This article discusses hair and nail salons in Singapore, and how package membership deals can be upgraded to drive revenue. One way to do this? Creative salon loyalty programs.
Recent statistics show that there will be growth in the hair care industry with revenues increasing to $199.1m USD in 2019 from $198.2m in 2018. This boom is encouraging salons in Singapore to invest their marketing dollars in customer retention over customer acquisition, thereby keeping as much revenue saturated within their salon as possible. One of the easiest and most cost-effective ways of doing this is through customer rewards and incentive programs.
Need for loyalty programs
In Singapore, the beauty and wellness industry (which includes beauty, skin care, nail care, slimming and hair removal clinics) tends to provide services through ‘Membership’ packages, which charges customers a fixed rate depending on the type and the number of treatments. It also tends to come with a validity period for the customer to make use of all sessions in a timely manner.
The above package from Bonita is an example of beauty packages that are most commonly used in Singapore. These packages tend to include a fixed number of sessions for a particular amount of money, and the ‘incentive’ works around discounted promotions. The number of services is increased at a comparatively lower cost as compared to buying individual sessions.
Toni&Guy: A great example of successful salon loyalty
Salons look at these packages as a source of revenue generation, but relying on package deals alone does not contribute to customer retention. International hair salon brands such as Toni&Guy have switched their focus to customer retention by launching Reward Programs that might attract new customers and make the existing customers loyal.
Toni&Guy’s Rewards Program offers exclusive offers and gifts for its Reward Card members. A member of Toni&Guy Rewards will not only experience the privileges of salon services but will also get affiliate offers from well-known beauty, entertainment and lifestyle brands like Elizabeth Arden and essie, among others. The ‘top client offer’ allows customers to redeem spa sessions and also win some tech goodies like iPads – a great way to incentivize customers to stay loyal to the brand, and perhaps something worth replicating in Singapore.
To stand a good chance at competing, local businesses must understand how consumer loyalty programs will extensively help them in client engagement. Now, the industry largely operates on selling packages because packages are useful when it comes to generating immediate revenue. But where most packages fail are the very nature of the package itself: a quick search will show you that packages come hand in hand with hard-sell tactics that turn customers off.
Rewards programs, on the other hand, thrive on providing rewards and privileges to the consumers on a regular basis.
Benefits to the consumer:
Hair and nail salons have the potential to offer a number of unique incentive programs to their customers. For example, a stamps-based program allows customers to redeem free services after reaching a specific number of points, the customers can be gifted a free item which would motivate the customers to stay loyal to the brand and to make it a point to repeatedly purchase from the same brand.
Benefits to the brand:
Creating a rewards program can help brands understand their customers’ buying patterns and helps business make key decisions on inventory and promotions, and upsell to customers where possible. Currently, hair and nail salons use tactics like offering discounts to their customers in the form of package offers, referral programs or with social media tactics like offering discounts for ‘check-ins’ or ‘likes’ on Facebook. But such techniques help to acquire a handful of customers, and lose effectiveness quickly as it can appear gimmicky and not sustainable.
A quick example in the optical industry: when eyecare retailer Optik Seis in Indonesia found that customers were unlikely to consider the store they were purchasing contact lenses from, and were more likely to be loyal to the brand of contact lens. Using Riverview’s KEEP platform, Optik Seis delivered a stamp-based loyalty app for customers who purchase contact lenses, offering them a free box of contact lenses after a certain number of purchases were met. As a result, Optik Seis saw a spike in member registration and user engagement via the app. This helped both create emotional loyalty with the customer and drive their bottom line.
Through loyalty programs, brands can also know who their best customers are, and can target specific rewards to their demographic accordingly. Rewards and incentives are great tools to help consumers to stay loyal to the brand.
Our take on the wellness space
The beauty and wellness space remains largely untapped when it comes to loyalty and retention. Consumers are much more experienced and knowledgeable about services and products that they are exposed to, and services that come as part of a packaged offer needs to constantly prove its merit or it loses credibility among customers. Creating and sustaining a rewards program helps businesses retain customers and keep them coming back for products or services that they could easily find in other places.
At Riverview, we’re all about mobile-first customer retention solutions. Our SaaS solution has helped our clients increase their customer’s lifetime value and revenue contribution by giving them the ability to track what types of communications and offers are most effective at shifting behavior. We put your customer’s experience at the center. Reach out to us for a free demo, or click here to download our Product Edition Sheet.