Wednesday, March 31, 2010

What is Poor Customer Service Costing Your Salon?

All salons and spas rely on customer retention to keep their businesses growing - after all, the backbone of your success isn't the one time customer but the repeat customer. Repeat customers keep coming back and become the foundation you can rely on. That's why customer retention is so important.

Even worse, if you begin losing customers because of poor customer service, your business might fail. That's why customer service training is so important - to be truly successful, you have to establish strong customer loyalty that can translate to repeat business and great referrals. Most salon and spa owners don't realize how much revenue they are losing every year because of poor customer service. Do you?

How Much Revenue are You Losing? You'll be Surprised! Take this Simple Reality Check:

The cost of poor customer retention is enormous. When customers leave your business they are taking their money to competitors. You've not only lost revenue for your business, you've increased the profitability of your competition! It's a "double whammy" that can permanently damage your business. Take a look at this eye-opening formula and see how much your salon is losing each year because of poor customer retention.

Customer Service Formula:
  • Take your Average Annual Revenue Per Customer  X's  The Number of Customers Lost (Customers who leave annually)
    Example:$360 average annual revenue per customer  X's  100 lost customers = $36,000 in Lost Revenue pr year
The real profits that keep a salon and spa running and growing are in the second, third, and fourth sales to the same customer. Without this repeat business, most salons fail - and repeat business hinges more on Exceptional Customer Service than with anything else - including the products or services themselves.

Let's face it, if you are losing customers, you'll soon be losing employees. If you provide customer service training and other tools for all of your employees so that they can improve customer loyalty, they will feel more confident in their own success and the success of your business. You will have more loyal customers and more loyal employees!

Remember . . .

Some salons question whether or not they really have to make this effort. The reality is you really have no other reasonable choice. Customer service training will improve customer retention and ultimately determine whether you are in business next year.

Learn how to establish a consistent, branded customer experience ~ start by training all of your employees!

Ana Loiselle ~ Milady Business Coach and Trainer

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