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Two on-going challenges for valued priced salons are:
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- A continued churn in their client base due to the price sensitive nature of the category and stylist turnover that impacts continuity of service.
- A low percentage of clients purchasing retail products in these salons, which impacts repeat service visits and erodes margins and each salon’s profitability.
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Traditionally, value priced salons primary marketing strategy was to heavily discount haircuts through mass media mailers and inserts. Most locations were pleased with a 1% or 2% response. These type of promotions did not encourage repeat visits and retention and competitors could quickly follow-up with a better offer, making price the sensitive issue.
In December, 2004, Group 3 Marketing launched a pilot program with the Fantastic Sams Minnesota Region using data provided through SuperSalon POS software to implement a mailing program to salon clients based on their previous activity patterns.
Today clients are segmented into nineteen unique segments each month. Beyond birthdays and rewards, we classify clients into three broad categories: New, Active (within a preset time period) and “Lost,” meaning the clients who have not had any purchase activity after the preset active period.
The three classifications are then further segmented based on services and retail purchased.
What makes this program unique is that each franchise owner may select the segments to be mailed and therefore control the monthly cost by location. We recognize that each owner has a budget and we help the owner manage it.
Personalized oversized four color postcards are used for the mailings. Owners select the specific offers they want and the price point for each offer.
Early results are very positive. Clients who receive postcards are coming back. The last monthly mailing posted response rates from 24% to 40%. What is interesting is that many of these clients are returning but are not bringing back their discount coupons.
Since the initial launch with three locations in December, 2004, the number of locations have increased to twenty four in Minnesota, Wisconsin, and San Diego.
Click here to see samples of the postcards:
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February 2005
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January 2005
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JPGS:
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PDF's:
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March/April 2005
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March/April 2005
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