FuelNet presents a case study on how one smart growing business improved its customer retention and acquisition efforts through a recognition and rewards program for both staff and customers.

PROBLEM: Salon owner LeeAnne Sullivan doesn’t sell necessities, and her services come with a premium price tag. A deep recession isn’t the best time to be running a business whose stock-in-trade is pampering, so Sullivan needs customer acquisition and retention strategies for Cosmetique, her salon in Hyannis, Mass. She also knows she needs ways to reinforce the value implicit in her services and, at the same time, hold onto her highly skilled staff, who inspire a personal following and customer loyalty.

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SOLUTION: As part of the company’s customer retention strategy, Sullivan settled on a combination of recognition and rewards for both staff and customers. “It’s not a new strategy, but it’s a forgotten strategy,” she says. Good service has been around for years, but Sullivan has made it part of her culture as a way of building customer loyalty for a brand. Her staff mastered the basics — the salon is known for cleanliness and keeping appointments on time. Sullivan implemented further measures for building customer loyalty, like a personal welcome and an extensive beverage choice. Then there’s the follow-up. “I call every new customer within a few days of her first visit,” says Sullivan. “We remember birthdays, and we recognize our loyal clients with thank-you notes and discounts.”

But those discounts are selective. “Challenging times don’t mean we should institute markdowns or a fire sale,” Sullivan says. Holding firm on prices, she believes, communicates the intrinsic value of what you are offering while protecting the bottom line. “And in challenging times, people will still buy the services, but they want a lot of value where they put their dollar.” Also crucial are the customer relationships that the staff professionals develop. “I continually recognize and reward my staff,” Sullivan adds. “They know how important they are. I actually have a waiting list of people wanting to work here.”

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