gift vouchers&loyalty schemes
Frequent Flier Programmes such as SouthwestAirlines’ ‘Sweetheart Stamps’ in the 70s andAmericanAirlines’ ‘AAdvantage Programme’, which was launched in 1981, are also considered the forefathers of today’s modern loyalty schemes.
In addition to the typical ‘Rebate Schemes’ as described above where clients receive an award after they reach a certain level of spending, other types of loyalty schemes include ‘Refer a Friend’, where customers are rewarded for bringing in new business and ‘Partner Reward’ programmes, where partner services such as hairdressing could be awarded to clients who demonstrate their loyalty to your salon.
While, all of the abovementioned loyalty schemes carry their own set ofmerits and drawbacks depending on the success of their implementation, the basic rule of thumb behind any loyalty scheme is to ensure that the scheme works for you asmuch as it does your clients.
make it work for you...
“Most loyalty systems revolve around the coffee shop idea of ‘Buy nine get the 10th free’. This does not work in the Beauty Industry. If somebody is happy to buy nine of the same service from you why would you give them a 10th free?With this mentality you are giving away something they would have paid for anyway,” comments Barry Quinn, Loyalty DevelopmentManager at Phorest.
“What appears to work better is to reward your clients with treatments they would not normally have. For example if you have a client who pops in every two weeks for a Spray Tan, when they reach enough points for a reward the system automatically offers them something which they have never tried before, a ‘Treat’. The idea is that they enjoy this
‘Treat’ so much that a percentage of the clients come back and pay for it again in future,” adds Barry.
Lisa Dunlop, National TrainingManager for Cuccio, agrees: “Salons often feel that they have to put on loyalty schemes to keep their clients coming to them, but I think that our beauty and nail clients on the whole are more than loyal, do we need to reward them by giving them a 10% discount when they would have come to us anyway?
“I am all in favour of the ‘Recommend a Friend’ scheme.What about giving your clients a card with a space for their name, when one comes back with their name attached the original client receives 25%off her next treatment, sounds like a lot but giving that client that little bit more will make them more likely to pass on your details, [and] you could have just earned another life-long customer!
“The new client [also] needs a reward but we don’t need to give them such a high percentage, I would treat them to an option of a couple of various treatments such as eye brow wax or toe nail paint, something that doesn’t cost you too much time in value or money but opens their eyes to the other treatments that you offer. It’s worth a thought, this way you are not always giving away money but rewarding new custom. Your business will grow and all it really cost you was the initial outlay of the card,” Lisa concludes.
play it safe...
When considering what type of loyalty system may work best for you and your clients, it is also worthwhile considering what type of schemes your clients may already be exposed to, as this will ensure that they are already familiar with the concept that you are trying to introduce.
“Everyone is familiar with the behemoth of all loyalty campaigns – theTesco Clubcard. Most of us have one our purse or wallet, or even carry a fob on our house keys,” says Peter Hesketh, Director of Smart Card Technologies Ltd.
“But, why would the UK’smost successful retailer feel it necessary to offer discounts and vouchers to their vast customer base? This question becomesmore poignant when you consider thatTesco already hadmajority market share long before the Clubcard was introduced.
“The same question could be asked of Boots – also by far the largest retailer in their
sector.The answer is simple. In order to maintain their position asmarket leaders they needed to getmore out of their customer base and prevent their customers from shopping with their rivals. In short, both of these retail icons had to understand their customers’desires better.”
Peter goes onto explain: “Let’s face it, it would be impossible for even themost friendly supermarket cashier to build up an individual knowledge of the thousands of shoppers whisking past their check-out each day. Even if they could, it would be difficult for every cashier to report that information back to theirmarketing department, who would in-turn send a voucher for sun-tan lotion to each customer precisely onemonth before they are due to go for a fortnight in Benidorm.
“But, by recording that information electronically and attributing every single transaction to an individual, that’s exactly what retailers do. [Therefore,] a loyalty card is a key to information thatmakes sure you can pre-empt your customers’next purchase... and with it you canmake sure your customers don’t shop with your rivals.”
Although it is unlikely that you will be looking to launch a reward scheme on a similar scale to that ofTesco’s or Boots’ there are stillmany aspects of the schemes which can translate to smaller scale operations.
“The technology developed by the big retailers is now in common use elsewhere and, as a result, there are packages on the market that enable small-businesses to offer their own-branded loyalty card schemes too. The trick ismaking sure that you use that data in themost effectivemanner,” suggests Peter.
Make sure your clients understand how they can collect points and howmany they will need to earn a reward.
“Knowing how regularly your customers shop with you allows you to notice patterns in their behaviour. In turn, this means you can invite non-regular customers back into your store on a more- regular basis by stimulating interest with discounts on products you know are of interest,” he adds.
74 GUILD NEWS
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