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The client numbers that will grow your business

19 Oct 2017 by Kitomba

We know how important your clients are. You focus on providing them with the best service. You focus on remembering the details like their favourite hot drink and that they’re excited for their holiday next week. But there’s another way you can focus on your clients which will grow your business – by looking at the numbers.

Client rebooking rate

Rebooking is a future appointment made within 24 hours of the previous appointment. You should be aiming for a rebooking rate of 75% and above, however, New Zealand’s average rebooking rate is 46% and Australia’s is just 39%.

Focussing on rebooking is crucial for your business as it’s a strong indicator of business performance and the easiest way to secure future revenue.

It’s also beneficial in all aspects of your business:

  • For your team, it ensures a pre-booked column, job security and motivation from constantly being in demand.
  • For your business, you’re securing future income so you can make important decisions with confidence. Plus an increase in visit frequency and a reduction in time, energy and money spent finding new clients will result in boosted profits.
  • For your clients, regular visits mean you’ll develop better relationships, they’ll get appointment times that suit them and overall their hair and beauty maintenance will be improved.

Tip for increasing client rebooking rate: Get your team onboard! Run a competition where the staff member who rebooks the most clients in a week wins a prize or set a team target and treat everyone to a coffee if they reach it.

Client retention rate

Client retention, like rebooking, is also measured in time. If your client doesn’t make a future booking within 24 hours of their last appointment but they do book again, they are considered retained.

The key to retention is creating loyal clients by providing high quality service and a fantastic experience. Loyal, long-term clients are important for three reasons:

  1. They’re your easiest, most predictable source of revenue: They’ve already purchased from you, they already know you and many are likely to continue doing so.
  2. They’ll spend more with you because existing customers are less price focussed so you won’t need to offer discounts like you would to attract new customers. Plus because they trust you, it’s much easier to upsell and increase your profits.
  3. They’re your best form of marketing: Word of mouth is the primary factor behind 20-50% of all purchasing decisions, and referral leads convert around 30% better than leads from other marketing channels.

Tip to increase your client retention rate: In addition to providing a high-quality experience every visit, create a loyalty programme for your clients to reward them for their loyalty. This is also a nice opportunity to reinforce why they keep coming back.

Average client spend

Your average client spend is the total amount spent by clients on services and retail, divided by your total number of clients buying services and retail. This number is a key indicator of the profitability of your client base. It shows that you don’t necessarily need more clients to make more money – increasing your average client spend will add to your bottom line without the cost associated with attracting new clients.

Tip to increase average client spend: Look at the numbers. Are your prices in line with what your competitors or the industry are charging? Kitomba’s unique Benchmark feature allows you to track this so you can see where you’re performing well and where you can grow further. You might need to review your prices or introduce complementary add on retail products or services such as treatments and encourage your team to upsell these to their clients.

Client revisit period

Your client revisit period is a really important number. The length of time clients take between appointments can have a huge impact on your annual revenue. That’s because reducing it by even the shortest amount of time will result in a massive jump in revenue.

Here’s an example based on averages of real Kitomba appointment information: If your client revisit period was reduced from 6 weeks and 4 days to just 6 weeks and you complete 95 appointments a week at an average client spend of $99 you would be able to complete 9 additional appointments each week. That’s almost $900 extra per week and $46,000 per year!

Tip to reduce your client revisit period: Run a training session with your team on ways to reduce their client revisit periods. For example, remind your staff they’re the experts, so they should educate clients on why they need to visit every 6 weeks for their colour or every 4 weeks for a facial.

New client rate

Retaining clients and creating loyal ones is really important, but you can’t forget new clients. They’re the lifeblood of any business as they link directly to revenue. A consistent increase in clients allows you to be certain of business growth and it also ensures that more potential clients are hearing about your business.

Take a look at your new client rate. This is the proportion of your serviced clients who are new in that period. It should be sitting at a minimum of 10%. Businesses naturally lose an average of about 10% of their clients each year, so you need to focus on countering this.

Tip to increase your new client rate: If your percentage of new clients is low and you regularly have gaps in your appointment book, it’s time to kick off some marketing activities to get more clients through the door. Finding new clients can be an expensive exercise but there are cost effective alternatives. For example, run an ‘introduce a friend’ promotion or put a little money towards some Facebook advertising.

If you’re experiencing the opposite and your new client rate is low but you’re fully booked weeks in advance, your business has reached capacity. So it’s time to grow! Do you have a large enough salon? Do you need to look at growing your team?

There are so many ways to grow your business by focussing on these key client numbers. So take some time to run your reports and see which areas you could work on so you can become even more successful.

Kitomba Salon and Spa Software can help you understand your business and grow your client numbers. Contact us to find out how Kitomba can help you grow your salon, spa or clinic.

This blog post was updated on 11 October 2018.

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2 comments

  1. Thanks for the info but being a day spa beauty service we do not do hair it would be nice to get some feed back on our industry without hair. Understanding all about hair dressing and that NZ do this. It would be nice if we AU beauty could get more relevant information so we can train our team can we have more insight into these types of situations for thr future.
    Thank you for your considerations

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