A referral program is one of the most powerful and cost effective ways to promote your business. With little effort, they help you build loyal relationships with new and existing customers, so that you drive up your bottom line.
So, what is a spa referral program? It’s a system of rewarding customers who refer new people to your service. Very often, it’s a promise to give free or discounted products and services to the existing customer, as well as the person they refer.
Here at Artemis, we’ve helped over 1600 entrepreneurs build thriving beauty businesses. Through these partnerships, we've come to recognise many of the benefits an effective referral program can have for all types of beauty business. These include...
- Untapped potential - a recent analysis of 500 salons showed that 80% of salon owners get their clients by referral, and yet less than 3% have a defined referral program. Therefore, the potential for generating business via word of mouth is huge.
- Cost effective - While you need a little bit of thought and work to execute your referral program, once it’s in place, they bring in new customers with minimal effort. Plus, many management softwares make putting spa referral program ideas into action easy!
- Loyalty - People feel comfortable using the same services as the people they trust. Therefore, customers who are referred are typically more loyal than ‘walk ins’.
- Relationships - By rewarding existing customers, spa referral program ideas help you build rich, trusting relationships, keeping them loyal to your business.
- Hiring - Spa referral program ideas get your name out into the community. This can make hiring much easier, since people feel happier applying to companies that they’ve heard of with good reputations.
Now you know why spa referral program ideas are worth your time, let’s look at some of the spa referral program ideas that will get your business booming.
1. Create a Win-Win
As you brainstorm ideas, the first thing to remember is that you must make a profit.
There’s a risk that you offer a reward that’s too high, and jeopardize your business. Alternatively, you might offer too little, and fail to incentivize customers.
Therefore, however you choose to reward clients, make sure you strike a balance between these two. Do your research and monitor the results of your program.
Finally, don’t be afraid to tweak your referral program to strike the balance between profit and incentive!
2. Discount Your Services
Undoubtedly one of the best known, ‘tried and tested’ spa referral program ideas is called the ‘25/20 referral program’.
How does it work? It involves two steps - one where you reward the new client, and one where you reward the existing client.
Step 1 - An existing client invites a friend to try your salon - the friend gets a $20 credit toward any service they have not yet tried.
Step 2 - When the friend comes into the salon to use their credit, the client who referred them gets $25 credit toward product purchases.
So, why is this one of the best spa referral program ideas? Existing clients like the program because it lets them extend a special deal to their friends. In addition, they are rewarded more than the new client. They also get credit towards a product they probably haven’t tried yet.
3. Increase the Levels of Reward
Equally important to spa referral programs that make a profit, are spa referral program ideas that are generous. You must offer a level of reward that incentivizes customers.
If your initial reward doesn't work, offer them higher levels of reward (while keeping the scheme profitable!)
Giving customers a tempting opening offer is important. It's equally important to give them better gifts as they refer more people to your business. The people who make lots of referrals are some of your most valued clients. It’s your job to make sure they know that!
4. Avoid ‘Punch Cards’ - Track Referrals Yourself
When generating spa referral program ideas, and in particular ways to keep track of customers’ rewards, many small businesses turn to manual systems, such as punch cards or physical gift cards.
There are a few problems with these systems. Firstly, customers are prone to losing their cards, and never get to redeem their reward. If enough clients don’t collect their reward, your spa referral program ideas fall apart.
Secondly, manual systems make it harder to monitor how effective your spa referral program is. When you electronically track and record everything, it’s easier to see who generates the most referrals (so you can reward them!) and which referral schemes bring in the most revenue.
Many management softwares for small businesses have the tools to help you set up and monitor your spa referral program ideas.
5. Shout About Your Referral Program on Social
Naturally one of the best places to promote your spa referral program is through social media marketing.
Whatever platform you use, you should follow a few simple guidelines to create posts that convert.
Firstly, you should keep your message as simple as possible. If your spa referral program has several steps, play around with ways to make the message clear and concise. Your customers should be in no doubt of what they’ll get and how they can get it.
Secondly, make the benefit of the program clear to customers. This should be somewhere near the very top of your post. Once you’ve made the reward clear, customers will want to read about how they can win it.
Finally, give people a clear call to action so they know what to do next if they want to benefit.
6. Create an Email for Your Regular Customers
While social media is excellent, it doesn't always directly target the people who are most likely to take advantage your program.
The people who will take action are your regular customers. If they’re been using your services frequently, they’re most likely to have something positive to say about you.
In order to target this group, a tailored email is a great approach.
First, create a list of your regulars. You might determine this by money spent, services purchased or the number of times they’ve visited. Management softwares can create lists based on all of these criteria for you.
Once you have this list, create a simple, enticing email explaining the referral program. Include the key benefit of the program in the subject line and very near the top of the email. And don’t forget a clear call to action, such as ‘share our list of services with your friends today!
7. Train Your Staff To Talk About Referrals
Online marketing is all well and good. However, to really boost referrals, you need everyone in your salon to talk about your referral program all the time.
Therefore, train your beauticians to tell people about the discounts they can get if they tell their friends about you. Also, make sure your reception staff really talk up the referral program when people book in or leave the salon after treatment.
8. Earn Your Referrals
No matter the number of spa referral program ideas you execute, none of them will work unless you also deliver an exceptional experience. To create a flood of referrals coming into your spa business, you need to earn them.
Without doubt, the best way to do this is by treating your clients as though they were cherished friends. Tell them how important they are to you and how much you value them. Show them you care about them.
Furthermore, anyone that is important to your clients must become important to you. Offer advice, talk to, or meet with anyone who your clients want to support, whether that’s friends, family or colleagues. When you build trusting relationships with your clients, you will cultivate referrals organically.
Lastly, your location must be clean, comfortable and inviting. Plus, you must deliver top quality treatment, exude professionalism and really care about what you do.
If you do all of these things, then you can expect referrals to come thick and fast.
9. Be Patient
Lastly, it must be remembered that even the best spa referral program won’t work instantly. Some people will only come in for beauty services every six to twelve months. And their referrals may come in at a similar rate. Therefore, it’s important to think long-term.
As long as your spa referral program offers a strong incentive, and you tell people about them clearly and often, then you can expect new customers to come.
We know from experience that referral programs can be a great revenue stream for beauty businesses. Once you’ve got a program that creates a win-win, and have effective ways to promote it, you can let your customers do the rest of the work for you.
Generate the right list of spa referral program ideas, and you’ll have a thriving, loyal customer base in no time.
For more expert advice on how to boost your bottom line with marketing, check out our free ‘How To Grow Your Beauty Business Through Marketing’ ebook.