The evolution of client loyalty: Why traditional reward programmes no longer work

Customer retention is a challenge for any business, but in today’s tough climate, it’s never been more important for salons to have a smart, effective approach to client loyalty.

A recent report by the National Hair & Beauty Federation (NHBF) on the impact of the 2024 Autumn Budget projects that salons will face additional costs of £139 million before implementing any operational changes, while labour costs alone are set to increase by £100 million.

Wage increases, National Insurance changes and reduced business rates relief mean salons are in a difficult position financially, and building a steady stream of loyal customers is crucial in offsetting these increasing costs and boosting revenue.

With retention rates hovering around 25-30 per cent, it’s time to rethink outdated loyalty tactics. While offering returning clients exclusive discounts and promotions has its benefits, customers now expect more. Providing personalised recommendations and services, a seamless booking experience, and prioritising staff upskilling all go a long way in making a client feel valued.

At such a critical time for the industry there is no room for complacency.

Building a personalised customer experience

Incorporating a personal touch into a client’s experience is a highly effective way to gain their trust and loyalty.

Going beyond the tried and tested method of traditional loyalty programmes, developing a personalised customer experience helps beauty therapists and hair stylists to build a rapport with clients that extends beyond money.

Here, CRM tools can be a game changer in helping salons understand what their clients love – from tracking visit frequency to favourite treatments, these insights enable salons to offer thoughtful, tailored experiences.

Having this information to hand allows team members to anticipate the client’s needs and make educated recommendations for other treatments they may enjoy.

Furthermore, these personal touches appeal to those wanting to go beyond the transactional relationship they may typically have with a hair or beauty professional, which we often see in loyalty programmes. Feeling as though the salon has taken the time to consider their habits and make recommendations based on these will encourage both trust and loyalty.

Making booking simple

Many customers are time-poor and juggling different priorities, so they need efficient services and solutions. Tapping into this need can give salon owners the chance to build loyalty amongst their customer base.

Introducing booking software into the daily operations of a salon allows clients to book appointments at any time of day, not just during salon opening hours, giving them the flexibility that makes for a more seamless and enjoyable customer experience.

They also take the pressure off salon teams, freeing them up to focus on what they do best – delivering great service.

Focusing on developing a frictionless experience for customers is a fantastic way to boost loyalty that reaches further than simply offering rewards and technology goes a long way in helping to achieve this.

Upskilling and training

Clients who feel they are getting value for money will be more likely to be loyal to a salon, and a large part of this value comes down to the knowledge, expertise and experience of the team.

While all beauty professionals need to be qualified and have certain skills under their belt, continuous learning and development has huge benefits for salons and client retention.

Having the reassurance that the beauty professional they are being treated by is equipped with the latest skills and knowledge is a must for many consumers and demonstrates the salon’s commitment to delivering the best service it possibly can.

Training can be expensive and may be something that salon owners feel they cannot afford in the current financial climate, but where possible, upskilling is an investment worth making to help boost sales and futureproof your business.

Embrace social media

Customers want to see and learn about the people behind the business, and social media is the perfect tool to use to achieve this.

Bringing a personal touch to a salon’s social media profiles by showing behind the scenes content, beauty tips and tricks, or client transformations helps to build a rapport with customers.

Social media also gives teams the chance to engage with clients when they are away from the salon by answering questions or replying to comments, further strengthening the relationship and cementing customer value.

Building a community in this way builds customer bonds and provides the personal touch that many are looking for when deciding where to place their loyalty.

Loyalty isn’t built on points or perks alone. It’s about how you make clients feel and in a crowded market, that personal touch makes all the difference.

Final thoughts

Developing client loyalty goes beyond merely offering rewards and discounts for regular customers, and it has never been more important for salons to be creative when considering how they can entice return business.

Creating a positive customer experience is the key to encouraging loyalty, and salon owners should carefully consider how they are making their customers feel valued. Those who feel appreciated and taken care of are always more likely to return, and this often comes down to special details and personal touches.

Taking the time to develop an effective customer retention strategy will help salons stand out in a crowded market, and placing customer experience at the heart of this will sure to lead to success.

Sam Kendall is CEO at SalonIQ