The world of hair styling is a competitive one indeed. High operation and labor costs, long hours, and stressful days are the name of the game. Most hair salons run on the razor’s edge, making a profit of only 10% or so beyond expenditures.
Because of this, it’s absolutely crucial that hair salons attempt to appeal the largest possible consumer base, and constantly attempt to grow their clientele.
There is some good news, though. Once you’ve managed to gain a client, you’ll probably keep them for quite a while. Most high-quality hair salons boast a nearly 72% client retention rate, which is quite a bit higher than loyalty rates at most other businesses.
Still, many hair salons do have trouble obtaining and keeping existing customers. Retention rates fall to about 33% when it comes to brand-new clients.
So, the path forward is clear. Salons must do everything they can to provide their existing customers with a great experience, and to try to gain the business of new customers. And if you run a hair salon, there’s one fantastic way to do so – gift cards!
Most independent hair salons don’t offer any kind of gift card program. While some smaller salons do run special promotions and sell gift certificates, these options often don’t have the same impact as well-designed, bespoke gift cards.
Used properly, gift cards are incredibly valuable to any salon – whether large or small. In this article, we’ll take a look at 8 of the best reasons that hair salon should start using gift cards. Read on, and see how your business can benefit from a high-quality gift card program!
1. Provides Incentives For Loyal Customers
Though gift cards are still somewhat uncommon in the world of salons, loyalty programs are growing in popularity. Combining a loyalty program with a gift card program is a surefire way to help keep your regular clients, and increase their satisfaction with your service.
If you offer a comprehensive loyalty program, gift card-based rewards are a fantastic idea. For example, you could offer a free $50 gift card to any customer who spends $250 or more on your services during a specific time period.
This is much more effective than a simple “points-based” reward system because the customer can determine what they want to do with their gift card. Usually, they will spend the card on your services – but they may choose to use a service that they haven’t tried before, such as hair coloring. This allows you to expand the services you offer to each client.
Your clients will also have the chance to give away that gift card to a friend or family member looking to try a new salon or stylist – increasing the reach of your business. Speaking of which…
2. Gift Cards Expand The Reach Of Your Business
Gift cards allow you to easily and quickly expand the reach of your business. Acquiring new business has always been difficult for salons. Repeat customers generally represent nearly 80% of your total business. Now, this is undoubtedly a good thing – a steady income stream from loyal customers is always desirable – but it’s often difficult to acquire new customers when you lose existing clients.
This is one of the reasons that gift cards are so powerful. Your customers can purchase gift cards and give them to friends and family members, allowing them a risk-free trial of your services. Because there’s no cost to them, they’re far more likely to come to your business, and see what makes your salon so special.
You can also offer additional incentives to first-time customers who use gift cards, such as a free bottle of hair product, deep shampoo and conditioning, or another value-added service that will encourage them to come back after they try your services for the first time.
Best of all, you make money as soon as you sell the gift card. Naturally, you would expect the user of a gift card to come in to use it – but even if they don’t, you keep the profits gained from the sale of a gift card. Because you gain instant profits, gift cards can allow you to maintain a more steady income stream – which is always a great thing in the volatile salon business.
3. Allows You To Engage With The Community
The value of community engagement shouldn’t be overlooked for hair salons. Word-of-mouth marketing is a very powerful tool, and gift cards provide you with an easy way to get involved with local nonprofits, community organizations, and more.
You could partner with a local nonprofit that’s raising money through a silent auction, for example. You can give away a set number of gift cards (and write the donation off on your taxes) and your gift cards will be auctioned at the event.
Not only will this help the public image of your salon, it’s a good long-term investment. Your services will essentially be marketed at the event, and the eventual recipient of your gift card is sure to come in to redeem it – this is the ideal opportunity to convert them into a long-term customer.
Best of all, this is a way you can give back to your community, and help share your services and your success in a positive way.
4. Gift Cards Can Be Tailored For Special Occasions
There are tons of great ways you can market gift cards for special occasions. Seasonal holidays are particularly great opportunities to market your gift cards.
Traditionally, winter holidays are when the most gift cards are sold – and this is no different for a salon. By purchasing branded, customized gift cards for the holidays, you can provide your customers with a truly spectacular gift – the gift of pampering!
The winter holidays are also a particularly great time to sell gift cards because of the negative effects that winter has on hair. There are probably quite a few people out there in the winter who are dissatisfied with the treatment their hair is getting at their current salon, and who are looking for a change.
Other seasonal holidays can also offer fantastic marketing opportunities for hair salons. Valentine’s Day is another great time to market your gift cards – husbands, boyfriends, and partners can purchase gift cards for their significant others, and help them feel their best on their special Valentine’s Day date.
