Speak to any Nail Tech and they will tell you that word of mouth marketing is the best, most effective method of marketing your Nail Business. The problem is, when most Nail Techs talk about word of mouth marketing, they don’t really know what it means, or how to do it.
When I visit Salons, I always ask the Owner how she markets her business. Nine times out of ten, the Owner tells me that her number one marketing strategy is “word of mouth marketing.” But, when I probe and ask more questions about their word of mouth marketing, I quickly discover that most Nail Tech’s really don’t have any type of referral or word of mouth marketing strategy whatsoever.
When Nail Tech’s tell me that they market via word of mouth, what this usually means is, “I am really not sure, but I hope that my customers randomly talk to their friends about my nails.”
In other words, their marketing strategy is nothing more than a hope and a prayer. They can’t count, measure or control it.
So how do you implement a word of mouth marketing campaign, one that you control, one that actually gets you a flood of new appointment and puts money in your bank account?
If you have an accurate customer database and you can identify a list of your best, most loyal or most frequent customers then you can quickly and easily implement a word of mouth marketing program – and the good news is, it will literally cost you next to nothing!
Television or Tell-A-Woman?
We all know that people talk to each other. They say that if you want a message spread, don’t put it on Television, rather tell-a-woman.” And, we all know that “word of mouth” marketing does work.
Another name for a word of mouth marketing campaign is a referral system. Let me explain why this referral system works so well.
Think about the last time you saw an awesome movie or had a great meal at a new restaurant. What did you automatically do the next day? You told people about it!
Why did you do that?
The movie theatre never asked you to - the restaurant never paid you to do it? You did it because you like helping your friends. It is human nature! The truth is, consumers always feel more confident purchasing a product or service because a trusted friend recommended it. So, if someone that we know and trust bought the service and loved it, why wouldn’t we? In short, referral marketing minimizes consumer risk and exponentially increases sales.
So how can my Nail Business set up a word of mouth marketing campaign that quickly and easily boosts sales?
The first thing you have to do is examine your customer database and identify “average Rand value of a client.” Here’s how you do it.
Let’s use the example of a typical neighborhood Nail Business that does gel nails, acrylic nails, mani’s and pedi’s where the average transaction value is R400. As a Business Owner, you might discover that on the top end, your best customers spend R800 per sale but on the bottom end some customers only spend R200 when they visit your Nail Bar. For this example, let’s say that the average Rand value per purchase is R400. Now stop for a minute and think about how much a customer is worth to you. How many times do they come back within a year? If they come back once a month, that customer is worth R4800 per year to you. (R400 per transaction x 12 visits per year = R4800)
To work out the average Rand value of a client in your Nail Bar is very simple. All you need to do is calculate the number of active customers on your database, and divide your turnover by this number. For the purpose of this exercise, let’s be conservative and assume that the average value of a client is not R4800, but R3000.
How much extra business can your clients send to my Nail Bar?
Based on the above example, we know that with an average Rand value for each client in our Nail Business is R3000. If a client refers and sends us:
- 5 new clients = R15 000 turnover.
- 8 new clients = R24 000 turnover.
- 10 new clients = R30 000 turnover.
- 12 new clients = R36 000 turnover.
Let’s estimate the profit margin to be 50% (you’ll have to work this out based on your own unique products and services, simply ask your accountant or Magnetic for some assistance.) This means if someone sends your business 12 clients you are making R18 000 in profit from that one client alone. (50% of R36 000)
How do I get my clients to refer their friends, family and work colleagues to my Salon?
It is quick and easy - all you need are three things;
- A sales script that you and your staff can use to promote the referral program. The script simply educates your loyal customers on the benefits that wait for them if they give pre-created gift vouchers out to their friends, family and work colleagues. The script also explains the value of free treatments. Who is going to say no to thousands of Rands worth of free nails?
- A pre-made sales letter for the client to take home that explains the referral program and highlights the benefits in great detail.
- A booklet of 10 – 15 special offer certificates for your client to give to her friends, family members or colleagues at work. This makes it easy for them to “sell” your business and treatments to their friends. Your clients give a valuable special offer certificate to their friends and they get rewarded for it when their friends book in. You now have the best sales force possible working for you. A sales force of satisfied loyal customers and you don’t have to pay them a single Rand. They only get rewarded once the referrals (sales) come in so there is no risk to you!
How do I reward my clients for sending me new business?
You offer them your services for FREE based on how many people they send you. For instance, if in the above example, if one client sends you 12 referrals you are making R18 000 in profit with a 50% margin. So why not offer your customer free nails, mani’s or pedi’s for the year valued at up to R2000 if they send you 12 new customers. Total cost to you @ 50% profit margin = R1000. Total Profit = R17 000. Your risk = ZERO! If your clients send you 4, 8, or 12 new customers you structure benefits for each level.
How do you track results?
Just stamp each certificate in the booklet with a number and your customer's name. When the gift certificates come in from their friends, call your clients and thank them. Using email, sms or WhatsApp to let them know about their bonuses. This will keep them active and increase their motivation.
What’s the Potential of a Word of Mouth Marketing Campaign?
Let’s use the above example if your Nail Business has 100 customers coming in every month. (That’s only 3 clients per day!) If just 20% of people were to refer one new customer to their business with an average lifetime value of R3000, your Nail Business has created 20 new customers with a value of R3000 each = R60 000 extra in turnover = R45 000 in profit. Not a bad effort for handing out a few letters and printing some gift vouchers. But here’s the good news - because every customer has been referred, they are more likely to be better quality customers than those coming from advertising in the newspaper.
There's even more
If you enjoyed this practical marketing advice and you want to learn even more, then you should seriously consider investig in yourself and the future success of your Nail Business by attending Magnetic's Marketing Workshop - "The Nail Tech's step by step guide to finding clients, getting your diary full and earning R1000 profit per day." You will learn everything you need to know about marketing your Nail Business, plus you will get access to ready-made marketing tools that work. Plus the course comes with a 100% money back guarantee. Take a look at what this workshop did for Carmen from Nail Candi,
Magnetic Nail Academy has the widest range of products and the friendliest staff who are more than willing to help in any way possible. The Marketing Course has taught me so much and by using the tools and Knowledge that Magnetic has shared with us has helped me double my client base.
Thank you Magnetic for caring for us little guys. It means the world to me