How to turn happy clients into a growing customer base with referral marketing

As a salon, spa, or medspa owner, you have probably tried a variety of ways to attract new clients. You may have created partnerships with nearby hospitality businesses, tried storefront promotions to encourage walk-ins, and run social media campaigns to showcase your services and grasp of the latest trends.

Those are all good ways to attract new guests. But you might be underutilizing a powerful resource: referrals from satisfied customers. According to a 2020 consumer survey, 93% of buyers trust friends and family for brand and service recommendations. Only 38% trust advertising.  

There is a passive approach and a proactive approach to seeking referrals. More on that in a bit.

You already know that your customer base grows when satisfied guests refer friends and family to your business. How well are you leveraging that trust?  

Below, we'll look at the definition and advantages of referral marketing – including one you probably haven't thought of. After that, we'll take a pulse check so you can gauge your current approach.

Finally, we'll cover the benefits of implementing a digital referral program with Zenoti, the most complete software platform for salon and spa management.

What is referral marketing?

Customer referrals have been around since the dawn of commerce all across the globe. Businesses improving from organic word of mouth is nothing new.

Referral marketing, however, is a more recent addition to customer acquisition strategies. It helps businesses intentionally tap into the power of word of mouth.  

Companies promote referrals by offering rewards. They give the referring and referred parties incentives like service discounts or complimentary products to thank current customers for referring others and encourage new customers to try the business.

What are the advantages of referral marketing?

Here are three advantages of using guest referrals to drive new business:

1. Referral marketing is cost-effective.
   Unlike other guest acquisition strategies that come with costs for design, production, and media placement, word of mouth is free.

2. Referred leads have a higher chance of conversion.
   Are you more likely to try a salon based on a friend's recommendation (memorable, personal) or an ad (lost in the clutter, impersonal)?  

3. Referred guests tend to deliver a higher lifetime value.
   With personal connections driving word of mouth, referred guests are more likely to stick with your business. Their spending from initial and return visits adds up over time.

Is your referral marketing passive or proactive?

There are two ways to expand your customer base with referrals. One is time-consuming and gives way to errors and additional work; the other is streamlined, simple – and more effective. Check below to see if your current approach is passive or proactive.

The passive approach: a traditional, paper-based referral program  
This is the old, conventional approach, usually using a referral card of some kind. You're counting on satisfied customers to remember to tell their friends and family, and hoping those potential new guests will go online or call your front desk to book.  

This approach leaves too much to chance. It relies on a series of events (that are out of your control) to get referrals made and appointments booked. Paper-based programs are also difficult to track, with referral brochures or cards being forgotten, lost, or misplaced.

The proactive approach: software that includes referral marketing
The best referral marketing programs are digital – and should be part of your business software. See if your current salon or spa management software has referral marketing built in. If it doesn't, you're missing out on the benefits of an effective guest acquisition tool.  

Look for a digital referral program that does the heavy lifting: sending referral requests and rewards. Your staff is then spared the work of 1) educating guests about the program and its incentives, 2) managing reward redemptions by hand, and 3) tracking program effectiveness with spreadsheets – again, a manual chore.

How Zenoti manages referral marketing for you

Creating and managing referral programs is a breeze with Zenoti. Here are five key features that can make a difference for your business – and lighten the load for your staff.

Feature #1: Automatic referral requests at key touchpoints in the guest journey

Touchpoint A: When guests book online
Online booking screens in your webstore and on your mobile app can include a prominent referral button as seen in the booking experience for Zenoti customer Glosslab:

The "Refer Here" button – in Glosslab brand colors – is a subtle call-to-action, making it easy for guests to refer friends and family from their computer or mobile device.  

Touchpoint B: When guests receive appointment confirmations
Include a "refer friends and get rewarded" button on the online booking confirmation screen (web and mobile). With their own appointment booked, guests can quickly refer their friends and family from the same screen.

Touchpoint C: When guests leave five-star reviews
Prompt your happiest guests for referrals. When a customer leaves a five-star review of your business, that can trigger a text message to them with a referral link. They can act on it while their positive experience is still fresh.

By engaging with guests at these three critical touchpoints – especially on mobile devices – you can increase your volume of referrals, and the percentage of those referrals converting to booked appointments.

In addition, with Zenoti's digital referral program for salons, spas, and medspas, referral discounts are applied automatically at checkout, a smooth experience for both guests and staff.

Feature #2: Two-sided incentives for referring and referred guests
Reward both the referring customer and the friend or family member they referred. Check out a great example of this on the "refer-a-friend page" of Zenoti customer Tricoci Salon & Spa. As of this writing, it reads: "Invite a friend to experience Tricoci for the first time and both of you will receive a $20 Referral Bonus."

Feature #3: Customizable program details
You'll configure parameters like the type of rewards to offer (discounts or gift cards), the locations that will participate in the program, reward caps to prevent program misuse, and more.

Feature #4: A consistent experience across all locations
Unifying the program makes the redemption process effortless for guests and easy for staff. Guests can redeem referral rewards at any of your locations, with no manual work.

Feature #5: An effectiveness report to monitor program performance
Gain insight into information you'll want to track, such as the names of referring guests, number of referrals, and rewards redeemed.

Recap: With referral marketing as part of Zenoti, beauty and wellness businesses can:

• Request referrals at key touchpoints in the guest journey, across both web and mobile.
• Offer two-sided incentives to reward both the referrer and the referred guest.
• Configure the program with business-specific parameters and limits.

• Ensure consistency across store locations for a better guest and staff experience.
• Track program performance to gauge what's working and what to fine tune.

Ready to grow your customer base with referral marketing? Request a free Zenoti demo.

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"The Zenoti webstore has been a tremendous asset to our business. Clients love the ease of booking appointments online, and the referral and loyalty features are great. The team at Zenoti has been tremendously responsive and helpful, through the implementation of the webstore to customizing it to fit our needs and branding."
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‍ – David Alexander, President, American Haircuts

Summary

Nine in 10 consumers trust recommendations from family and friends, and referral marketing offers your salon, spa, or medspa a way to leverage that trust.

If your current referral program is not gaining traction, you're probably relying on guest memory for referrals made and appointments booked. If you're trying to manage a paper-based referral program, you're likely seeing uneven referral redemptions, inconsistencies in the guest and staff experience across locations, and complicated reporting.  

Zenoti software minimizes or eliminates those issues and greatly simplifies the launching, maintaining, and tracking of a digital referral program.