At my own salon business we have two very definite ‘systems’ for :
a) Making it rain referrals – asking our clients to refer new clients to us and thanking them with a voucher
b) Thanking new clients for visiting us and asking them for referrals
I would say that YOUR DATABASE IS THE MOST VALUABLE ASSET IN YOUR BUSINESS. It is far cheaper to contact and ask for repeat and referral business from someone who already has used and liked your business.
An early lesson in business - you always have to give away a little to reap the rewards back. Our referral scheme is very simple. We offer a £40 treatment voucher to our existing clients for every brand new client they refer to us. Is this a bribe? No, we don’t think so, rather a thank you for taking the trouble to recommend us.
In practice clients will ONLY refer a friend if they are happy with our service, and they do it happily. They would not refer someone they like to a business they don’t rate, so it’s a win-win for everyone. Some clients have really got into the scheme and have enjoyed multiples of £40 of free treatments. That is great by us. We then have a new client on our system to market to, tell all about our services and who will also be asked to refer us to their friends and family.
Do you know the lifetime value of your clients? By that I mean how much an average client spends in your business over the coming months and years? Let’s be conservative and use one from my business - a £40 facial every month….that gives a value of £600 a year. If they only keep coming for 3 years that’s a lifetime value of £1800. So let’s go back to our £40 ‘giveaway’ Does it now seem like a great investment? The £40 vouchers tend to encourage our current clients to try something new and of course they end up buying new services, plus they feel rewarded so they are delighted with us and the snow-ball of ‘love’ for the business grows.
What incentive do we give ‘new clients’? We offer 50% discount off their first ever treatment with us….the same principles apply…..give away a little to get the rewards back!
Within two days of trying the salon any new client receives a letter from us thanking them for their business, plus ALWAYS x 3 refer-a-friend vouchers. Guess what, we get lots of new clients through the door and our database and profits grow.
REMEMBER the best time for ask for a referral is straight after someone has bought from you. Our simple system, which is automatically done by the reception team, brings us in between 150 and 200 new clients every month. If we just left it to ‘word of mouth’ those figures would be tiny.
Take a look at how your business thanks new clients and asks for referrals. It is a GOLDMINE IN YOUR BUSINESS right now. Don’t leave it to chance.
Julia Canham runs her succesful Business The Retreat Clinic in Cannock and she has changed the whole ethos of how she runs her business since becoming the local business advisor for Nigel Botterill's Entrepreneurs Circle.
