From First-time Visitors to Loyal Clients: The Art of Client Retention in the Beauty Industry

Did you know retaining a client is 5 times more cost-effective than acquiring a new one? especially in the beauty industry. Repeat clients do more than sustain your business – they drive growth.

“Loyal clients are not revenue generators; they’re your brand ambassadors”. 

According to Harvard Business School, repeat clients spend 120% more annually compared to new ones. But the critical question remains: How do you turn a first-time visitor into a long-term client? 

This blog will help you with the metrics to track your client retention rate by explaining each metric with formulas and calculations, guiding you to improve your retention rate in your salon business. We’ll also reveal practical tactics and how beauty salon software nurtures and measures success.

Let’s move forward on this journey of retaining clients and watch your business grow!

Table of Contents

What is Client Retention in Beauty Salons?

Client retention is a business’s ability to keep them coming back over time. It’s about building a lasting relationship with clients, ensuring they remain loyal to your beauty salon rather than seeking out your competitor.

• Loyal clients are more likely to try new services and products.
• Loyal clients don’t just bring repeat business, they also play a crucial role in growing your reputation and driving new clients through referrals.
• The money spent on keeping up with loyal clients is less when compared to the money spent on attracting new clients.

Why is Client Loyalty Important?

Without happy and satisfied clients, sustaining your beauty business becomes a challenge. Focusing on acquiring new clients costs more but loyal clients increase sales by up to 30%.

1. Trust & recommendations: Nearly 83% of clients said that they would recommend a brand to others that they trusted.
2. Cost-effectiveness: According to 82% of companies, client retention is significantly cheaper than acquisition.
3. Brand reputation: Loyal clients often become representatives of your brand, enhancing its reputation and advocacy through their positive experiences.
4. Increased spending: Repeat clients trust your brand and will spend more than new ones.
5. Engagement & feedback: Loyal clients are generally more engaged and provide valuable feedback.

What are the 3 R’s of Client Retention in the Beauty Industry?

The 3 R’s of retention include:

• Retention: Keeping clients loyal with your brand
• Revenue: Encouraging clients to repeat purchases
• Referrals: Turning satisfied clients into brand ambassadors

Client Retention Strategies for Beauty Salons

Here are 7 proven client retention strategies to help you increase your loyal client base.

1. Invest in loyalty programs
2. Develop a reward program
3. Offer tailored services
4. Seek out client feedback
5. Communicate your values
6. Focus on client satisfaction
7. Run multiple campaigns

Invest in Loyalty Programs

A loyalty program is an approach to offering rewards to clients who make frequent purchases or first-time visitors to retain them and build loyalty. With the advancement of technology, creating and managing loyalty programs is easier than you think. Here are a few types of loyalty programs:

• Prepaid: Clients pay upfront and use services later with added value.
• Packages: Discounted bundles of services or products.
• Membership: Discounted memberships for long-term benefits.
• Gift Vouchers: Customizable vouchers for clients to purchase or gift.
• Discount Coupons: Personalized deals to retain clients.

Also Read: Loyalty Programs for Salons: Enhance Your Salon Marketing!

Real-World Study: How Can You Convert First-time Visitors Into Returning Clients?

A beauty business acquires 114 new clients each month; approximately 75% do not return for a second visit, meaning 85 clients do not return, while only 29 clients become repeat clients.

Second Visit Retention

Among the 25% of clients who return (29 clients), with a service rate of $2,000 per client, the business generates $58,000 in retention revenue. However, incur a loss of $170,000 due to the 85 clients who do not return.

Increase retention rate to 40%

Setting a New Goal

To increase the retention rate to 40%, consider offering a 25% discount coupon for the second visit.

Financial Impact

Without a discount, only 25% of clients (29 clients) return, resulting in $58,000 in revenue (at $2,000 each). With a 25% discount, if 40% of clients (45 clients) return, you will generate $67,500 in revenue (at $1,500 each).

Strategic Conclusion

By implementing the first-time discount model, the business gained an additional $9,500 in revenue, along with the significant benefit of gaining 16 more loyal clients.

Develop a Reward Program

Reward clients for each invoice and let them use those points for upcoming bookings and purchases. Clients can accumulate reward points during checkout and redeem them for freebies, cashback, perks, etc. They don’t just earn reward points from purchases; they can also earn loyalty points from sharing on social media, leaving reviews, having birthday and more.

Offer Tailored Services

Allow clients to customize products or services based on their specific needs and preferences, leading to higher satisfaction rates. Also, offer bundles of services, packages, prepaid options, memberships, and customized gift vouchers to understand client behavior better and increase client loyalty. Additionally, provide discounts to high-value clients to encourage their continued patronage.

Unlock Unwavering Loyalty: Transform Your Salon with Customized Packages!

Seek out Client Feedback

Gaining regular feedback from clients is crucial for understanding their needs, preferences, and pain points. By actively seeking and responding to client feedback, you can effectively discern client opinions and values, as well as identify what is working well and what isn’t.

