Are you taking advantage of the benefits of selling packages – services in bulk – at your beauty salon?
We understand that it’s difficult to get your pricing model right. But, it’s important to do so.
Packages are an effective pricing strategy that can quickly increase your cash flow and revenue. This is true whether you run a hair salon, a nail salon, a tanning salon or any other type of salon.
(The good news is that if you’re already using a scheduling software like Yocale then selling packages is easy to implement.)
A well-known example of the effectiveness of selling packages is with research by Harvard. They found that Nintendo sold 100,000 more units when they packaged their console and game together than when they sold these two products separately. (However, there is a caveat here: you still need to offer products/services separately as well, so keep this in mind).
There’s an entire psychology around why selling services in bulk is such an effective strategy, but a lot of it has to do with value perception. In short, packages are typically priced lower than those services are sold individually, so clients feel like they’re getting a deal (and they are).
This blog post will show you the benefits of selling packages to your clients.
1. More Cash Flow
First and foremost, packages give you an immediate uptick to your cash flow.
While you haven’t yet offered a particular service, you still get to immediately improve your cash flow by selling several services at once.
Here’s a list of other ways that salons can maximize their profits.
2. Generate Loyalty
If you are an appointment-based business, you know how difficult it can be to ensure your clients not only show up but that they also come back on a regular basis.
The great thing about packages is that they incentivize your customers to return again.
This not only improves your cash flow and revenue but also works toward establishing a loyal relationship between the client and your business. The reason is because the customer is likely to see the benefits of receiving your services on a regular basis.
It also gives you more opportunity to establish a relationship because you are seeing him or more more regularly.
Customer loyalty is a beneficial commodity that all businesses need to tap into. We’ve talked on the blog before about the fact that research has shown that loyal customers spend 67% more over time.
Loyal customers are much more likely to generate referrals for your business as well (one of the most powerful types of marketing there is).
3. Opportunities to Upsell and Cross Sell
Every time clients visit your beauty salon is an opportunity to upsell and cross sell. However, the more often a client visits, the greater opportunity you have to upsell or cross sell.
This is especially true as you form more of a relationship with your client. The idea here is that they will be much more likely to trust your recommendations because they have a relationship with you.
So, selling packages is a great way to upsell and cross sell more than you otherwise would.
4. Increase Your Revenue (and Save Money By Combating No-Shows)
Packages not only offer the opportunity to increase your cash flow but your revenue as well.
Packages guarantee that those services were sold, therein increasing your revenue.
However, packages also allow you to save money lost due to no-shows. No-shows are a huge problem for appointment-based businesses. As we’ve said before, the average business loses 26K per year due to no-shows.
With so many things standing in the way of your clients actually making it into your chair, packages incentivize your clients to show up because they have already paid.
But, even if they don’t show up, you are guaranteed not to lose profits because of it.
It’s a win-win.
5. Options for Generating Recurring Revenue
The great thing about packages is that they don’t have to be sold as a one-time bundle. You can also sell packages on a recurring basis with monthly fees. Think of it like a membership. Gyms are no longer the only types of businesses offering memberships.
Many other types of businesses (like salons) are also taking advantage of this model. It not generates recurring revenue but also increases customer loyalty because customers feel like they are a part of a club.
A hair salon, for example, might offer a package of 10 blow drys in a month.
As you can see, this opens up the possibility to generate recurring revenue. With fluctuations in revenue for appointment-based businesses, recurring revenue gives you a steady stream of income you can rely on.
Wrapping It Up
It can be difficult to price your products and services right at your salon.
However, packages are one of the smartest strategies out there.
Not only do packages improve cash flow, but they improve revenue long-term by generating greater opportunities for upselling as well as generating customer loyalty.
Are you already using Yocale’s scheduling software? Here’s how to sell packages.
Do you want more appointment bookings for your beauty salon this year? Yocale is home to the leading scheduling software on the market. Our easy-to-use calendar gives you the extra hand to both run and grow your business at once. Click here to sign up for FREE or learn more. You can also book a personalized demo here.