Boulevard, provider of the client experience platform purpose-built for appointment-based, self-care businesses, announced the findings of new customer data analysis aimed at helping salon owners better understand the drivers of best-in-class client retention.
The report shows that salons with best-in-class retention rates optimize for online booking, obsess over creating seamless client experiences, and take a methodical approach to relationship building and upselling. The analysis also reveals that top-performing salons retain 56 percent more first-time visitors than average, and rely on first-time visitors for less than 10 percent of their total revenue.
Boulevard analyzed data generated by users of its client experience platform between January 2022 and March 2023. Spanning more than 11 million appointments and 4 million unique clients across more than 30,000 businesses and 2,500 service providers, the analysis paints the picture of an industry in which retention and recurring revenue are increasingly driven by experiences rather than services. More insights can be found in the full report, titled “The Official 2023 Salon Industry Client Retention Report.”
Defining best-in-class salon retention
Boulevard’s report shows a considerable gap between salons with best-in-class retention rates (defined as those in the top decile) and those with average retention rates. Top-performing salons convert 70 percent of first-time visits into a second appointment and 57 percent of first-time visits into a third appointment, compared to just 45 percent and 39 percent, respectively, for salons with average retention rates. For the average salon, more than half of first-time visitors never come back for a second appointment.
This is especially significant given that the report also shows the second appointment represents the primary tipping point after which new customers become loyal clients. Whereas only 45 percent of clients on average return to a salon after their first appointment, 70 percent of clients who complete a second appointment go on to book a third (81 percent for best-in-class), and 79 percent of clients who book a third appointment go on to book a fourth (85 percent for best-in-class).
The difference between a top-performing salon and an average salon thus isn’t the ability to get a new client in the door, but the ability to get that new client back in for a second appointment. Additionally, according to the analysis, salons that are merely average at retention need twice as many new clients to generate the same volume of revenue as salons with best-in-class retention, and thus have to spend far more time, energy, and money on customer acquisition.
Optimizing for online booking
Among the many best practices top-performing salons leverage to get to the critical second appointment and drive best-in-class retention, optimizing for online booking stands out as the most effective. Boulevard’s data analysis shows:
- Clients who book their first appointment online return for a second appointment 78 percent of the time, compared to just 39 percent for walk-ins
- Clients who book their first appointment online make it to a third appointment 54 percent of the time, compared to just 25 percent for walk-ins
- Overall, clients who book their first appointment online are twice as likely to return for second and third appointments than clients whose first visit comes via walk-in
Online booking doesn’t just drive improved retention, it also increases both average ticket value and lifetime customer value. According to the report, clients who request a specific stylist (an occurrence far more likely via online salon booking software) spend 30 percent more money per visit than clients who don’t request a stylist (as is standard with walk-ins).
“If there’s a singular takeaway from Boulevard’s new report, it’s that top-performing salons are overwhelmingly those willing to break with conventional thinking,” said Matt Danna, co-founder and CEO, Boulevard. “Whether it’s optimizing for online booking at the expense of walk-ins, rethinking how and when to push retail, or directing marketing spend toward securing the second and third visits rather than the first, the collective willingness of the salon industry to challenge long-standing norms is essential to its continued growth.”
Experience and relationships over upselling
In addition to online booking, top-performing salons drive retention by creating seamless client experiences and building meaningful relationships on a human level – and by not jumping the gun when it comes to pushing products or otherwise upselling. To ensure a second appointment, salons with best-in-class retention focus on educating clients during the first appointment and proactively communicating with them afterward.
Specifically, salons that leverage email marketing to proactively follow up and stay in touch with clients throughout their time as a customer achieve up to 15 percent more revenue per location. One thing top-performing salons aren’t proactive about is pushing for retail sales during the first appointment – and for good reason. Boulevard’s report shows that just 13 percent of all retail sales happen during the first appointment.
That’s not to say top-performing salons never upsell – they just do so after building relationships. Beginning with the second appointment, top-performing salons attach at least one add-on service to 60 percent of their tickets. They also leverage membership sales to drive 30 percent more revenue per location.