Moreover, with beauty salon software, automating the process of collecting feedback becomes simpler. This technology can facilitate the management of client responses, enabling you to update positive reviews on Google and intelligently address negative reviews by sending follow-up questions.

Communicate Your Values

Communicating your values effectively as a business offers numerous benefits, including the building of a strong and positive brand identity. Sharing your brand story and values through websites, social media, and marketing materials makes it easier to attract clients who align with those values, leading to greater engagement and dedication.

Creating blog posts, videos, social media content, and images that align with your values can further reinforce this effect.

Focus on Client Satisfaction

Client satisfaction is key to building a brand. Train your staff to provide exceptional client service, quick response times, and personalized services. Use insights and client behavior to understand and personalize client experiences, such as by recommending products and services based on their needs and past purchases.

Follow up with clients post-purchase to ensure their satisfaction and address any issues immediately to gain their trust and loyalty.

Run Multiple Campaigns

Utilize advanced marketing strategies like digital marketing, content marketing, email campaigns, social media ads, and traditional marketing to enhance brand awareness. Use client metrics to create targeted ads that reach different audience segments. Also, it’s beneficial to launch campaigns during holidays, seasons, festivals, and current events.

Most importantly, monitor how your marketing campaigns are performing to identify what works best and refine your approaches.

Importance of Tracking Retention Metrics for Long-term Business Success.

Many salons focus on attracting new clients, but how many of them return?

Without tracking client retention metrics, you lose clients without realizing it, and that directly impacts your revenue.

• Retention is more profitable than acquisition—Studies show that acquiring a new client costs 5-7x more than retaining an existing one.
• With strong retention rates, salons have consistent cash flow, making it easier to plan, invest, and scale.
• Loyal clients are brand ambassadors who refer friends and leave positive reviews that drive organic growth.
• Metrics help you to optimize loyalty programs and other operations for better client experience and long-term success.

Client Retention Formulas & Calculations

1. Client Retention Rate

Client retention measures the percentage of existing clients who return to your salon over a specific period.

Why does client retention rate matter?

The client retention rate reflects the ability of your salon to keep its existing clients coming back. These metrics help you to identify the areas of improvement and plan your next move.

How do you measure the Client Retention Rate (CRR)?

It can be calculated using the following formula:

Client Retention Rate = (E − N / S) × 100

Where:

• E = Total clients at the end of the period
• N = New clients acquired during the period
• S = Clients at the start of the period

Illustration:

A luxury salon business starts the quarter with 300 clients. At the end of the quarter, you have 270 clients in total. During this time, you gained 70 new clients.

Calculation:

Client Retention Rate = (E − N / S) × 100
                                                = (230 − 70/270)×100 

                                      = 59%

Interpretation: The salon retained 59% of its clients.

How to improve client retention rate for salons?

• Offer referral discounts to encourage client retention and new customer acquisition.
• Implement a loyalty program offering discounts or rewards for repeat visits.
• Personalized services by keeping records of client preferences.
• Follow up with clients via email,  SMS or WhatsApp reminders for upcoming appointments.

2. Repeat Purchase Rate

The percentage of clients who have made more than one purchase within a given time frame.

Why is it important?

• A high repeat purchase rate indicates customer satisfaction and strong service appeal.
• It helps measure client loyalty and predict revenue trends.
• Encouraging repeat purchases increases the lifetime value of each client.

How do you measure the repeat purchase rate in client retention?

Formula:

Repeat Purchase Rate = (Returning Clients / Total Clients) × 100

Illustration:

A beauty clinic served 650 clients in a month, and 400 of them were returning clients.

Calculation:

Repeat Purchase Rate = (400/650) × 100 = 61%

This indicates that 61% of clients returned for another service within the same month.

How can the repeat purchase rate for salons be measured?

• Offer package deals that encourage multiple visits, such as “Buy 5 Facials, Get 1 Free.”
• Implement a VIP membership with perks for frequent visits.
• Send follow-up reminders and exclusive offers to clients who haven’t returned after their last appointment.
• Personalized service recommendations based on past purchases.

3. Client Lifetime Value (CLV)

The total revenue a business can expect from a single client over their lifetime.

Why is this important?

• Helps determine the long-term profitability of each client.
• Assists in setting a budget for customer retention efforts.

How do you measure client lifetime value in client retention?

Formula:

CLV = Average Purchase Value × Purchase Frequency × Client Lifespan

Illustration:

A salon calculates the following:

• Average Purchase Value: $70 per visit
• Purchase Frequency: 12 visits per year
• Client Lifespan: 4 years

Calculation:

CLV=70×12×4=3360

Interpretation: On average, each client contributes $3,360 in revenue over three years.

How to improve client lifetime value for salons?

• Offer exclusive VIP memberships to increase loyalty.
• Provide value-added services to increase spending per visit.
• Engage clients through personalized marketing campaigns.

