The most interesting situation happened recently. While I was doing a client’s hair she received a text message from her waxing professional telling her that she had moved and to come visit her at her new business location. My client said, “Oh shoot, I really like her, but I have a membership till the end of the year with XXX spa.” What she also explained to me was that the waxer had a pretty full black book of names and phone numbers that she was asking people to write their information in if they wanted her to contact them, because she was planning on moving to a new location, her own business. Which was actually just a room inside another salon studio.
What’s interesting was that since this client had a membership, she was going to finish out the year at XXX spa. This gives the spa an opportunity to familiarize her to a new waxing professional. Hopefully, she will decide to stay with the original spa who trained the waxer, who was now contacting and soliciting the salon’s clients and income source, to follow her to her new business venture. Great way to say thank you for all the training and education! Of course, she will probably tell a number of stories about how the company ripped her off and mistreated her so she had to leave. As they most often do.
When I left the first salon I worked at, I told no one, no stylist, no client, I did open a small space on my own 25 minutes from the salon, closer to my home, and didn’t solicit one client, ever! We are still great business associates and connect with each other and refer each other often.
Anyway, I think this real scenario peaks my interest even more in the membership business model and here are a few pros and cons of creating a membership program. The following information was copied from the Salon Ops website and was written by Derek Hull)..
“Let’s start with the 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 fail 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 full price, 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.”
Contact Derek at derek@salonops.com for more information on creating a salon membership and remember to ALWAYS protect yourself, your business, your guests and have an attorney review your membership agreement.