Do you feel like you were meant to have a kick-ass career as a hairstylist? Like you got into this industry to make big things happen? Maybe you’re struggling to build a solid base and want some stability.
Maybe you know social media is important, but it feels like a waste of time because you aren’t seeing any results. Maybe you’ve already had some amazing success but are craving more.
Maybe you’re ready to truly enjoy the freedom and flexibility this industry has to offer.
Cutting and coloring skills will only get you so far, but to build a lifelong career as a wealthy stylist, it takes business skills and a serious marketing strategy.
When you’re ready to quit just working in your business and start working on it, join us here where we share real success stories from real stylists.
I’m Britt Seva, social media and marketing strategist just for hair stylists, and this is the Thriving Stylist Podcast. What is up and welcome back to Thriving Stylist Podcast.
I’m your host Britt Seva, and today we’re going to talk about how would a salon membership work.
This is a buzzy topic, and this is an episode I could have easily recorded two years ago because people have been asking me about it for a really long time.
If you’ve DMed me about this or if you’ve heard me talk about it elsewhere, I think in Thriving Stylist method we talked about it at some point.
I always said it’s not my favorite, and the reason I haven’t recorded a podcast episode on it before is I’ll just say right at the top of this episode, I don’t think it would be the landslide victory that at the surface it feels like it could be.
I think it’s more trouble than it’s worth.
But if it’s something you want to explore, I want to explain what that would look like, the legalities you would need to keep in mind, what formats I think could potentially work, and what formats I know would not work.
Just so you have all the information, you can decide what you want to do. So if I’ve hesitated for two years on doing this episode, why in the world am I doing it right now?
Well, yesterday I was scrolling as we do, and I saw this video that was going viral from, and I’m going to call this person an influencer, like an influential person, not in our industry, not an industry professional, not an industry educator,
nothing like that. Outside of our industry, but offering advice to salons and stylists, which is one of my favorite tropes, where it’s like somebody who’s clearly never worked in the industry, but like has the best idea of all time.
It was a terrible idea, but this person’s idea was how a salon membership would work. And immediately I was like, well, A, that’s illegal, and B, it wouldn’t function.
But because I could see the virality, and what this person was saying on paper sounded great. Like I was like, oh my gosh, someone’s going to hear this role with it and get themselves into trouble.
So we don’t even need to unpack what that person’s idea was. I’m sure their video will cross your feet at some point.
I want to talk about what could work, what legally you have to be aware of, and just some things to keep in mind if you are going to consider doing a membership in your salon.
2:50
Membership Benefits
So, why would somebody consider doing a salon membership? There’s three primary benefits to having a membership.
One, recurring revenue is the thing that people are most excited about, where it’s the idea of every single month or every single quarter, depending on what your billing period is, revenue would come in.
What I will say is the consistency of that revenue is not what it’s made out to be, but we will explore that in just a moment.
But the idea of recurring revenue, where it’s like the money is going to come in, you don’t have to always be chasing it, it does sound nice. I get it. Two, the idea of improved retention.
If somebody is on a membership model, you don’t have to wonder if they’re going to come to their next appointment, they’re locked into a membership. So of course, they’re coming. Number three is the consistency of business.
One of the hardest things about our industry is it does feel cyclical.
We have good months and bad months and good seasons and bad seasons, and if a membership were to truly provide consistent recurring revenue and improve retention, it feels like it takes care of itself.
Wouldn’t it be great if you could just show up, do good hair, you get the paycheck, and then you leave and you don’t have to worry about anything else? It feels lighter, it sounds lighter, it seems like it solves a lot of issues.
Attract a client one time, get them to invest one time, and just serve. It does on paper, it sounds amazing, I completely get it.
4:12
Membership Models
So when does a membership work? Because there’s very successful membership models.
I like to look at other service-based industries when we’re talking about anything related to our industry, and probably the most commonly referred to membership model would be like a gym.
You have a gym membership, we worry about getting locked into the gym membership.
