Case Study: Salon Keeps Customers Coming Back With Wacky Rewards

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As a co-owner at Red 7 Salon, Jason Hall likes to think of his business as the “Cheers of the salon world.” Rather than encouraging loyalty at his two outposts in Chicago and Evanston, Ill., with cash-back incentives, Hall has partnered with Belly to give away “fun” rewards — like the chance to shave one of the salon owners’ heads — that don’t cost his business a dime.

He also uses MailChimp to manage the company’s email database, and sends out automated reminders to customers who’ve gone six to eight weeks without returning for follow-up appointments.

Why was the idea of creating a loyalty program appealing for your business?
I think it’s always important to have a focus on loyalty, because that’s what sustains you. You can certainly focus on new business, but to focus on building loyalty with your current following is crucial [for] long-term success. For us, it was a no-brainer. Before we spoke to Belly, or knew what Belly was, we certainly had in-house things that we did that focused on building that longevity and building [those] relationships. We always talk about how we are the Cheers of the salon world. We’re all about building relationships and when you walk in the door we will know your name, or at least [we’ll] pretend to know your name. Before [Belly], the challenge we were facing with loyalty was just keeping track of it. It was a big job to make sure that the software system we had was capable of doing that, and to develop a tracking program within that system that would be appropriate was hard to do.

What kind of in-house initiatives were you trying?
A lot of the things we were doing were building loyalty, but it wasn’t as obvious as Belly. Things like showing clients who were regulars that we appreciated them, and that we wanted them to come back and refer their [friends] to us.

When the economy really hit, we focused a lot on building in added value to people’s visits to the salon. They would still pay whatever the cost of a haircut was, but they would get an added value to that service. We incorporated a lot of things. We started serving wine and beer, we started giving complimentary hand massages with every hair service, and people really enjoyed that. Those are initiatives that we’ve kept going through the course of time and now they’re basically a part of our brand. Other things, as far as added value, would be that we talked to our front desk staff about acting almost like a concierge. If someone expressed interest in going to lunch or if they weren’t sure what to do that weekend, if the person at the front desk had a spare moment they would amp up the customer service by printing something out or writing down a restaurant recommendation — something that once again added value.

A lot of salons rely heavily on email marketing. Is that something that you do?
Yes, we do. In the past we just relied on our basic email account, but over the course of time, as our business grew larger, that became very difficult. We started using MailChimp, and that has been pretty successful. We have three or four basic forms that our web developer put together that we send out on a regular basis. If we haven’t seen someone in six to eight weeks, we’ll send out a “We miss you,” email that says, “Hey, we haven’t heard from you in a while. Your service provider has availability. We’d love to see you again.” Another one we developed was a “Happy birthday” [email]. When it’s their birthday, we send out an email and they can get 20%-off any retail purchase they make in that month. That’s nice for people who want to stock up. I think there’s another email that our web developer put together that focused on reminding people about our referral program.

If you put yourself in the position of the customer, what do they really want? What are they really looking for? What would they really appreciate from the business?

ur referral program is something we developed in-house. It’s pretty simple. Basically, you refer three people and your next visit is half-off. That’s a win/win. Some people have really enjoyed that and taken it to the extreme, which is awesome. Other people forget about it the moment you mention it. But that is something that for us has been really great to incorporate.

How do you let people know you participate in the Belly program at your salon?
When we first launched the application here, we had little stickers about it on all of our station mirrors, in our restrooms, and in our changing areas. We had all of our staff register and become active within the system. We even did social media marketing; we put it on Facebook, Twitter, and even our old MySpace account. We really promoted it heavily when it first came out. Now we don’t promote it as much. It’s definitely something that every once in a while I will send out a reminder through social media or through different conversations that we have with our team — whether it be a staff meeting and saying, “Hey, we really need to build this customer base.”

Collecting emails is something that we started doing a lot more actively within the past three years. With Belly, we started that relationship maybe six, seven, eight months ago. When we started our relationship with Belly, I just wanted to see, is this going to work? Are people going to want to participate? So far we’ve had a pretty good success rate. But, one of the reasons why I didn’t want to take our existing email client list from our software and dump it into the Belly system is because I just wanted to see how Belly would work and if people were interested in it.

Belly is known for offering unique customer rewards. What response have you gotten from clients in terms of the different rewards that you’re offering?
I think that was probably the most difficult thing to create, because you want to have some incentive, but you don’t want to give things away. The reps at Belly really helped us develop those. One of the things that is really great about Belly, and certainly works with the fun quality of our brand, is the way in which those rewards are communicated. It’s something we have fun with, which is nice. The biggest reward is something kind of ridiculous. They said, “Come up with something that is crazy, and if someone was incredibly loyal to the company they would eventually get.” So, the biggest reward we have is if you get to a specific level, you get to shave the owners’ heads. It’s kind of hair related, but crazy and stupid and silly.

Given that you’ve used a lot of different digital marketing tactics and platforms over the years, what’s your biggest advice to salon owners just dipping their toes in the water?
The thing I always refer back to is to put yourself in the other person’s shoes. I think sometimes businesses forget that. If you put yourself in the position of the customer, what do they really want? What are they really looking for? What would they really appreciate from the business? Maybe even offer them something or reward them with something that they haven’t thought of themselves, but you know that based upon who they are and what they represent, that they would appreciate.

Stephanie Miles is an associate editor at Street Fight. This interview has been edited for length and clarity.

Click here to read more Street Fight local merchant case studies.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.