4. Churn Rate

The percentage of clients who stop visiting or purchasing from the business.

Why is it important?

• A high churn rate indicates dissatisfaction and a potential loss of revenue.
• It helps identify gaps in customer experience and service quality.
• Reducing churn improves overall retention and business stability.

Formula:

Churn Rate=(Clients Lost During a Period/Total Clients at the Start)×100

Illustration:

At the start of the year, the salon had 500 clients, but by the end of the year, 100 clients had stopped visiting.

Calculation:

Churn Rate=(100/500)×100=20%

Interpretation: The salon lost 20% of its clients over the year.

How to improve the churn rate for salons?

• Improve customer engagement through follow-ups and personalized recommendations.
• Conduct exit surveys to understand why clients are leaving.
• Address common complaints and improve service offerings.
• Offer personalized discounts or promotions to win back lost clients.

5. Net Promoter Score (NPS)

Measure client satisfaction and loyalty by asking clients how likely they are to recommend your business on a scale of 0-10.

Why is it important?

• A high NPS indicates strong customer advocacy and brand trust.
• It helps gauge overall customer satisfaction and the likelihood of word-of-mouth referrals.
• Salons with high NPS scores often have better retention and revenue growth.

Formula:

NPS = % of Promoters − % of Detractors

Illustration:

A salon asks 150 clients to rate their likelihood of recommending the business on a scale of 0-10:

• Promoters (9-10 ratings): 80 clients
• Passives (7-8 ratings): 45 clients
• Detractors (0-6 ratings): 25 clients

Calculation:

NPS = (80/100×100) − (25/100×100) = 80−25=55

Interpretation: A positive NPS of 55 indicates strong client loyalty.

How to improve the net promoter score for salons?

• Provide exceptional customer service and personalized experiences.
• Actively ask satisfied clients to leave online reviews and refer friends.
• Address negative feedback from detractors to turn them into satisfied customers.
• Offer referral incentives to promoters to encourage word-of-mouth marketing.

6. How to calculate clients’ average visit frequency

Tracks how often a client visits within a specific period, helping to identify trends in client engagement.

Why is it important?

• Indicates client satisfaction and retention strength.
• Guides decisions on memberships, packages, and pricing.
• Enables targeted promotions and appointment reminders.
• Helps in scheduling staff and managing inventory efficiently.
• Highlights the need for better follow-ups and engagement tactics.

Formula:

Average Visit Frequency = Total number of visits / Unique Clients 

Illustration:

A beauty salon tracks 1,500 visits in a month from 650 unique clients.

Calculation:

Visit Frequency=1,500/650=2

Interpretation: On average, each client visits the salon twice per month.

How to Improve Clients’ Average Visit Frequency?

• Introduce quick services (e.g., trim, touch-up) to encourage more frequent visits.
• Identify patterns and send targeted offers to clients who haven’t visited in a while.
• Engage with clients through social media, referral programs, and exclusive events.
• Offer discounts or priority bookings for clients who schedule their next visit before leaving.
• Run seasonal offers or bundled packages that require multiple visits.
• Use SMS, emails, or app notifications to remind clients when they’re due for a visit.

How to measure revenue from returning clients?

Compares the revenue generated by repeat clients versus new clients to assess the financial impact of client retention efforts.

Why is it important?

• Ensures stable income and better financial planning.
• Helps track the success of loyalty programs and incentives.
• Shows whether to focus more on retention or acquisition.
• Helps optimize marketing spend and client engagement.
• A strong returning client base reduces dependency on new clients.

Formula:

Revenue from Returning Clients = (Revenue from Repeat Clients / Total Revenue) ×100

Illustration:

A salon generates $150,000 in monthly revenue. Upon analysis, they find:

• $100,000 comes from returning clients
• $50,000 comes from new clients

Calculation:

Revenue from Returning Clients = 100,000 / 150,000 * 100

Interpretation: Returning clients contribute 66% of the total revenue, proving the importance of retention efforts.

How to Improve Revenue from Returning Clients?

• Send post-visit thank-you messages and feedback requests to build stronger relationships.
• Offer discounts, free services, or points-based rewards to encourage repeat visits.
• Send customized offers, birthday discounts, and appointment reminders.
• Recommend add-on services or retail products to increase spending per visit.
• Provide excellent service, ambiance, and comfort to keep clients returning.
• Provide exclusive benefits for clients who commit to regular visits.

Wrapping Up

In conclusion, the journey of building client loyalty is continuous and dynamic. By investing in loyalty programs, developing a reward system, offering tailored services, actively seeking client feedback, effectively communicating your values, focusing on client satisfaction and running diverse marketing campaigns, you can significantly enhance client loyalty. These strategies not only attract first-time visitors but also impress loyal clients with the desire to keep coming back.

To make things easier, MioSalon software gives you every information you need. Gain complete access to detailed client information, appointment and purchase history, etc., through its spa and salon management software. 

Book a Free Demo Now!