends and family the best service. Hidden clauses like “free manicure + pedicure on services above $100” makes the scheme unrewarding and risky. Chances are that a new client may not spend much on their first visit. Such clauses penalize your reference clients more than they reward them. Pick The Right Clients It’s going to be worse for your business if you ask irregular and difficult clients to suggest new contacts. Chances are that they’ll refuse to bring more people in and even if they do, they’re not going to be profitable It’s important to identify customers who’re ideal for your business. This is how to filter them out: Spend generously on your services Are a regular retail buyer Praise your customer service Are easy to satisfy Recommend you to others without you saying it It’s important to restrict your referral sample to just ideal clients because you want to enhance profitability, not just your customer base. It’s ideal to let ideal clients do the job, because they’re more likely to bring people like themselves. Also, if ideal customers have already been recommending your services among their social circle, the risk doesn’t entirely lie on you. If things go down the wrong path, you wouldn’t be completely to blame. With similar spending patterns, likes, and expectations, new clients are more likely to return after the first visit. Setting Up The System Asking clients to do this job for you is more a request than a duty. Therefore, it’s better if it’s done in person so that the client doesn’t feel manipulated or used. There’s no better time to set up the referral system than right after a thoroughly enjoyable service. Clients are generally delighted to receive a Recommend a Friend voucher by their preferred stylist themselves. Creating the possibility of enjoying the same service by the same stylist with a friend is an exciting prospect! The card itself can also be a deal-breaker. The more attractive the layout, the more likely it is to not be kept and forgotten. It should exude a warm sense of welcome which invites their friends to check out your salon. A simple, friendly, and eye-catching design will do the job. It’s important to state the offer clearly on the front so that clients can rest assured that there’s no catch in the fine print. Adding space for them to punch in their names can also add a personal touch to the card. Any details (timings, venue, days, etc) can be printed on the back to avoid clustering on the front side. Train Your Team It’s always a better idea for the stylist to ask for a referral request than the management doing so. This makes it seem more personal and heartfelt. The personal bond that clients share with their stylists will come in handy during this process. However, it’s not only important for clients to contact their friends and family, but also the salon staff themselves. It’s important to instill a sense of responsibility in them for bringing in as many promising clients to the business as possible. It’s quite likely that the staff will forget in some time and will need a reminder. But how do you incentivize team members? You can motivate your team to refer the by introducing monthly prizes for best performance. This will offer a financial incentive to staff members that lets them make more money without working over time! Looking for ways to expand your client base? With the help of the experts at Salon Income Booster, businesses can increase their hair and beauty salon income by improving salon retail merchandise and maximizing revenues. From marketing strategies to income generation, we have a solution for everything to help you get a wider client base for your salon. We also assist new players in the industry by helping them with investment plans and offering consultation. If you’re looking for ways to launch a referral program, get in touch with us first!