Predictable income is your safety net – the income you can count on to help cover your overhead, pay your bills, and essentially keep your doors open. With a possible recession looming, it’s more vital than ever to ensure you are making the most of all recurring income opportunities. When it comes to predictable income, consider these best practices:
Memberships & Packages
Some of the best ways to create recurring income for your business include memberships and packages. Perhaps the most obvious choice for a salon would include blow-dry services; your team likely has many longer-haired clients who would love to get a professional blowout at regular intervals each month.
There are two ways to offer incentives to this segment of your clientele:
- Create a blow-dry club and offer memberships to the club. In this model, you’d likely offer unlimited blow dries for a club member for a flat monthly membership fee. Ideally, memberships would be for a year, with an easy way to renew.
- Offer a package of blowdries. Essentially you’d offer a discount for the services based on volume. For example, if you usually charge $50 for a standalone blowout, offer multiples for $40 each when purchased as a package of eight or more. The pricing and number of services, let alone the service itself, is entirely up to you.
What to Consider
Regardless of what services you wish to offer for memberships and packages, think through how your team will handle the workload logistically. You’ll want to make sure they are on board with all memberships and packages and that the process for purchasing and redeeming is set and implemented before you introduce them to your clientele.
In the blow-dry example, some members of your team may be more comfortable if the bookings are assigned to assistants and newer stylists. In such a case, clearly define who is willing to perform the services and adjust those options in your software settings by the service provider (including assistants) for both online and in-salon scheduling. It’s also advised to indicate anywhere you list your membership and package options that not all service providers participate in the program. You can also state, “service providers may vary.”
Assuming you’ve thought through the logistics and your team can manage the workload without added costs, membership and recurring packages can become a stable income source you can count on.
How to Track
To monitor how well your memberships are performing, use your salon software’s future recurring membership income report. That way, you can view potential income from recurring membership payments scheduled to be processed. A sales report can also help you track memberships, packages, and gift cards.
A great way to increase your sales any time of the year is through gift cards. Let your clients know about the option to purchase gift cards for their gift-giving needs throughout the year. However, you’ll want to set the monies aside from these purchases for when the recipient does redeem their gift cards in the future.
According to an article on USAtoday.com, nearly half (47%) of Americans have one unused gift card, voucher, or store credit, totaling $21 billion nationwide. On average, in 2022, a person has $175 in unspent gift cards, vouchers, and store credit, a $61 jump from 2021.
So, what does this mean for you? Likely a growing savings account.
You can also encourage your clients to take advantage of product subscriptions through your online store. With this feature, your clients sign up for regular deliveries of their go-to products at their set intervals. So, their favorite shampoo and conditioner can show up every six to eight weeks, for example, while a client’s must-have styling products ship every four or six months instead. Subscriptions are a great way to keep your clients stocked up with the products they love while increasing your passive income at the same time.
Yet another way to help ensure predictable income is by having your clients pre-book their appointments for the year. To do so, consider using a rewards program to incentivize them. A rewards program is where your clients accumulate points for every appointment they pre-book (and keep) and cash those points in later for other products and services. But, for the pre-book incentive to be effective, you have to let your clients know about the program and enforce it.
According to InsiderIntelligence.com, around the world, 56% of consumers said they’re more likely to buy from a brand with a loyalty program, but 64% of loyalty program members don’t redeem rewards more than a few times a year.
Consider adding or promoting existing services that require follow-up appointments. For example, extensions need to be moved up or replaced at regular intervals, and both lashes and acrylics need to be filled. By providing these luxury services, you’re introducing new revenue, and the follow-up appointments provide recurring bookings.
When it comes to predictable income, look to memberships, packages, gift cards, subscriptions, pre-booking, and even luxury services to help keep the coffers full…and the bills paid.