I think back to the old, if you’re like me and you love the show Friends, there’s an iconic Friends episode where Chandler is locked into the gym, and he can’t get rid of his gym membership, and he’s scared to call the gym, so he just decides he’s
going to cancel his whole bank account because he’s so locked into the gym, and it’s like the gym membership thing is probably the most iconic form of membership that we think of, but it’s not the only one. I also think of places like spas, like
Massage Envy is a chain that famously offers memberships, but where I live in the Bay Area, there’s a very upscale spa called Burke Williams, and they have locations all over the place. There’s a ton in California, and I think some in other states as
well. They have a very high-end membership, where for hundreds of dollars a month, thousands of dollars a year, you can get a massage every month, and I think use of their spa facilities or something like that.
There’s certain perks, and every single month, you’re getting guaranteed a massage. That’s a popular membership model as well, like Spa and Wellness Services.
A membership that I was a huge fan of, like when I think about memberships I was a part of, I definitely did the gym membership thing.
But there was a time where I was really into spray tans, and there was a great tanning place right between where I worked, where I was at the salon and my home, and I could leave the salon and just pop in and get my spray tan and head home.
And they had a membership, and I want to say I was paying like, it’s embarrassing to think about now, but I think I was paying like $1.30 a month, and I was getting spray tans like all the time.
And it was unlimited spray tans, and I could just pay, instead of paying like $24 a spray, I could get as many as I wanted for $1.30 a month, and it was super convenient for me. Things like that are all common membership types.
So when I talk about gym memberships and spa memberships and my little spray tan membership and things like that, there are certain things that those type of businesses have in common.
All of those businesses run on volume in a way that the average stylist does not. When I have a gym membership and I’m going to run on the treadmill, it doesn’t require a person to serve me. I’m just going to go in, a treadmill is open or it’s not.
I run or I don’t. If a treadmill is not open, I hit the bike. If a bike is not available, I lift some weights.
I figure it out. It’s not contingent on a person. It’s just an opportunity.
Same with the spray tan membership. It wasn’t like a personalized tan. It was like going into a machine.
So sometimes I had to get there and wait 45 minutes for the machine to open up, but sure enough, I could go in, I didn’t have to pay any extra. I got my spray tan and I left.
When you look at even like the spa or massage membership, the key there is you’re not guaranteed a specific service provider.
Yeah, you can get the massage every single month or the facial every single month, whatever your membership is for, but there’s no guarantee that your desired time is going to be available.
There’s no guarantee you’re going to be able to see the person that you love to see so much because they might be booked and busy with somebody else. So all of these memberships work on extreme volume.
Candidly, most of these memberships also hope that the people who are paying for them are not going to take advantage of the services.
If I’m being like totally blunt and honest, the Tanning Membership Place hopes that I pay the $1.30 a month or whatever it was, and only show up twice. So they’re actually making more money off me, and there’s plenty of people who do that.
You’ve probably done that before. Maybe it wasn’t Tanning, but it was something else. You pay for the membership, you don’t even use it.
How many of you are subscribed to TV services? I think about it. We’re subscribed to Peacock, Hulu, Netflix, whatever.
I’m certain there are months that we never log in to Hulu. But we pay for it, and that’s what Hulu wants, is for you to be a part of the service, but not even taking advantage of the service.
Even the massage thing, when somebody’s on vacation, they might not be able to get their massage for the month. So how does that work? Well, I’m gonna tell you the nuances and the details of how those things work.
So the massage one operates differently than the spray tan one and the gym membership one, and I want to unpack all of that with you. So a fact about memberships in general.
Memberships have, every single membership has something called churn, C-H-U-R-N, or attrition. You can use either word, they mean the same thing.
But it means how many members will start the month as a member but then cancel before making it to the end of 30 days.
So any membership you look at has attrition every single month or churn every single month, meaning you do not retain every single member you started the month with.
So in order to sustain the membership, you need to be doing what I call filling the tank. There needs to be new members joining every single month to make up for the members that have left.
When you look at average membership retention across any membership, the churn rate is 30% over the course of a year. So one third of people who start your membership will have quit before the year is over.
When you look at average membership participation for a high interest membership, the average member stays a member for three years.
And that last piece is the piece that’s interesting is you’re like, well, I mean, that’s great because that’s the retention. I want someone to be a client of mine for three years. Totally get it.
And that’s the metric that we’re chasing. What we have to understand is two of the three people who join will be on that journey. One of the three people won’t even make it to the end of the first year.
So some people will. The average member will. Some won’t.
