When you run a hair and beauty business, retaining clients is as important as attracting new ones. Loyalty programs, membership and referrals are a few marketing strategies you can implement in order to retain existing clients. Another strategy to keep clients in the loop or retain them are prepaid wallets. The term is quite self-explanatory and, in the salon, and spa business, prepaid programs make sure clients keep coming back. Contrary to pay-as-you-goal models, prepaid models lead to a 25-30% increase in client retention.
What is a Prepaid Wallet?
As the term implies, a prepaid wallet allows salon clients to deposit money in advance, which they can redeem later when paying for products or services. This prepaid balance is paid by the clients itself. However, it is only a convenient payment method. When a prepaid model is well-designed, it builds client trust and loyalty, and results in repeat visits. The prepaid balance is usually stored in a virtual wallet which clients can use when they’re scheduling an appointment on the salon booking system. Prepaid wallets are pretty simple and there is no catch to it. Prepaid models not just benefit the client but the salon and spa owners too. They can be assured of recurring revenue, a steady flow of income and more clients.
How Do Prepaid Wallets Work?
- A client adds money to their prepaid wallet on your salon and spa software
- They use this prepaid balance for bookings, retail product purchases, and other salon-related items
- You can offer bonuses for wallet top-ups
- When the balance runs low, customers receive reminders to reload their wallets
Benefits of Prepaid Wallets
Here are a few benefits of prepaid models:
- Is a Flexible Payment Model
Most salon software available support diverse payment options. This enhances flexibility and convenience. With prepaid wallets, clients can go cashless. It is a seamless solution as clients can pay an amount upfront and utilise the services later.
- Businesses are Assured of Predictable Revenue
Salon businesses these days want a chunk of assured revenue. This steady stream of income comes from prepaid wallets. Since clients pay earlier, they are assured of predictable revenue. This also helps them make informed decisions and financial plans. With income being predictable, salons and spas can make smarter investments in tools, equipment and staff.
- Aids in Client Retention
Prepaid wallets have a crucial role to play in client retention. When clients know their balance is about to expire, they’re more likely to visit a salon to redeem their balance. This enhances client retention. When the balance is running low, clients will also want to top it up. Thus, prepaid wallets encourage repeat business.
- Psychology behind Prepaid Wallets
Prepaid wallets also ride high on psychological principles. Once a client loads a wallet, they are more inclined to use it so that they don’t avoid wasting the balance. Also, when they have a certain balance already in their prepaid wallet, they’re more likely to book an appointment so that they get their money’s worth. When incentives are tied to wallet, clients will come back often to unlock the other benefits. This considerably boosts client retention.
Importance of Client Retention
In any beauty business, client retention is of utmost importance. A few reasons salons should focus on client retention is because:
- It is Cost-effective: Acquiring new clients is 5x more expensive than retaining existing ones.
- Helps in Word-of-Mouth Marketing: Satisfied and loyal clients tend to spend more. They become your unpaid brand advocates.
- Repeat Clients Lead to Better Revenue: When clients visit your business often, they tend to spend more over a period of time. Studies reveal that repeat clients spend 67% more than new clients.
8 Fool-proof Tips to Design a Prepaid Wallet for Maximum Client Retention
- Offer Bonuses on Wallet Top-ups
To maximise the number of clients who sign-up for your prepaid wallet, consider offering bonus credit. This will encourage clients to deposit more. Here’s how it works:
- Pay Rs. 3000 – Get 3,500
- Pay Rs. 4000 – Get 4,500
- Pay Rs. 4500 – Get 4,800
When clients see that they’re getting more value, they’re likely to load their prepaid wallet immediately and return quickly to use their balance. Also, in a lot of cases, clients end up spending more than what they already have in their prepaid wallets.
- Offer Exclusive Discounts for Wallet Users
The goal of any kind of program is getting as many clients to sign-up as you can. When it comes to prepaid wallets, you can lure customers by offering them exclusive discounts. For instance, you can offer a discount to those customers who are using prepaid wallets, free add-ons or priority booking. It gives clients the impression that they are VIP users and thus they will sign-up to your wallet program.
- Give the Bonus Credit a Time Limit
Most salons that offer prepaid wallets have no expiry date attached to it. However, in many cases, clients end up taking this for granted. What you can do is keep the base amount active indefinitely and add an expiry date to the bonus amount of the wallet credit. An expiry date drives urgency. Clients will visit your salon frequently within a short span.
- Enable Easy Reload
Your prepaid wallet experience should be seamless. Reloading the balance shouldn’t be a long procedure. Anything complicated will only draw clients away. When the balance falls below a certain threshold, send out automated alerted messages that notifies clients of their existing prepaid balance along with the expiration date. You can leverage salon software to send these automated reminders.
- Gamify the Experience
As a salon owner, you need to constantly think of new and innovative ways to keep clients engaged. Whether it’s a loyalty program, membership program or prepaid wallet, it may be a good idea to gamify it. Send out creative messages, milestone rewards and more. You can even make it like a challenge. For instance, “Book 2 services this month and earn 2x more points”. When your prepaid wallet program creates a sense of achievement and attainment, clients get a reason to keep coming back.
- Promote the Program
To attract more clients to your prepaid model, promote it efficiently. You can market prepaid models on social media, via in-salon signage and word-of-mouth marketing. A lot of your regular clients may be unaware that you run something like this.
- Send Automated Reminders
When you run a beauty business, all kinds of clients will visit you. There will also be a few clients who are forgetful. For their sake, you need to send automated reminders or personalised nudges. You don’t have to do it manually as your salon management software does it for you. It tracks wallet data and accordingly triggers communication. By sending out timely reminders, your brand stays on top of the mind and you can drive client action. Example: “Hey Jane, your wallet balance expires in 10 days. Avail today. Hurry”.
- Integrate the Prepaid Wallet into a Salon Booking App
Ensure the prepaid wallet can easily be integrated into the latest salon software. This enables clients to book an appointment and redeem their balance at the same time. Also, in a single dashboard, they should be able to view their real-time wallet balance, wallet history and usage breakdown, and bonus credit. Whether it’s top-up or redemption, it should be in one-click.
In Summary
For your salon, spa or beauty business, a prepaid wallet isn’t just another payment option. It’s a marketing move that helps you thrive in this competitive market. It also drives long-term client relationships. Financial incentives drive brand loyalty. If you’re a salon or spa owner who plans to design prepaid wallets to maximise client retention, make sure it is not gimmicky. It should empower clients to save money and foster a better relationship with your salon.
When you’re designing a prepaid wallet, keep the client in mind, and what they will want from you. Once you master the art of designing a prepaid wallet, it will become your most powerful loyalty tool.
Ready to launch your prepaid wallet? Leverage Salon360App to manage prepaid balances, track performance and send reminders.
