Referrals, Retention and Revenue

So you're just hoping that clients rebook , you know . You're hoping that retail sells and you're hoping new clients show up as well . But let's be honest , you know hope is not a strategy . So let's get you out of survival mode and into systems work .

going to get a little mathy on you , um , so you might want to get some pen and paper for this . You can stop it Once you listen to the recording , go back and listen to it again , because you're really going to want to understand this number . It can help transform the way you do business . So this is just going to be a scenario of a salon example .

So let's say , for example , your salon spends $2,000 a month on advertising . So this can be Facebook ads , this can be Google ads , any kind of advertising or marketing . In this example , your salon spends $2,000 . Your overhead is $100,000 .

We're going to say that in this instance , you bring in a hundred new clients a month with an average ticket of a hundred dollars , so that's $10,000 in new client revenue . We did a hundred times a hundred . That's how we got 10,000 .

So also in this scenario , we're saying that new clients are responsible for about 12.5% of your revenue , so they also account for 12.5% of your overhead , or 12,500 . Because , remember , we said our overhead was $100,000 . So if you add in your ad spend and you're spending $14,500 to bring in a hundred clients , that actually equals to $145 per new client .

Let me say that again , that's $145 per new client . So if that guest doesn't ever return like you lose money . You lost money even if they paid you for the service or even if that client only spends a hundred dollars . You definitely lost money , especially if they never return .

So we added in also that ad spend and then that's how you figure out that percentage , to know how much they're responsible for in your revenue . And you might also be thinking , gosh , you know , um , hey , uh , I , this is really great mathy , math that you guys just shared with us .

Um , and it truly is like when you start to get this and you realize like , oh , my goodness , if they're not spending $145 , then we lost money , it makes you realize like , yes , we absolutely need new guests . But the most important part , you guys , is this next part , which is the mistakes that most salon

owners make , and that is mistake Number one is focusing only on those new clients , you know , because the returning clients are your gold mine , you know .

So let's talk about you know , what are some action steps that you can take if you're making mistake number one , which is only focusing on new guests , guests , um , you know , let's really dote on those returning clients . Let's delight them . Write them a thank you card , add a surprise treatment for them . You know , let's really dote on those returning clients .

Let's delight them . Write them a thank you card , add a surprise treatment for them . You know , really just show them that you care . Mistake number two that most salon owners make is missing the signs when someone is fading away .

You know , because usually somebody just doesn't go see you right away , and if they haven't rebooked or bought retail or responded to any messages or anything that you've sent them , that's a yellow flag , you know . So I pulled a report after I stepped away from behind the chair and what was shocking to see , jen and I had very similar situations happen .

You know where that seven guests I'd loved hadn't been in for 10 plus weeks , you know . So immediately got on the phone , called them , you know , sent them handwritten notes . What was really cool is that four came back . One of them moved , one had gone somewhere else , but she ended up rebooking with us again because we cared enough to notice .

And so that is a huge thing . When you start to pay attention to that , um , you can prevent that mistake from happening . And you know , mistake number three is thinking client loss is normal , because some is , but pretty much all or most quite a bit is preventable .

It could be a chocolate if it was mother's day , or , you know , a 20% off a retail item , it could be anything just to make that connection to them and let them know hey , we , we see you , we hear you , we want you to come back in , um , so that you know you want to build that customer service culture .

Like , if you think about Disney's , for example , like every cast member and Lindsay said this the other day , she's like I love that they call them cast members because they truly know what their position is .

So if you're thinking about Disney , like every cast member starts with , like Disney traditions , and so that's a class where they learn how that Disney's real products aren't roller coasters , they're actually about creating happiness for guests . It's about making people feel special . And so same thing at our salons .

Like your salon , your real product isn't the haircut or the lashes or the color .

It's actually creating confidence for clients , it's creating renewal , it's creating belonging , and you're not just selling services , you get to sell that transformation , and so when you're thinking about client loss , you've got to have that customer service training to prevent breaks in the system , so that your team truly knows how to use the systems and how to look

for opportunities to continue to elevate your experience .

just don't even realize that this is going on for us inside of the salon . You know , and um , I think when you start to build that culture , like you were just talking about um , and you start to ask you know , um , I think it starts to make a huge difference in what you see for sure .

Like they have to have that context . They have to know why we do what we do , not just what we do , but they have to understand the why behind it . And I think that's what Disney is really good at and that's why you know , in our industry , new guest retention for us is like 24 , 25% in our industry .

Maybe yours is higher , but for Disney their new client retention is 70% . So if you imagine transforming your salon to have 70% new guest retention , how that impacts everybody's take-home pay , the salons . It impacts the team's take-home pay .

You're able to do more for your front desk or hospitality team , whatever you may call them , and also you're serving your purpose of making people feel more confident . So they want to come back because their life is transformed as well . So they want to come back because their life is transformed as well . So I love that really thinking about like ?

What are the opportunities to continue to train your staff in the customer service experience ?

And so let's talk about some referral marketing that works , because most people don't refer

because no one asks , you know . So here's a great little question that you could ask Um , anybody who comes into your salon , just ask them . Hey , on a scale of one to 10 , how likely are you to refer us to a friend , you know ? And if they respond with one through four , call them right away and find out what went wrong . You know , because 9-1-1, .

Hey , is this , susie ? Did you give us a one through a four ? We're here to help , Okay , you know , see what went wrong . Because a lot of times it's like a minor thing that like , hey , if you could correct it , like that could just transform that client relationship . It could turn them into , you know , a five to seven or it could turn them into a 10 .