Some will make it longer. But you’re playing a numbers and a volume game. Looking at attrition statistics, around half of new members quit within the first six months.
So when I gave you that statistic of one-third of members will cancel their membership within a year, it doesn’t mean they’ll stay for one year and then cancel. Fifty percent quit within the first six months.
So a certain percentage of those quit within 30 days. There’s constant attrition happening. So with that, something you would have to know if you were going to enter into the membership game is the marketing game.
Marketing a membership is challenging because you’re trying to convince somebody to be paying either one big lump sum up front or consistent payments on something that they may or may not be consistently using. It can be a really tough sell.
So just keep in mind that yes, you can get recurring revenue. Yes, there’s the idea of improved retention, but consistently refilling the tank is a key part of that consistent revenue if you’re going to do it.
Something else that’s misunderstood about memberships is they are deeply legally protected. More now than ever. So going back to that Friends episode I was talking about, Chandler couldn’t quit the gym.
He was like, I want to quit the gym, I want to quit the gym, and no one would let him quit. He was locked into this contract and he couldn’t get out of it.
So much so that he decided he was going to close his bank account so that they could not continue to auto charge him. It was like that level of desperation of, this is the only way I’m going to quit the gym.
The reason it was made into a sitcom episode is because it’s so over the top. It was so relatable, it was so ridiculous, that it made for a good TV episode. Well, you can’t do that now.
That’s legally not allowed. That would never work. And there’s a lot of consumer protection laws in place around memberships.
And particularly this video that I saw this influencer showing was eliminating all of those things. And I was like, I don’t think this person’s ever had a membership and they’re not aware of the reasons why what they’re suggesting would never work.
You have to comply in full with whatever your state and whatever federally is required. So there’s several states, I think there’s about 15 of them who are the most deeply regulated when it comes to membership.
And then there’s some federal guidelines in place. So most states at this point say that if you are going to have people sign up for a membership online, they also have to be able to cancel online as easy as it was to sign up.
So for example, if you’re like, yeah, people can enroll in my membership and they are going to pay through my payment link online or something like that.
And they fill in their information and then they agree to your terms, which you have to have terms and agreements on what they’re going to be signing up for in this membership. And then they click to pay. That’s great.
They also need to be able to go on to your membership site at any time. So go on to www.sanfranciscohairstylist.com, whatever your website is.
There needs to be a membership page and an option for them to cancel at any time without having to call you, without having to email you, telling you a sad story, fill out a questionnaire. They have to be able to cancel as easily as they signed up.
So that’s a piece that’s misunderstood. So with that, knowing that people can be canceling without emailing you, you’ll just have to stay up on it. You’ll need to set up something so that if somebody does cancel, you get a notification.
When you get that notification, there will be administrative things on the back end that you need to do. Depending on how logistically you’ve set it up, maybe in your booking system, people who invested in the membership are flagged a certain way.
They have a certain emoji next to their name or whatever. You’ve noted them as membership members one way or another. Often, manually withdrawing them from that membership is something that would have to be done by hand.
So you would need a notification system so that when somebody does choose to churn, you’re pulling them out so they’re no longer getting access to those benefits.
Okay, so you would want to have a system that would alert you every time somebody cancels. It has to be very easy for a member to cancel on their own if they so choose to.
And then you would need to have an administrative system for pulling them out of receipt of those benefits.
Now certain states, California being one of them, and like I said, I think there’s 13 or 15 others, you have to notify somebody with annual reminders before a billing period happens, and there’s a certain amount you have to send and a certain
frequency at which you have to send them if you are going to auto bill. So every state requires it differently. Some states are like 30 days before billing and then 14 days before billing.
Some say you need to do it twice within 10 days before billing. But every state has different requirements for notification.
So you would have to have communication set up in the back end of your membership to make sure that those auto draw or auto charge billing cycles are coming up. And again, giving the person the opportunity to self cancel if they choose.
Next, you want to make sure that you have a legally binding membership agreement. This is 1000% something I would have an attorney draft for you. Because memberships are so legally regulated, it should outline the terms of service.
What happens if somebody is not able to redeem their service for whatever period of time, what it would look like to pause the membership, what it would look like to cancel early, what happens if somebody’s billing fails, all of those things need to
be outlined and you cannot just make them up. They have to be in compliance with whatever is legally allowed federally and within your state. So you would need to have that detailed. Also talking about service interruptions.
