Is your rewards program working for you?

While the main growth area for the spa industry may lie in attracting the millions of folks who have still never enjoyed a spa service, now doesn’t seem like the time to rollout a new spa marketing program.  Most consumer-oriented businesses today have some version of a loyalty or rewards program, with the idea being they’ll cement relationships with the clients they’ve already got.  It certainly is more cost-effective to have clients who already know and love you come in more frequently, or spend more each time that they come, than to try to cast a wide net to draw in more clients.  But the cost/value ratio of rewards programs can be difficult to measure, and if your program is not planned correctly, it can even have a negative effect.

Think about it; just randomly awarding points, with no guidelines on redemption, can create a situation where clients who have been happily paying for something all year, like massages or highlights, get that same service for free.  Perhaps you just deduct those lost dollars as a marketing expense, but was it really marketing, if the client received the same service with the same technician that they always get?  Wouldn’t it be more useful to direct at least a portion of the points earned towards services or providers that are new to the client?  Using points programs in this way can be an effective means of internal marketing with a high degree of success in retaining the clients for these new services; after all, you know they already faithful fans of your spa or they wouldn’t be members of your loyalty program in the first place.  (I am assuming here that your rewards program targets loyal repeat clients, not just any random one-off customer, but more on that in another blog!

At their best, rewards programs should work to drive particular behaviors on the part of your clients, such as encouraging them to try new and different services and providers or a new retail item.  Trouble booking your weekday mornings?  Why not offer double-point Tuesdays before noon, or similar incentives for early morning appointments with a particular therapist?  Or a ‘passport’ program, where they earn points for visiting different departments.  Create some new and unusual offers and try them for a short period of time.  Test different approaches, evaluate the results, and try something new next time.

Going beyond the obvious, what about teaming up with another business on a loyalty reward?  Let your clients redeem their points for a dinner for two at a local restaurant, and you can barter with the restaurant to offer spa services to their patrons.  Perhaps tie a rewards program in with a charity, much as many airlines allow you to donate unused miles to socially beneficial programs.  Today’s Wall Street Journal has an article by Julie Jargon about some of the new twists that restaurants are introducing to their loyalty programs.  According to the article, Starbucks recently offered their high-level rewards members a chance to buy a rare coffee before it was offered in the store; an email was sent to the 1 million members of this program and the coffee (not discounted) sold out in one day!  As the article reports, restaurants have discovered that discounts and dollar meals do not pay the rent, so they are resorting to more sophisticated enticements.  Just look at how small local coffee shops that offer free WIFI are filled with laptop-toting folks who used to be at Panera

Being creative now and really solidifying your relationship with your core clients will give you something to build on when the consumer hold on discretionary dollars further loosens.  Let me know if you have a rewards program in your spa, and if you have tried anything new with it.