Loyal, long term clients are the lifeblood of a successful lash business.
Industry research has shown that improving your client retention rate by as little as 5% can boost your income by as much as 95%.
How is that possible you ask?
There’s a few things at play here so let’s take a look at why your client retention rate is so important…
WHY IS CLIENT RETENTION IMPORTANT?
There are many financial costs involved in acquiring new clients…
Printed promotional materials
Running sales and promotions
And that’s before you even consider the time you need to invest in these activities. And even once your snazzy marketing catches the eye of a potential new customer there’s also…
Scheduling appointment times
Answering questions about your services
New clients also spend less on retail products and additional services than regular clients do, and are far more likely to be no-shows for their appointments.
Dealing with new clients costs more time, money and energy than dealing with your existing client base does, therefore the more time you spend dealing with existing clients, the more profitable your business will be.This is why measuring and tracking your retention rate is so important.
HOW TO MEASURE YOUR CLIENT RETENTION RATE
There are 2 things you need to measure…
New client retention rate (how many first time customers come back in a given period)
Existing client retention rate (how many return customers come back in a given period)
We recommend measuring these over a 90 day period as it’s long enough that if a client hasn't returned that they probably never will. It's also a short enough timeline that you can quickly track it each month.
Here’s how to work them out…
We recommend tracking this data at least every quarter, but ideally month to month in order to quickly identify any problems.
WHAT DOES YOUR CLIENT RETENTION RATE SAY ABOUT YOUR LASH BUSINESS?
The reason we track these 2 metrics separately is that it helps you better identify which parts of your business might be working well, and which might need improvement.
Your new client retention rate:
The average for the beauty industry is around 30% so if you’re above that you’re doing okay.
If you’re in the 30%-50% then you’re doing really well and probably indicates that you’re leaving a good first impression on your clients and providing a valuable service. There’s always a bit of room for improvement here though. If you’re anywhere above 50% then you’re well ahead of the competition.... Well done
A retention rate below 30% could indicate that something needs to change in your consultation process, or how you communicate with and welcome new clients.
If your existing client retention rate (calculated below) is also low then it could be an issue with your overall service.
Your existing client retention rate:
The beauty industry average here sits at 68% so if you’re above that you’re doing okay but ideally you want to be aiming for the high 70’s. Anywhere above 85% is considered excellent.
If you’re sitting below 68% then you may struggle to replace the customers you’re losing each month. A poor existing client retention rate could indicate that there’s room for improvement in your overall service, or perhaps your customer care strategy
If you run a salon with multiple employees it can be invaluable to track these rates for each employee. This helps to identify your key performers who you can be promoted or help train your other employees.
HOW TO IMPROVE YOUR CLIENT RETENTION RATES
We go into detail with some client retention strategies in this blog postbut here’s a quick summary of some of the strategies that will impact your client retention rates…
Customer Care: Enhance customer experience with small gestures like complimentary treats and personalized free gifts.
Detailed Records: Maintain detailed client records noting lash details, preferences, and even personal preferences to offer a personalized experience (Download our free client consultation forms here)
Lash Retention: Emphasize the crucial link between lash retention and client loyalty, focusing on effective prep, suitable adhesives, and great aftercare.
Email Marketing: Collect client email addresses for future marketing efforts.
Win Back Lapsed Clients: Re-engage inactive clients by sending special offers via email or SMS.
Re-Book before they leave: Offer clients the option to book their next appointment before leaving
Even small changes in your customer retention rate will snowball over time: Turning more of your appointments into quick, easy infills with clients you know & love, will mean less appointments with new customers who require extra time, attention and effort.
It will also mean less resources spent attracting new clients and will free you up to engage in more exciting revenue-generating activities within your business.
Frequently measuring your retention rates will provide key insights into your business and how your customers view it and will help you make any changes you need.
If your numbers start to decline it can be an alarm bell that something needs to change within your business and if your numbers are going the other way then it’s a positive affirmation that your business is healthy and your clients love you! And who doesn’t want that?
So get to work… open up your customer data, use the formulas above and work out where your customer retention rates rank, and then come up with a plan to either improve or protect them.