You need more turnover, so you need more clients … Right?
Chasing new business could be a trap … a trap I call THE NEW CLIENT TRAP!
It’s a trap that can condemn you to years of hard work and frustration for very little reward and yet, salon owner after salon owner falls into in and often they don’t even realise they have a choice, but they do … we all do!
There are 4 different ways you can increase your turnover and only one of them actually needs you to find any new clients!
It’s true; have a look for yourself and you’ll see that the 4 ways to increase your turnover are …
- Attract New Clients To Your Salon
- Persuade Your Existing Clients To Spend More Per Visit
- Increase The Average Number Of Visits Per Year Your Existing Clients Make.
- Increase The Length Of Time Your Existing Clients Stay Loyal To You
What’s also true is that of the 4 ways I’ve just listed … attracting new clients is the most expensive, the hardest to do and it’s the least effective way of growing your turnover as well … THAT’S WHY IT’S A TRAP!
Let me prove it to you.
To do this I’m going to create a make believe ‘average’ salon.
Let’s pretend it has 2000 ‘average’ clients and these ‘average’ clients come in 5 times a year (which actually is the national average).
Let’s also pretend our ‘average’ client stays loyal for 3 years and spends £25 per visit.
This means our pretend salon has an ‘average’ client lifetime value of £375
£25 per visit x 5 visits a year x 3 years = £375
It also means the total value of all 2000 average clients is £750,000
2000 clients x £375 = £750,000
So now we know our pretend salon has a client lifetime value of £750,000 let’s look and see what happens if we try and grow this number without falling into The New Client Trap.
Let’s start by working on increasing our clients spend instead.
What happens to our turnover if each ‘average’ client spends £30 instead?
2000 clients x £30 per visit x 5 visits a year x 3 years = £900,000
That’s already £150,000 more … and when you work it out you’ll find it’s the same increase you’d get if you found 400 new clients instead!
That’s amazing isn’t it and it’s true. In this example adding just £5 to the average bill would bring the same turnover increase as finding 400 new clients … and the good news is there’s more to come.
What happens if client visits increase to 6 times a year …
2000 clients x £30 per visit x 6 visits a year x3 years = £1080,000
That’s now an increase of £330,000 … and is the same increase you’d get if you found 880 new clients!
Now for the real mindblower … What happens to the total lifetime value of our ‘average’ clients if they now stay loyal for 5 years …
2000 clients x £30 per visit x 6 visits a year x 5 years = £1,800000
That’s £1.05 million more … and the same as finding 2800 new clients … I told you it was mind blowing!
The best news of all is you get ALL FOUR growth strategies for the price of TWO with this business building approach.
Because, if you do what’s needed to get clients spending more and coming in more frequently they will automatically stay loyal for longer and recommend you to other people.
Why does this happen?
Because you’ll be building better long term relationships with them … you’ll be paying them more attention and looking after them better.
Now the really good news is this. There are several tools and reports you can use on your Phorest Memento 7 system that make increasing your clients average spend and frequency of visit easy to do and by using them consistently you’ll also increase existing client loyalty and your ability to attract new clients.
Over the next few weeks I’ll show you what they are and how to use them.