Beyond Valentine’s Day and winter holidays, the opportunities are limitless – Mother’s Day, anniversaries, birthdays, college graduations – no matter the occasion, you can create a gift card that’s the perfect marketing tool.
5. Gift Card Sweepstakes And Giveaways Can Help You Reach New Customers
This is an especially valuable tool if you’re just starting your salon in a new area, or are looking to boost your client base. You can run a direct-mail campaign throughout your new area and offer a gift card sweepstakes or giveaway that will help you reach new customers.
You could offer a free gift card with the purchase of a certain dollar value of services, or announce that anyone who comes in during the next week will be eligible for a gift card giveaway.
Let’s face it – most people are unlikely to change stylists. But if you offer a valuable incentive like a gift card, their curiosity (and desire for free stuff) may just overcome their fear of change, making gift card giveaways and sweepstakes a very powerful marketing tool.
6. Discount Gift Card Sales Can Help You Reclaim Lost Clients
If you have a list of lapsed clients or any regulars who have stopped using your services, discounted gift card sales can be a great way to reach out to them, and reclaim lost business.
If you have an email marketing system or other contact information available to you, you can send these lost clients custom-tailored offers for discounted gift cards or services, and make them an offer they can’t refuse – they’re sure to take advantage of a fantastic deal on your services.
Most lost clients don’t really make a conscious decision to stop using a specific salon. The process happens gradually – they visit less often, spend less, and eventually just stop using your services altogether.
Whether they’ve found a new salon or not, a great, incentivized offer from your business is sure to catch their eye, and they’ll give your business another shot – if you make it worth their while.
7. Gift Cards Are More Appealing Than Paper Vouchers
Paper vouchers are certainly cost-effective – but they don’t have much of a “wow!” factor. First, paper vouchers can’t be displayed publicly because they could easily be stolen and used. This means that they usually must be kept in a back office or cash register.
This means it’s often difficult to know if a salon even offers any kind of gift certificate program – there’s no easy way to display paper vouchers.
Gift cards, on the other hand, are the ultimate marketing tool. You can display a full rack of gift cards by your cash register, without worrying about theft – your gift cards are totally valueless until you activate them using your POS system.
Being able to publicly display gift cards also increases the likelihood that you’ll make a sale. Gift cards are often stocked right by cash registers in retail environments because many gift card purchases are impulse buys.
A customer who is paying for their services may notice your rack of gift cards, and pick up a card for a loved one, a friend, or a special occasion. This is far less likely to happen if you only utilize a paper voucher-based gift certificate system.
Gift cards are also more readily recognizable and attractive, compared to paper vouchers, and they’re a valuable marketing tool – every time someone buys a branded gift card, they’re walking out with a tiny advertisement for your services.
8. It’s Easier (And Cheaper) Than Ever To Create Custom Gift Cards
Cost has always been the primary barrier to most small-business gift card programs. However, gift card providers like The Blackhawk Network have a variety of programs that are custom-tailored to small business needs, and they can provide you with all of the resources and information needed to implement a gift card program.
Other startups like Clover specialize in small businesses, providing low-cost, custom-made gift cards, and charging minimal processing fees. While processing fees for gift cards vary depending on the provider, the type of business, and the number of gift cards ordered, fees usually range from 3-10% – quite affordable for most salons.
It’s also much easier to create custom, branded gift cards. Whether you work with a designer or on your own, every major gift card merchant provides easy-to-use customization tools where you can upload custom designs and branding, and choose from a wide variety of color schemes.
Most modern gift card systems can integrate easily into any modern POS system, though certain providers may require specialized equipment – it’s best to consult with a gift card provider and your current payment processor to determine whether or not your POS or payment systems should be updated.
Even a decade or two ago, gift cards were still mostly unavailable to small businesses. But now, your business can easily compete with national chains like SportClips, Great Clips, and other gigantic salon franchises – using the power of gift cards!
Got Gift Cards You Don’t Need? Sell Them At EJ Gift Cards Now!
Gift cards are fantastic for driving business to merchants – but sometimes, you end up with a gift card you can’t use. Whether you got a card to a store you don’t like, a restaurant you don’t patronize, or a business with no locations in your area, this is a very common occurrence.
Well, don’t let the value of that gift card go to waste! EJ Gift Cards is the #1 direct gift card buyer out there, and we offer fantastic rates on all of your unwanted gift cards. We accept hundreds of different cards, and we pay out for each card we accept, through PayPal.
So don’t let your unwanted gift cards collect dust. Sell them to EJ Gift Cards now!