Salon @ Spa Memberships
Where do I sign?
In this article I will explain;
- the good
- the bad
- and often misunderstood business model of memberships in salons and spas
First let’s look at what salon and spa membership is. Typically, there are three types of membership systems available. All three tend to be paid through a monthly charge to the client and the client receives a benefit for that monthly charge. There is usually a membership contract involved for a specified amount of time, IE; 12 months. The payments are usually automatically debited from the clients bank account or credit card and there are usually penalties for cancelation.
Now let’s look at the First type of membership system.
This membership type involves the client paying a set monthly amount and receiving a generous discount on services and products. This type of membership system is what I refer to as the client loyalty system and usually looks something like this. The client joins the membership for one year and pays a monthly price of $19.99 Example Only and receives 25 % off on all products and services.
Now let’s look at the Second type of membership system.
This membership type involves the client paying a set monthly amount and receiving a set amount of services included with the membership. This type of membership system is what I refer to as the client service discount system and usually looks something like this. Client joins the membership for one year and pays a monthly price of $99.99 (Example Only) and receives 2 blowouts, 1 single process color and one haircut per month, with no carryover of unused services. This system will have your customer coming more frequently and using all the services included so be prepared to handle the work load.
Now let’s look at the Third type of membership system.
This membership type involves the client paying a set monthly amount and receiving an unlimited amount of services included with the membership. This type of membership system is what I refer to as unlimited membership system and usually looks something like this. The client joins the membership for one year and pays a monthly price of $99.99 (Example Only) and receives unlimited blow-outs, single process color and cuts per month. This system will be seen as a beauty lifestyle membership and is the gold standard of memberships.
I used hair memberships as an example but the same is true for spa services and nail services. Now that I have explained the types of memberships,
- Let’s start with Bad, as it is always best to get bad news out of the way first.
Salon memberships are like a loaded weapon, if used in the right hand it can be the savior of your business and if used in the wrong way it will be the death of your business. I have seen many a salon that has tried to copy our systems used in our salons only to fail and go out of business. The reason this happens is by doing something like running a system of unlimited blowouts for $69.99 per month and having only that one membership available.
They are doomed because
- They are using the system with the highest frequency of visit.
- They are probably using a commission pay structure
- They have no clue as to how many members each operator can service.
- They don’t know what the costs of servicing the members are.
- They have no upsell plan.
- They have no advertising plan related to memberships.
So to summarize, the Bad comes when Salons and Spas jump into membership without a proven game plan
- Now let’s talk about the Good. A membership system fixes just about every problem we experience and complain about in the Industry.
- Greatly Reduces Employee Turnover. Membership systems force a team mentality. The client will have the opportunity to meet and take advantage of many different stylists. Therefore, if a particular stylist goes on vacation or leaves / the client will already be comfortable with other stylists in the salon. Even if the stylist is considering leaving, the clients will still in most cases remain with the salon because they are under contract with the Salon, and again are comfortable with other stylists.
- Cash Flow- With membership systems, the client’s credit card is automatically charged each month for her/his membership dues. Therefore, The Salon owner knows that a certain fixed amount of money is coming into the Salon prior to beginning business the next day, Guaranteed.
- Salon Payroll Cost. Typically, with membership systems there must be a corresponding pay system. Along with the revised pay system there are bonuses for the employee such as the clients being under the perception that they are not paying creating a substantial increase in employee tips. Thereby shifting the burden from the employer’s payroll to another great source of income for the employees. Let’s remember that tips are a major source of an employee’s compensation.
- Attracting new employees -Word of mouth has always been a key to building any business. Especially in the Personal Service Beauty Industry. This also greatly holds true for Stylists. When word gets out as too how well the stylist is doing monetarily, it will attract other stylists from other salons to your salon.
- Attracting new clients– Selling a membership is much easier than selling a service. Clients don’t buy what you do, they buy why you do it, and selling a beauty lifestyle membership is something you can get behind with your heart.
Now the Misunderstood. Well, I think most of the questions I get have been answered in the good and bad sections above. Should you have additional questions we can be reached at derek@SalonOps.com. We at SalonOps are the originators and experts on salon coaching and memberships with our average salon or spa client doubling their income within a year. Our systems are proven with real world experience as we have perfected these methods in our salons and are now teaching those systems to you thru our Partnership with Rosy Salon Software. Our motivation is that we have an absolute passion to fix the business side of beauty. Most salons and suite renters who need a coach can’t afford one and that is where we step in with our coaching programs that start out at 0 dollars up front and a small percentage of increased revenues for unlimited coaching. We get Paid when you get Paid Here is a partial list of services included- Membership setup, support, pricing and software programming. Payroll system, tracker and customization including commission conversion. Marketing system for in house and digital. Private label product development. SalonOps Toolbox which includes over 300 customizable forms from Business plans to employee manuals. SalonOps oracle dashboards- a software to run the numbers side of your business. A monthly video conference in our salon Owner Mastermind conference, with live Q@A between all those using our systems and private membership to our inner circle group.
Thanks for reading
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