Client retention: a metric that has a huge impact on our business in the spa industry. If your client retention is low, the solution that springs to mind is to ratchet up your spa’s marketing, right? I’m not arguing-- on the surface, it seems reasonable. If you need more clients then the next step looks like it should be ramping up your marketing efforts to attract new consumers to your business. However, is that really the answer to low bookings and inconsistent spa revenue?

The answer? Probably not. In today’s Spa Business Break I’m going to deconstruct the thought process behind, “If I could just increase my social media posting frequency, squeeze out an e-newsletter every month, or teach myself how to invest in Facebook ads, my clientele would grow exponentially and my client retention problem would fix itself!”

Client Retention as Your Most Valuable Metric

Firstly, a crash course on client retention as a metric: measured in 90-day increments, tracking your client retention is essential for the longevity of your spa business. Why? Because this metric is what you should be basing your business decisions on. To not keep track of your client retention means that you are moving blindly through your spa entrepreneurship and doing yourself a disservice by making it so you are unable to pivot quickly and recover lost sales.

New to measuring metrics? The majority of spa business and salon softwares have client retention tracking built into their reports, which means that if you use MindBody, Phorest, Booker, or Meevo (or many other CRMs!) you’re in luck because those reports can be generated for you. On the flipside, if you’re using a software like Square you will be limited with the spa-specific reports you need for your business to thrive. Whether you’re not sure where to start or are looking to upgrade to a spa-friendlier software, always feel free to drop me a line and hear my software recommendations for your spa business. 

Now That We Know WHY Client Retention is Critical for Growth, What Does Soft Booking Mean For Spas?

Frequently, the issue of soft booking and low pre-booking rates is that they’re a signal that your client retention rates are in crisis.

 As mentioned in the section above, client retention is measured in 90-day increments, meaning that, if a client comes in during the month of October, they should be returning between November and January. And if they’re not? Well, there could be many reasons why you’re spa is a “leaky bucket” and is losing customers: not having your website and/or social media tailored to your idea client demographic (meaning that you’re attracting clients who don’t see value in your business), your guest experience processes having cracks in them, or your follow-up emails not reaching clients at the right time.

What does that mean? It means that your priority needs to become fixing that leaky bucket rather than putting time, effort, and money into attracting new clients that could experience the same problems!

How to Use the Numbers Game to Patch That “Leaky Bucket” Client Retention Problem

I know, I know: we all hate metrics. Before I transitioned into spa business coaching-- when I was a spa business owner myself-- I was in your shoes! But hear me out: playing the numbers game right can mean big things for your business.

Once you analyze your client retention rate it’s time to compare them to industry norms. By my research, the average retention (as of February 2020) was catalogued to be the following:

• For 1st-time clients: 45-60% 

• For existing clients: 75-90%

• Industry average in previous years: approximately 30%

Did your jaw drop? I can’t blame you! This research dictates that, even after all of your marketing efforts, 70% of new clients aren’t coming back to your spa after their first time. Meaning? Something is not right and needs to be addressed immediately before launching any further marketing initiatives, otherwise you will be losing the leads you have worked so hard to capture. 

“But Kirsten,” you may be saying, “what do I do when I can’t even see the gaps in my processes? How do I know what to fix if I don’t even know what’s wrong?” I empathize with you! It’s frustrating when you don’t know what you don’t know.

This week, I challenge you to review your client retention metrics to find your spa business’s baseline and compare it to the industry benchmarks above. If you find that your baseline is lower to the industry benchmarks, I recommend implementing these simple systems to begin to fix your “leaky bucket” and get you back to where you should be for client retention:

• Ensure that your spa’s website and socials clearly state your business’s values in order to be attracting your ideal demographic

• Outline your spa’s promises (including, but not limited to, the client experience and end results)

• Draft a welcome letter/package to further manage client expectations (which can include a thank-you from the owner and what the client can do if they are unhappy with the spa’s service)

• Create a bounce back thank-you email with a coupon that is valid for 90 days

And voila! You have your basic client retention system up and running. It may take a few months to see results, but stay with it for the long-run: if you stay on top of the numbers game you’ll strengthen your client retention and be able to hit the jets on your marketing initiatives.

Not Sure Where to Start?

Contact me today or join my free Facebook group for spa business owners for further resources and access to future Spa Business Breaks!