The beauty industry was one of the hardest hit by the pandemic: the revenue of companies involved in it for June-September 2020 (compared to the same period in 2019) fell by 30-70% worldwide. But even after the lifting of self-imposed isolation, not everyone has recovered, which is partly due to mistakes in doing business. In particular, with the use of databases.
How with the help of CRM to retain customers and increase sales, despite the times of crisis, and what five key problems CRM-system solves in this article.
Why does a beauty salon needs CRM-system
Because of the pandemic in 2020, about 40% of beauty businesses in the world closed, but the competition is still high. And business survival rates are low: most new beauty salons shut down within the first year.
The most resilient companies are those that take a data-driven approach to doing business. Financial modeling and analysis of customer behavior in order to increase loyalty is the key to success in any business, including the beauty industry.
A salon’s reputation and chances of continued existence determines its customer retention rate. Therefore, it is important to build a long-term relationship with an existing audience.
To build customer loyalty, it is convenient to use a CRM system that can quickly process large amounts of data. It should replace the usual paper “journal”. CRM keeps not only customer records but also bookkeeping and helps to automate specific business processes and create advertising campaigns.
According to statistics, with the introduction of online records and CRM beauty salon net income increases by 30-35%, staff productivity and motivation – by 25% and customer satisfaction – by 31%.
1. Clients don’t stay long
In the service business is afloat only if there are regular customers. It is more than 5 times cheaper to keep them than to attract new ones. Therefore, the real profit the salon appears only if more than 50% of this traffic regularly come and use the services.
CRM-system helps to keep records of clients and record their flow or inflow. It has a history of interaction between visitors and business: you can see in real time who and when visited the salon, who was the last time, for example, six months ago, although prior to that consistently went every month.
With a timely response to such situations and proper communication with such customers, you can return up to 40% of the departing traffic and improve service quality.
2. Customers rarely sign up
Uneven visits to the salon can be associated with poor performance of the administrator, who did not record the client before leaving, did not remind, did not pick up the phone or forgot to answer the message. The problem is solved by the CRM-system with online appointment function: the man himself will choose a convenient time on the automatically updated calendar, will receive confirmation and generated by the “machine” a reminder.
In addition, a rare appointment can be associated with a small customer base, which requires expansion. One of the most effective ways is targeted advertising in social networks, reminding existing clients about the existence of the salon and its services. For targeting to be effective, you also need a CRM-system: with its help, you will carry out personalized mailings, targeted advertising, and launch a loyalty program.
3. Service demand is uneven
See what services are in greatest demand, and which are the least, will help CRM-system, which shows visual infographics in two clicks.
You can then analyze why certain proposals do not enjoy the attention of customers, whether it is realistic to transform them, or better to remove them altogether. As a result, the costs of unnecessary purchases and possibly “idle” personnel are reduced.
4. Not all pros are the same
After setting up a CRM and receiving data on the inflow and outflow of customers, you can see that some segment of regulars or newcomers are not returning. The system helps determine why this is the case. For example, if you see that some specialist’s clients do not stay with him at all, “disappearing” after the first visit – it is worth finding out why this is happening.
Perhaps the person only creates unnecessary costs to the salon. Losses on a bad specialist can reach thousands of dollars, even in a small business.
5. Business revenue does not grow or decrease
A CRM system can’t create money out of thin air or teach an entrepreneur how to make more money, but it is useful for bookkeeping. Algorithms can create revenue charts and automatically calculate the average check from a particular customer or total for the day, which is necessary to further analyze the financial situation of the business.
In addition, it is significant and to understand how far back the costs, which audience is visiting the salon, which of the customers can be offered an additional service and increase the average check.
Attention to customers and a personalized approach will always bring you profit, and CRM will help you provide service more efficiently and research the business process based on fundamental data.
A CRM system is not suitable for you if:
- If you have 5-10 clients, you definitely don’t need a CRM. Look for customer acquisition channels: CRM should be chosen when you already have a flow.
- If your business has its own, very niche specifics, you may not fit any of the existing CRMs. Yes, and that happens. This is an extremely rare case, especially for small businesses – but medium and large businesses often have critical and very individual parameters and features.
Checklist for working with salon traffic via CRM:
- Enter as much data into the system as you can – this will help you do the most informative analysis later.
- Study client behavior by segment: hairdressing salon, nail service, cosmetology. Each service has its own return rate.
- Interact with the customer, get feedback (ideally automate this) and input it into the system: this will allow you to see the results on infographics.
- Implement an online appointment and automated mailing list with reminders, personalized offers.
- Prepare targeted advertising for segments of the “problem” audience – lost, reduced loyalty.
Author’s bio: Jean Hartley is a content writer at help me write my paper service. She used to live in a sunny Barcelona, so her hobby is still surfing.