Have you ever noticed how many hairdressers or barbershops there are on your local high street this is why customer loyalty is so important.
According to the NHBF, there are over 43,000 hair and beauty businesses in the UK. Together they generate £7.5bn in turnover (now that’s a lot of haircuts!) and employ about 250,000 people.
A recent YouGov poll highlighted the nations haircut habits. Men visit more frequently (5.75 times per year) but pay on average £12.17 per cut. Whereas women pay on average £31.99 per visit but only visit 4.2 times per year.
These stats tell us something. Clearly, hairdressing is a competitive industry. But given the prices involved, it’s also a low-margin business. To add to this, hairdressers are reliant on a comparatively large client base that delivers repeat business.
But to secure repeat business, you need to generate something called customer loyalty. And customer loyalty is a core marketing principle for pretty much every business on the planet.
What is customer loyalty?
Let’s start with the basics.
Customer loyalty is when a customer purchases products or services from the same company over a long period of time. This is because customer loyalty is built on great customer experiences, which in turn builds trust.
Sounds great! But for customer loyalty to thrive you need to be able to deliver at least one of these two outcomes:
- Consistently high standards that exceed your customer’s expectations (also known as customer experience).
- Develop a customer loyalty program that rewards your customer’s loyalty (also known as customer retention).
Big high street brands such as supermarkets or phone networks often lack the ‘personal touch’ or customer intimacy to consistently exceed customer expectations. But they do have the clout and resources to deliver fantastic reward schemes. Two of the best known are Tesco’s Clubcard and O2’s Priority Moments.
Smaller, local businesses, on the other hand, can rely on their closer, personal customer relationships to develop strong customer loyalty at a fraction of the cost.
What are the benefits?
Winning new customers is expensive. It can typically cost you up to five times more money to acquire a new customer than it does to maintain a current customer. Research also suggests that existing customers are 50% more likely to try a new product and will often spend 31% more than a new customer.
Not only do your loyal customers spend more money, but they’re also your biggest advocates. The best (and cheapest) way to market yourself is for your best customers to tell their friends how great you are. Personal recommendations are the most effective form of advertising. And again, trust is at the heart of this.
The more you get to know your customers, the better you understand them and their needs. The better you understand their needs, the more tailored a service you can offer them. This in turn increases customer loyalty and retention.
In other words, customer loyalty is a win-win. And who doesn’t like that?
What can Barbershops learn from businesses that do customer loyalty well?
There are loads of great examples of businesses large and small developing customer loyalty. But what can hairdressers learn from them? How can you apply the same tactics to your business?
When I think of great customer service, I often think of my favourite restaurant. Beautiful surroundings, friendly staff who know my name and great food. If I’m lucky, I might even get a free glass of wine!
How might we apply some of that to help improve our customer’s experience?
But what about learning from loyalty schemes? Sure, we can offer discounts and ‘in-salon’ promotions. But how else can we create more customer loyalty? We don’t all have the budgets of the Tesco’s and O2’s of this world, but we can partner with other local businesses to create our own ‘local loyalty’ schemes and reward our best customers in other ways.
For example, why not get your haircut in the morning and enjoy a discounted meal at your favourite local restaurant in the evening? In return, the local restaurant can promote your salon and inform potential customers of any introductory offers to your business.
Keeping your best customers engaged and coming back for more is key to the success of any business. If you get that right, not only will they spend more money with you, but they will act as your very own sales team. Preaching the good word of your business and promoting your services to their network of friends and family.