Salons & Spas: Tread Very Carefully with “Special Offers” and Promotions

Discounting Salon & Spa ServicesWhen things are slow, and the appointment book is looking a little thin, many salon & spa owners turn to special offers and promotions, to try and fill the schedule. Although it’s a common practice, believe me when I tell you, it can be doing more harm than good.

You see, there are a couple things to consider, before discounting your services, your for the sake of a busier schedule. Both of which are crucial to the long term success of your salon & spa.

The Numbers

Imagine for a moment that your salon & spa has been busy all month. You’re maintaining a healthy looking schedule, the bills are being paid, and the salon & spa is making money… Let’s say for argument’s sake, your average client ticket is $85.

However, you notice that next week (the final week of the month), the schedule is looking pretty bleak. So, you decide to run a simple 25% OFF promotion. Seemingly harmless, no?

Let’s take a look at what this does to the numbers. First of all, let’s assume you fill up the schedule with this new promotion, and the week progresses the same as the previous three weeks did. Except one critical and painful reality. Instead of your average client ticket being $85, it’s now only $63.75… because you discounted your services by 25%.

It may seem like no big deal, until of course you understand what that actually means for your bottom line. We won’t get into the nitty-gritty about profit margins, etc., however with “Average Client Ticket” being a very important metric for your business, it’s easy to see how this one week of discounts, has diluted your average client ticket for the month.

After a week of “devaluing” your services by 25% in order to fill your book, you actually devalued your entire month by 10%. So, in the bigger picture, you’ve performed every service this month, for 10% less money.

Don’t get me wrong, sometimes promotions are important… However, they should be carefully calculated, and implemented. Otherwise, you’ll find yourself performing discounted services for the sake of a full schedule, when in reality, you would have been better off performing less services, at full price.

The Reputation

If promotions are always at the forefront of your business, you will absolutely, without question, 10/10 times draw in the tire-kickers, and the one-off clients.

These are the clients who only visit when a specific promotion suits their needs. Unwilling to pay full price for the service, means no loyalty;  and client retention and loyalty is one of the biggest factors in the success of ANY salon & spa.

Don’t get me wrong, systematically choosing the right services or products to discount, can prove extremely valuable when trying to build loyalty and retention. However, if you’re developing promotions “from the hip” or on a whim, you’ll quickly be recognized as a “special offer” salon & spa that lacks consistency in revenues, client loyalty, and a favorable profit margin.

A great tip for any salon & spa owner who is looking to increase client loyalty, is to reward loyal clients, rather than rewarding the first-timers.

 

So, when it comes to monthly promotions, or “schedule fillers”, approach with caution. Make sure you take the time to properly plan your promotions, and choose the right services to discount… Otherwise, you’ll find yourself in a game that you’d rather not be playing, I can assure you that!