After launching, you must do one thing to stay in business: constantly seek ways to increase salon or spa revenue. 

There’s no way around it!

For one, you have to deal with ongoing competition and economic downturns. On top of that, you must fulfil your increasing recurring expenses like renewing your rent, paying salaries, training employees, replacing or updating equipment, financing relevant subscriptions, and stocking up on products, among other things. 

Making just as much as you did three months ago may not be enough to keep you in business today. You must increase revenue to enable you to grow your business. 

In this article, I’ll share 10 practical tips you can use to increase your salon or spa revenue, from improving customer retention to cutting unnecessary expenses. 

How to increase salon and spa revenue [10 practical tips]

Tip 1: Know your numbers

This is the first step to increasing salon and spa revenue. You can’t improve what you don’t know. So, avoid diving into revenue growth endeavours blindly. 

Building a financially secure salon or spa starts with knowing where you stand number-wise. This exercise goes beyond just checking your bank balance; it’s a deep dive into the financial health of your business.

Among others, your analysis should answer basic questions such as: 

• Which service brings in the most money? 
• What’s the best-selling product? 
• Where does the buck of your expenses go? 
• How much does the average customer spend? 
• What’s the customer retention rate? 
• What are the average product sales per visit?

These metrics will serve as your financial GPS, guiding you towards areas of your business that need improvement and have revenue growth potential. 

Our all-in-one salon and spa management, Splice, has an insight and reporting feature that’ll provide you with these important business data and more at a glance. 

You can use the information from your analysis to set Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) financial goals for your business.  

Tip 2: Reduce expenses

If you’ve executed the first tip in this article, you already know where your money goes. This also tells you which expenses to cut back on or eliminate. 

It may be time to: 

• Cut out the middlemen and deal directly with manufacturers, renegotiate terms with your supplier, or get a new, better deal with another. 
• Switch to energy-efficient appliances to save on utility bills. 
• Track inventory to avoid overstocking or running out.
• Consider part-time or freelance staff to reduce full-time payroll costs.
• Cross-train employees to take on multiple roles.
• Use salon management software like Splice to streamline appointments and customer management, reducing the need for more administrative personnel.
• Automate reminders and follow-ups to reduce no-shows and last-minute cancellations.

Beyond just cutting costs, this approach frees up valuable resources you can reallocate to revenue-boosting activities.

Tip 3: Get more customers

Customers are the backbone of any business, including yours. Without them, your salon or spa will cease to exist. 

So, a major focus of your business must be to get as many customers as possible. The more customers you acquire, the more revenue you generate.  

Here are a few ways to attract new customers: 

• Offer discounts to first-time customers. This will convince potential customers to patronise your business. 
• Encourage word-of-mouth marketing. People tend to listen to other people more than businesses. Reward existing customers for referrals. 
• Promote your salon on multiple channels. This includes social media platforms, websites, Google Business Profile, email marketing, brand partnerships, flyers, banners, and signboards. 
• Invest in paid advertising. Pay to advertise your salon or spa online (social media ads, Google ads, influencer marketing, etc.) and offline (radio, television, newspapers, magazines, billboards, etc.)

See our previous article to learn more about building a clientele for your beauty business. 

Tip 4: Improve customer retention

Customer retention describes how many customers return to do business with you after their initial patronage. 

As a beauty business, getting customers to visit your establishment is the first step. Ultimately, you must get them to keep returning, time after time. 

Customer retention is crucial for multiple reasons: 

1. It’ll cost you significantly more to acquire new customers than to retain existing ones.
2. As small as a 5℅ increase in customer retention can boost profit by up to 95℅. 
3. On average, returning customers spend 67% more than first-time clients. 
4. Returning customers tend to refer other people over time.   

Here are a few practical ways to increase customer retention: 

• Give customers what they want. Beauty clients tend to return to businesses that meet or exceed their expectations. 
• Offer excellent customer service. Customers are more likely to return if they have a good experience at your salon or spa. 
• Build customer trust. The more they trust you, the more money they spend on your business.
• Set up a loyalty program. If you reward customers with free products, discounted services, or cashback, you give them reasons to continue patronising you. 

For more on driving customer retention, see our comprehensive guide. 

Tip 5: Increase customer visits

Another effective way to boost your business revenue is to increase the rate at which each customer visits your salon or spa. 