So if you are a salon space that closes down, a lot of salons close the last week and a half of December into the first week of January, you have to have things like that noted.
So you have to be really organized with the systems and structure of your business, and then those things have to be noted within the contract and somebody has to agree that, yes, I understand all of these things and I still want to join the
membership. membership.
16:02
Salon Membership Types
Okay. So let’s say you’ve heard all of this and you’re like, this is fine, I could do all of this and I still want to do it. What kind of membership would work for a hair salon?
So here’s something that I’ve learned about membership. A membership will not convince somebody to do something they don’t already want to do.
So there was somebody recently who was asking me like, hey, I really want to start a styling membership, like I have a few clients who come in and get weekly styles, I want to get more clients coming in to get weekly styles, I like doing these on
Fridays, it’s a really nice way to wind down my week, how do I get more of them? And I was like, okay, so tell me about how many clients get these blowouts. And it was like, you know, three clients weekly.
And I was like, great, so what would be ideal? Well, 10 clients weekly, or maybe more than that. I said, okay, so you’re looking to triple the blow dry clientele.
How would you convince somebody that they need a weekly blowout? And then it was like a little bit like crickets, like that’s the piece you have to overcome.
If you’re trying to convince somebody to do something they don’t already want to do, it will be an extremely tough sell. So going back to the gym membership, most of us listening to this podcast have joined a gym or tried a fitness routine.
At the time you’re doing that, you’re like, something’s got to change. I got to get in shape. I want to change my lifestyle.
I want to get heart healthy, whatever it is. You have decided you want to make a change. You didn’t drive by a gym and you’re like, I love that beautiful gym.
I want to spend more time there. Then you walk in and they convince you that that should be your Friday night hangout. That didn’t happen.
You were feeling enough pain or enough pressure or enough whatever, that you wanted to get your booty cheeks into the gym. So you did it. The desire was there.
That’s key. Same for me with the tanning membership. I was already deciding I wanted to be bronzed for whatever reason.
Must have been a Jersey Shore time or something, I don’t know. But I had already decided I wanted to do that. The habit and the desire for me was already there.
So when they said, hey, you’re coming in frequently, you can actually save money and increase your tans by doing this, it was a no-brainer. I already had the habit and the interest and the desire.
When you look at something like a massage membership, a lot of us are like, I would love to do a monthly massage. I have one girlfriend who does a monthly massage. And for her, it’s part of her self-care routine.
And she’s like, it keeps me sane. It’s my me time. It is absolutely luxurious, but it’s something that’s really important to me and something that we budget for it.
That’s great. She was already doing frequent massages, so when she’s offered a membership, it’s a no-brainer.
If you’re somebody who got a gift certificate for a massage one time, selling you on a monthly massage membership, it’s probably going to be challenging.
So whatever membership you are trying to sell, it needs to be hitting a natural and existing desire. So when I think about what that would be in a salon, for me, it comes down to two things. Root touch-ups and haircuts.
For me, I think if you were to do something like a foiling membership, I think it’s too labor-intensive and too time-consuming. I don’t think it would make sense.
I also think with like blonding trends right now, somebody wanting to come in and getting like foils put in monthly, it’s much more rare. And because a membership requires volume, I don’t see it working.
The other thing that could be interesting is some sort of like extension touch-up membership. So for me, I have k-tips. And with k-tips, you know, I’m losing them here and there in between my installs.
And so, you know, my stylist even said like, hey, if you ever want to do like do a little filler, you’ve lost a few too many pieces, let me know.
That could be an interesting membership too, where it’s like you pay for an extension membership for the year, and it includes, you know, touch-ups in between or something like that. That has some potential and some legs too.
But the things that I think of that I think would be most effective would be root retouches and haircuts. I think back to my mother-in-law, she was like 90% white, not even gray. At a week and a half, she was like, how soon can you do my roots?
And I was like, not today. I can’t hardly even see it. But it was already making her bonkers.
She was like the every two and a half, three week root touch-up and she couldn’t stand it at that point. Somebody like that could be very interesting for a root touch-up membership. Also, haircuts, particularly barbering cuts and precision cuts.
A cut and a shave, a neck trim. Those are things that you could do at scale and for a membership.
