Why Client Referrals Are Even More Important Than You Think  – Career

If you own or manage a salon or any other self-care business, there’s arguably no better feeling than when a client you’ve never seen before walks in the door and says that a friend or family member told them they simply had to come to see you. It’s a validation of the time and energy you’ve put into delivering the kind of memorable experiences that your clients can’t help but rave about. So, yeah, all of us in this industry certainly appreciate a good client referral now and again. 

Here’s the thing, though: we should do a lot more than just appreciate and be grateful for client referrals—we should pursue them with reckless abandon, as if they are the single most important and most powerful driver of business growth we can harness. While just about every self-care business owner does the former (the appreciating of referrals), few are truly doing the latter (the pursuing of them with reckless abandon). And that’s a shame, because according to newly released customer data from Boulevard, there may be no singularly potent lever self-care businesses can pull in pursuit of growth.  

For starters, even in this era of online reviews, Instagram influencers, and digital sizzle reels, word-of-mouth referrals still carry the day, evidenced by countless studies in which word-of-mouth ranks comfortably ahead of the pack as the top factor clients consider when choosing a new product or service provider. But it’s not so much the getting them in the door that makes client referrals so powerful; it’s what happens once you do. 

According to Boulevard customer data, referral customers are far more valuable than non-referral customers, both today and over the long term. Data shows that referral customers: 

• Spend 68% more money per visit
• Return for a second appointment 28% percent faster
• Book 45% more total appointments per year
• Have a 4% higher 30-day retention rate

In other words, referral clients spend more money than non-referral clients, come back for a second appointment much faster than non-referral clients, and book far more appointments each year than non-referral clients. That’s pretty much the self-care business growth trifecta right there. You’ll be hard-pressed to find another factor so deeply correlated to favorable client behaviors and business outcomes.

Now, I can stop this article right here, and you’d have all the motivation you need to immediately put developing a best-in-class referral program smack at the top of your to-do list. But I still haven’t gotten to what is arguably the most surprising and impactful data point of them all. 

According to Boulevard platform data, which captures data from more than 2 million self-care appointments each month, referring clients spend 53% more money per visit than non-referring clients. Re-read that last line: referring clients are more than 1.5X times more valuable to your bottom line than non-referring clients. So, if you’re keeping score (and you should be!), that’s more money from clients receiving the referral, and more money from clients doing the referring. That may be the single biggest win-win in our industry. 

So, how do you go about turning it into a win for your business? If you don’t already have a high-performing client referral program, what does it take to build one? Before we get into that, let’s define what a high-performing program even looks like. With the caveat that every single business in this industry is different, I generally advise our customers to aim for somewhere between 25% and 50% of new clients coming in from referrals. If you’re in the range, chances are you’ve got a healthy program in place. If not, here’s how you can get there. 

Make it simple for clients to refer 

As in, mind-numbingly simple. This is not up for debate. If clients have to bend over backwards (or even slightly) to initiate a referral—or worse, if they aren’t even aware that you have a referral program in place—you can forget about getting any. Give them clear, simple, preferably digital options they can easily act on, such as a unique booking link offering a first-appointment discount that they can quickly and easily share with their networks. To make it as simple for you as it is for them, make sure that your referral tooling is integrated directly into the platform you use to book appointments and process payments. 

Incentivize! 

As the saying goes, you only get what you give, and the more you’re willing to give, the greater the chances you’ll get the referrals you’re after. You don’t have to go giving away the world, but even small gestures like an account credit, a discount on a package, or a free add-on can go a long way toward incentivizing your existing clients to take action.

Train your staff 

The best way to get your clients thinking about referrals is to get your staff thinking about them. Your team is your most effective marketing engine. Make sure it’s second nature to be talking up your referral program at every opportunity (within reason and without being annoying, of course). If they’re uncertain what to say, help them out by giving them quick scripts and alerting them to signals that a client might be a good candidate for the referral program, such as when they comment about how much they loved their service or say that their friend or parent just has to come here too. 

Measure and track relentlessly 

While I could probably write this at the end of an article about literally any subject relating to operating a self-care business, it still bears repeating: make sure you’re measuring and tracking everything you can, especially what offers are working and through which channels. Combine that with proper training, the right incentives, and a commitment to simplicity, and you’ll have the foundation you need to tap into one of the most powerful tools in the business. 

About the Author