If you are putting all your time and money towards your marketing plan and nothing towards client retention, you may have created a "leaky bucket" in your spa business that is preventing you from retaining new clients.
The leaky bucket theory is an analogy used to describe the process of customer gain, loss and retention.
Client Retention = Client Satisfaction.
Client Retention is the metric that proves your guests are happy with what you are doing in your spa business. The problem in the spa industry, though, is most owners are not tracking client retention. Even worse, many spas don't even realize that client retention is a thing! However, you may recognize there is a problem, but you can't quite put your finger on what the issue is.
The spa guest experience starts from the moment the client walks in the door until the moment they leave. That is why it is vital to always look at your spa business from the perspective of a client. This means not only physically looking at your space but also at how your team is interacting with guests; how are they communicating with them throughout the whole guest experience?
Sometimes we get so caught up in running the business that we forget to think about the clients' experience, and when that happens, client retention gets risky.
First Visit Retention
The average salon and spa first visit retention rate in North America is around 30%. I am dead serious - think about it…only 30% of new clients are coming back within 90 days!
When I had my spa business and I heard this statistic, it scared the crap out of me. But it was also a defining moment regarding what I should be looking for in my metrics and where to look for it because it gave me a resource to investigate exactly where the “leak” was coming from. The industry gold standard for first visit retention is between 45-60%, and I needed to know how I was going to get there.
Client Retention Reports
Remember, not all POS (booking & point of sale) systems are created the same. If you don't have software that is salon and spa specific you most likely won't be able to get Client Retention reports from your system. However, if you can't find "client retention" metrics in your POS reports, they could be called something else so you might need to do a little digging to find out where they are. If all else fails, call the support desk for your system and if they don't have a client retention report, request one. If enough people ask, you might get it!
Now that you know where to look to find your Client Retention metrics, you need to get started on a client Retention system to raise those numbers. I have just recently released a new spa business systems checklist freebie and included at the end is an offer for a Client Retention Toolkit so you don’t have to reinvent the wheel!
Client Retention Toolkit
Template for welcome letter WITH instruction on how to use it.
This is a personalized letter from the spa owner to the new client. All you need to do it drop in your logo & customize your spa name and it’s ready to activate! This letter sets company & client expectations right out of the gate sharing your values, the expected guest experience, your team culture, and that you are proactive and willing to take steps to make sure they are taken care of.
Bounce Back Coupon
I’ve made you an example bounce back coupon that you can easily recreate in Canva! Just pop in your logo and your offer (with a 90 day expiry) and include it in your welcome letter. I would recommend giving both the welcome letter & coupon to the guest personally after their appointment or as snail mail, for a nice touch as well. I don't recommend emailing these documents since people already overwhelmed with so much email it loses its personal touch.
Spa Metrics Scorecard
The final piece of goal in the Client Retention Toolkit is a fillable Spa Metrics Scorecard to track your retention and all other critical spa business metrics for the year; productivity, pre-booking, average ticket, number of new clients, number of products sold, and existing retention. You’ll want to duplicate this spreadsheet for each team member to track their individual metrics. This is so you can identify the team members who need coaching and/or training.
Hopefully, I have sparked some interest and energy around looking at your Client Retention system and metrics! If you need support to identify your growth potential and make an action plan to ensure it happens, reach out to me here and tell me your story!