20:22
Operational Logistics
Okay, so then let’s go to logistics and how you’d pull it off. Here’s where it gets tricky with memberships, is you have to be able to fulfill on what you promised, which is why gym memberships work great and why the tanning membership works great.
Going back to that massage membership, I’m certain they vary state to state. The massage membership that I had looked into, I didn’t pull the trigger on it, but I had looked into was, I was going to be billed monthly.
If I could not get in for the month or chose not to redeem for the month, that investment was saved as a credit that I could be used to the future. So it was almost like I was paying into this bank month over month over month.
Then when I canceled, I didn’t join, but when I had canceled the membership, that credit and that bank was still living there for me. The reason it had to be that way is because it couldn’t be a use it or lose it.
That’s generally not going to work in a service-based industry, where it’s an exchange of a personal service being done.
Use it or lose it doesn’t work, so you can’t say like, oh, you’re entitled to unlimited root touch-ups in June, but if you don’t come and get any, too bad. You’d have to talk to your attorney about something like that.
Instead, with the massage membership, it was like you’re entitled to one a month. If you don’t use it, you can accrue it and use it to the future. So what I would assume, again, you’d have to talk to an attorney about this.
If you were to do like a root retouch membership, you might say this entitles you to two root touch-ups every single month. If for one month you don’t use it, it rolls over.
With that, you would have to be taking into account how many touch-ups were used and how many weren’t, and then making sure that there was a redemption available for somebody who didn’t use them all within the allotted amount of time.
With the haircut membership, maybe you’re going to say, it’s unlimited. You can kind of like the tanning membership. You’re like, it’s unlimited.
The only way you could likely pull that off is if you had people who were not booked and busy, and maybe you could do that for a root retouch membership, and that’s where this gets interesting.
I think salons where you’re trying to build up new talent, if you had reasonably priced root retouch memberships or haircut memberships, I think it could be interesting. The key being, you can’t guarantee somebody is going to see the same person.
It’s not something that’s going to necessarily build somebody’s clientele. You would essentially be building this book of business where they are just frequent flyers.
They’re coming in to see whoever they want to get in, they want to get out, they want to get in with frequency. You can’t get irritated by them.
Like if Sam decides to come in for a haircut every single week, you can’t be like, he’s really taking advantage of this membership. Well, yeah, that’s what you created for Sam.
And if it’s not going to be unlimited, then you have to have a system in a way to be tracking who’s using their allotted haircuts, when there needs to be a rollover. So that goes back to understanding the legalities of what you’re putting together.
In my research, which I did not research all 50 states, I could not find a use it or lose it membership in the service industry that was legally allowable.
So I could not find an example of, if you don’t use your tint for the month you just lose it, it’s more like creating a financial bank.
When you’re creating a financial bank, you basically want those membership payments to go into a secondary bank account, and you’re withdrawing off of them when they’re redeemed so that you don’t end up underwater with redemptions and payouts to
stylists that you can’t afford if you’re a commission-based stylist in particular. So if you want to consider doing a membership, I hope I’ve given you some food for thought. I don’t think they’re all bad.
I think that there’s potential, particularly for those of you who are looking to build up newer stylists. I think they’re incredibly complicated. I think they’re deeply misunderstood.
I think memberships work better when it’s less of a one-to-one service, because logistically it just becomes feasible and possible.
When you look at memberships that are thriving, like a gym membership, the running joke is once February 1st hits, the gym is 90% empty.
Like people join the gym at the end of December, beginning of January, New Year’s Resolution, everybody’s so excited to, you know, hit the spin class, and then one month later, they’ve quit the gym.
Gyms don’t operate well when they have thousands and thousands of members. They only work when hundreds and hundreds of members are not showing up.
That’s what allows the gym to be profitable without turning people away and not having machines that work. In a hair salon, you’re not going to have thousands of people paying for root touch-ups and not coming in to receive them.
And that’s just something that is a nuance to the membership that you have to really keep in mind. Because it’s such a trading time for dollars type of membership, making sure that you can physically and feasibly do it is really important.
I hope this has gotten your wheels turning. If you decide to pull the trigger on the membership, please let me know. I’d love to know how it goes for you and what comes together.
As I always say, so much love, happy business building. I’ll see you on the next one.