But even if you can't transfer the number , even if they're like I wouldn't , you know , spit on you if you were on fire , hopefully you don't get that response , but even if they just say that you know , just know that , hey , 10 years down the line , they're going to remember that you called them .

You cared enough to call them and so you know it might be water under the bridge at that point , but if you don't call , you'll never know . And if they respond with a five to seven this is what we like to call the neutral zone you know this is a good opportunity to engage them or surprise them or look for a way to build some sort of connection .

And if they respond with an eight through a 10 , those are your people , those are your hidden influencers . But guess what ? They need tools . So create easy , thoughtful ways for them to refer . You know , give them , you know , a give 20 , get 20 card .

Or you know , give them many gifts to give out or give them , offer them some sort of um , special , thank you , um , for referring . You do some sort of handwritten invites . Just make it feel good for them to share , make them want to get that word out and that message out for you .

and add-ons , and you're doing this for the purpose for making the , for creating a solution to the client's greatest problem . We're here not to give someone the ick .

We're here to give them impact , and we truly know that when hair is treated or when skin is treated with the right things , people feel more confident , and so being able to increase your average ticket , which would be your transaction size , like you're making people leave with more value . They're going to feel more confident .

Another opportunity is to invite guests to visit more often . You know that would be like celebrating their birthdays . Recently , lindsay and I actually are able to send our clients a birthday happy birthday message from our team to our clients on their birthday .

So on their birthday , they get a text from our salons , they open it and there's the team singing them a happy birthday . So and then with a special little birthday gift like that's how you get guests to visit more often or even like celebrating their half birthdays . You've probably seen the marketing around half birthdays .

Hey , it's , it's six months , it's halfway to your birthday . Come in and you know , enjoy X , y and Z . It's six months , it's halfway to your birthday . Come in and you know , enjoy X , y and Z . And so that's one way to add value and build wealth . Another one is the be the one stop beauty expert to reduce spending elsewhere .

Like we are in the business of creating a complete look for clients from head to toe . So no longer do we just do hair , skin , we we have to help them see the opportunities of what clothes to wear , how to do their makeup , like , what jewelry to wear . Like that's creating that you know that look for someone that makes them feel more confident .

And you know people , when they're in our spaces , they want to buy makeup , they want to buy the tools you use . So having them accessible for them , where they can just grab , grab it that day and have it that day , it's going to make their life easier . Another opportunity is increased retention with better rebooking and reminders .

So having scripts , that's really a beautiful thing , having those scripts with your team so that they know you know how to ask for a pre-book , how to um , you know , uh , what's the best way to set the client up for success and the stylist up for success ? And it's not . Hey , my schedule's really busy .

You should go ahead and book , or the holidays are coming up . You should go ahead and book . I'm so busy . Look at me , I'm so busy . That's not the script we're talking about . Like you want them to have a script that serves everyone to their highest good .

You know , one other thing to add value and build wealth is to win back lost clients with those personal touches we talked about that . Lindsay shared that story of how , when she no longer was doing hair and some of the clients that she was serving hadn't been in a while , so she personally reached out and was able to attract some of those back .

Like , how special would you feel , like if you went somewhere else just because you're like , yeah , it was good , but there's something missing ? And then the owner or that service provider reached out to you like , tell us how we can do better , tell us how we can be better . That's what Disney would do and that's why they have new client retention at 70% .

Another opportunity is ask for referrals often and reward them often , and so again , it's teaching your team to have those scripts , to know when to ask for a referral , to know what to say and to also reward the clients that are referring lovely clients to your salon . Interesting fact you know there's other amusement parks besides Disney , like in our hometown .

There's Carowinds , there's Six Flags . I don't even know all the different amusement parks . I think they might be owned by Paramount , but even if they're not , it's interesting .

I was just there the other day with my niece and I thought I wonder what their client retention is compared to Disney's , because I knew that Disney's was 70% and their new client retention is only 40% . So it's like they have more systems in place at Disney than any other amusement park and that's how they're able to ripple that out .

We were just there the other day and they were doing make a wish for kids at care lands where we were at , and it was just so interesting to watch is , you know , they get a special place in line , which is awesome . We loved it . My little six-year-old niece loved watching it too , and it was like some rides .

The people , the attendance , were almost aggravated that they were having to deal with this , but on some rides some of the attendance were high-fiving the kids Like you wouldn't have that at Disney . All attendance would be would have been high-fiving the kids at every single ride and that's what sets companies apart . That's what changes your retention from .

You know new client retention from 40% to 70% . So just think of ways that you can add value and build that wealth .

60 salons for every Starbucks in America . You know , and Jen just recently shared this stat with me and I shared it with some people earlier today and we were talking about it and I was like so how many salons or how many Starbucks can you think of in our town ? And they were like , well , one , two , three , there's three .

And I was like , yeah , there's , there's three like freestanding locations , but there's one in our grocery store and then two more in other grocery stores , and we forgot that there's one in target . And so we came up with six , you know , and I'm in a small town , so there's quite a few Starbucks . And so we did the math .

I was like , okay , so if there's six ? So first we only thought there was three , so that would mean there's 180 salons in this town . But now that we discovered , hey , there's actually six , because we forget about those little hidden , closet ones .

There's actually probably you know 300 and you know 60 plus salons in our town , and that's wild when you think about that , because what it means is standing out is the only way to grow , and the difference is systems , standards and consistency . You know , because wealth is not built on viral videos . It's built on repeat business and relationships .

It's built on repeat business and relationships . So we would invite you to audit your retention , refine your referral systems , train your team and remember predictable income doesn't come from hustle not at all . It comes from strategy and systems . So now go build the kind of salons that clients never want to leave .