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Turning client data into profit

Posted on 13th May 2013 by Debbie Miller

Turning client data into profit

Most people would agree that successful marketing can impact the bottom line of any beauty business. Relationship Marketing is the new buzz and focuses on two ideas; keeping your best clients (spenders and new-client-senders) engaged and coming back while increasing the value the business gets from your other clients.

One of the best tools in increasing profitability from your marketing program is the 3Ms: Measuring, Managing & Maximizing.

Measuring

Find out who your high value clients are and understand their unique behavior. According to Pareto’s Principle, also known as the 80/20 rule, you should be focusing on rewarding and encouraging the top 20% of clients because your highest return on investment in marketing lives here.

  • How many do you have? Look at your Net Promoter Score report in Shortcuts and see what percentage of your clients are willing to refer a friend. These are the clients that will help you grow your profitability. We like them.
  • Who are they? Most likely they are visiting your salon on a fairly regular basis with an average of 4-6 weeks between visits. Their average ticket would be the sum of a cut, color, treatment and retail and if you also have skin or spa services they have played there as well. Look up your Top Spending Clients Report, your Frequency of Visit Report and Referral Reports to find these lovely clients.

Manage

Managing your marketing efforts entails making sure you have enough data and client details such as demographics and purchase history. Improving your profitability can be tricky if you are not managing your database properly. For example, clients with long hair schedule differently than clients with short hair. Long hair clients typically have a 90 day turn while short hair clients typically visit on average of 45 days. When you send one broad marketing campaign to increase traffic with, say, a 20% savings, your shorties are saying “cool, thanks I was coming anyway…” and your longies are saying “thanks, I forgot to make my appointment and my hair needs help!” So you are giving your short hair clients a 20% discount on a visit they were already planning on.

Another opportunity could be to create Color Clubs such as the Blonde Bombshells, Racey Reds and Brilliant Brunettes. You may think this is silly at first, but remember each one of these groups have specific needs. You will get a higher return on your investment by creating a promotion that speaks to them. Blondes could get a conditioning treatment with color, Redheads could get a semi-permanent gloss for intensity and Brunettes could get an ombre to customize their look.

Maximize

Maximize and protect your profit by using an automated system that provides key information that relates “how successful your offer is.” Avoid analyzing your marketing efforts based on how pretty you think it looks and focus on finding good opportunities to improve. For example, if you find that you are discounting more than the average salon, this will impact your profit. If the discount is too low, it will limit the response. You can find out if you discount more than the average salon using Shortcuts Scorecard, and you can also see if you are discounting more or less compared to the previous period.

Another great example of using data to improve your profitability is looking for opportunities to get more bookings is finding your slow times. For instance, if the data tells you that every Tuesday from 3 - 6pm has a lower volume of business, you’ll want to focus promotions on filling the empty seats. Maximizing revenue on slow days has a high return as opposed to giving discounts to client who would have come in anyway. Think about promoting specials during those times and get creative. You can also set these specials to apply automatically at the front desk.

Most of all, getting the highest return on any investment is having the discipline to stay the course. Set realistic goals and milestones to “check in” and monitor your results. Make the necessary changes by managing the data you are collecting about your clients which will maximize your profits.

about the author

about the author

Debbie Miller has been a driving force in education and building business strategies for more than 25 years with cosmetology schools, private salons, distributors and professional beauty manufacturers across the globe. Today, Debbie proudly works with the Shortcuts team and together, focuses on the development of Smarter Business Technologies that impact the professional beauty industry.


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