It doesn’t matter how busy, big or beautiful your salon/spa is, if you want to know just how good your business is, take a hard look at your client retention rates.

FACT: Client retention rate tells the truth about the quality and consistency of the technical skills and customer service experiences your salon/spa delivers.

First-Time Client Retention Rate: The number and percentage of first-time clients serviced in one month that return within 90 days.

• The conversion rate of first-time clients to a second vision is the true acid test on the level of quality your salon/spa delivers.


• First-time client retention rate shows the number and percent of clients added to your existing client data base.

• Existing client retention rate shows the number and percent of existing clients that return within 90 days.


• The number and percent that DO NOT return is your company’s client attrition rate.


• KEY: If your first-time retention rate is not adding enough clients to offset attrition, it’s a major red flag that needs a solution.

1. If First-Time Retention Rate is below 30%: It means that every month, 70% of first-time clients do not return. If your monthly first-time client counts are low (example: 25 or less), you’re not adding clients to your base to grow or to offset attrition. If you’re attracting 75+ first-time clients a month, you’re squandering your growth opportunity.


2. If Existing Client Retention Rate is below 80%: It means that your salon/spa is losing 20% of its monthly client base. Regard this as a wake-up warning. If it goes below 75%, immediate action is required to find the source of the attrition. It is most likely a flaw in your customer service systems — or lack of systems.


3. First-time client is your acid test: The conversion rate of first-time clients to a second visit within 90 days speaks volumes about your salon/spa. Many software systems measure retention based on three or more return visits. That’s a long time to wait to discover that your company is blowing its growth opportunity. FACT: If a first-time client doesn’t return for a second visit — there’s nothing positive to measure.


4. It’s a Quality/Systems/Culture measurement: Both first-time and existing client retention rates are a direct measurement of how effective and consistent your company is operating. The lower the rates, the more leaks and deficiencies exist in your salon/spa. The higher your retention rates, the better and more consistently your company operates.
   
   


5. Pay based on client retention: It doesn’t make sense to pay any service provider a commission or hourly rate on low first-time client retention. Doing so means you’re paying, and enabling, the wrong performance and behavior. First-time client retention rate should be a key factor for any pay advancement.


6. First-time retention rates 50% or higher: A 50% first-time retention rate is good. 60% is excellent. A first-time retention rate of 70% or higher is absolutely impressive. It is impossible for a salon/spa to achieve these high client retention rates without being a systematized, team-based, high trust, high accountability company.


7. This is NOT about “request rate”: Request rate is about individual clientele building. You know, those clienteles and cash flow that leave with the service provider. Client retention rates are about building a company that can take extraordinary care of its clients and employees.