In my last post I shared with you a story about a team member who demanded a pay rise just because a colleague was getting one … even though her performance was nowhere near as productive.
I explained how having a computer system gave me instant access to the information I needed to prove she wasn’t as productive and I promised to come back and share more thoughts on how some of the management reports in your Phorest system can be used to help you run your salon more effectively … so let’s get started!
The first report I want to draw your intention to is a simple list of your top clients, by spend, in the last year. When you look at it you’ll probably discover a very typical pattern emerging which begins with a group of clients at the top who are your ‘Big Spenders’.
Next you’ll be able to identify a larger group of what I call ‘Typical Spenders’ and finally you’ll see client spending dribble slowly downwards to what I call a ‘long tail’.
Be warned we’re going to focus on this group a lot and from now on I’m going to call them the …’Long Tail Dribblers!’
Now, which group do you want more of … ‘Big Spenders’ or ‘Long Tail Dribblers’ … the answer is obvious isn’t it, we all want more ‘Big Spenders.’
Why is it obvious?
Because your ‘Long Tail Dribblers’ will spend less, will be less loyal and less likely to refer you to their friends.
They are also more likely to be the people who consume your low profit margin special offers which means, when you think about it, they are contributing even less to your bottom line than you thought!
Bearing that in mind the important question is … should you treat all your clients the same, or should your ‘Big Spenders’ be recognized and rewarded in some way?
I don’t know what your answer will be … but I do know what it should be!
Of course you should make a fuss of and recognise your best customers. Give them flowers from time to time, hold an annual party for them, or take them out to dinner. Invite them to focus groups and listen to what they have to say. Give them a proper V.I.P. club to belong to. Give them bonus loyalty points on your Phorest system … Do whatever it takes.
Because you’re far less likely to lose them if you show you appreciate them, aren’t you and they are bringing you the majority of your profits!
There’s another benefit as well. If you make your fuss publicly, other clients will know what you’re doing and why and some of them will want to join in and the only way they can do that … is to spend more, which is exactly what you want.
To sum it up, following the ‘make a bigger fuss of your best clients’ policy achieves two things:
Your big spenders stay loyal for longer.
Your average spenders aspire to join the big spender group.
Either way your profits go up, which is what you want … isn’t it!