Look at this: 

If a client returns every two weeks to get a haircut, rather than once monthly, you’ll get twice as much business. That means more money. 

Here are a few ways to pull this off: 

• Train your staff to encourage customers to come in for treatment more often. 
• Pre-book your customer for their next appointment during their visits. 
• Offer a discount with an expiration date. 
• Send customers regular SMS and emails with special offers, packages, and updates.  
• Introduce complementary services like scalp massages or styling lessons.
• Keep your establishment clean, tidy, and aesthetically pleasing. 

Tip 6: Upsell and cross-sell customers

Upselling and cross-selling products and services to clients during their visits is a great way to boost sales and increase revenue. 

Upselling entails encouraging customers to purchase an upgrade or the premium option of their desired services. For example, if your customer comes to your spa for a regular massage session, upselling would mean advising them that going for the premium massage session gives more value for their money.

On the other hand, cross-selling describes inviting customers to buy anything in addition to the primary choice. For example, if your customer visits your nail salon for a manicure and pedicure, cross-selling would encourage them to add nail art to spruce things up. 

Here’s how you can increase revenue by upselling and cross-selling customers:

• Train your staff. Ensure your employees know all your products and services and suggest them to clients.
• Educate your clients. Don’t just tell customers to spend more money without reason, they most likely won’t. But if you explain how your suggested products or services benefit them, they’ll open their purses. 
• Showcase your products. It’s easier to encourage someone to add something to their cart if they can see and interact with it. Offer them free samples or demos to convince them to try them.

See our previous article on how to upsell beauty customers. 

Tip 7: Take care of your staff

Don’t neglect your employees as you focus on getting more money from your customers. Successful beauty businesses know how to do both because they understand that one can’t happen without the other. 

Employees most likely spend more time with your clients than you do. So, if you plan to increase your revenue, you must prioritise the well-being of the people who will make it possible. 

If you’re wondering how to make this happen, here you go: 

• Create a positive work culture. What do employees benefit when they work for you? Do you compensate fairly? Are you transparent with them? 
• Acknowledge their input. Let your team know how much you appreciate it whenever they achieve something (e.g., land a high-value client, close significant sales in a quarter, complete a demanding project, or volunteer for a task).
• Reward them. Offer them time off, bonuses, employee discounts, or free products and services.
• Provide growth opportunities. Train them on new techniques and equipment or software. Promote them. 
• Give them more flexibility. Although they work for you, they have a life outside of work. Encourage them to enjoy it. Design their schedule to give them enough time to do non-work stuff. Splice can help you manage your staff’s schedule easily. 

Tip 8: Offer new products and services

The more products and services you offer, the more reasons potential and existing clients will have to visit your salon or spa to spend money. 

Think about it like this: 

Say you run a barbing salon that offers everything but make or maintain dreads; you’ll lose all potential customers who want dreads locks or want theirs taken care of. 

But if you added the service to your service list, with the complementary hair care products, you’d get more customers, which means more money.  

Look at your current product and service offerings and see if there might be a way for you to expand them. 

Tip 9: Review your price list

Sometimes, the easiest way to increase your salon or spa revenue is to review your current prices. Go through your current price list diligently and see if there are any areas where you can make some adjustments. 

You may need to increase the cost of some products or services to offset your expenses and stay in business. Or offer a discount on a line of products or services to attract more customers and compete effectively. 

A good place to start is by comparing your current prices with other salons or spas in the area. You might find you’re not charging enough for a certain service or overcharging for another. 

Now, you may not change your prices eventually, but you’ll know how it might be affecting the way your target market interacts with your business and the implications for your revenue.

Tip 10: Ask and utilise customer feedback

Your existing clients can be a great source of information. You’re leaving money on the table by not asking for their opinions or using their feedback to improve your business operations. 

Customers know what they want more than you do. Listen to them, and you might get some ideas on how to increase salon or spa revenue. 

For example, they might disclose that they’d come more often if it were easier to book an appointment online anytime, anywhere. Or tell you about the trendy new look all their friends are rocking, tempting them to consider your competitors. 

You never know what you’ll learn if you listen to your customers. For how to ask for customer feedback, check out our extensive article on the topic. 

Conclusion

You must generate revenue and stay profitable as long as your business exists. The practical tips in this article will help you increase your salon and spa revenue and ultimately grow your business. 

As you continue to explore ways to increase your salon and spa revenue, let Splice management software help you.