Client retention and request rates are common measuring sticks that salons and spas use to monitor and reward employee performance. Let’s look at which is more valuable for your business!
What is Client Retention?
Client retention measures how many clients make a return visit to your salon or spa within 90-120 days from their last visit OR have a minimum number (you decide) of visits within a one-year period (Usually a minimum of 3). When determining client retention, it doesn’t matter which provider the client saw or which service they received, only that they frequent your business.
What are Request Rates?
Request rates measure the client loyalty that your service providers are building up over time. Tracking request rates is the same as the client retention formula above EXCEPT you also measure whether or not your clients returned to the same service provider for each of their return visits.
Which One Should You Track?
Although many salons and spas want to see their stylist/therapists/estheticians or other service providers build a strong following, there are inherent risks in promoting this aspect of your business with higher pay scales or performance bonuses. When clients see multiple service providers, it creates a culture that is focused on the health of the salon or spa as a whole, not just individual people, which can help with overall client retention numbers. Tracking request rates can also be misleading when you consider first-time retention rates.
Here’s An Example:
Let’s say one of your service providers has a 100% request rate and a waiting list (i.e. all clients that see this provider request to see them again if they return). They’ve been with you for years and you’ve watched their request rate slowly increase over time, resulting in several pay raises and bonuses. However, what you may not have noticed is that this service provider actually has a first-time client retention rate of only 30%. Meaning for every 10 new clients they see, at least 7 never come back. Now you might be rethinking those pay raises and bonuses…
Client Retention Is Better!
Tracking request rates doesn’t reveal how many potential clients were actually dissatisfied with your service provider on their first visit. Promoting request rates also ties clients to their favorite service provider, leaving your business vulnerable to losing clients.
Conversely, client retention reflects a series of positive experience touch-points throughout your business that lead clients to return. By promoting these positive touch-points, your client retention focus will create a team-based mentality with your staff instead of pitting providers against each other for client dollars.
Make sure you talk with your management software provider to see how you can run client retention reports with custom parameters that best fit your business model. There are many different ways to run retention reports, and some are more useful than others. ProSolutions offers over 300 custom reports and a tool for you to write your own report parameters, we’re here to help you get your numbers!
