Increasing revenue is critical for every business—large and small. For most, this means finding new ways to attract more customers. But what a lot of businesses don’t realize sooner is signing new customers is usually 5 to 25 times more expensive than retaining your existing customers.
Your best customer is your existing customer. This shouldn’t be surprising, but it begs the question: How are you supposed to increase revenue without spending all your resources on attracting new customers for your beauty salon? The answer? Increase your average transaction value (ATV).
What does the term average transaction value (ATV) mean?
Average transaction value (ATV) is the average dollar amount spent per transaction at your salon, which can consist of services, products, and more. To figure out your salon’s ATV, simply divide your total revenue by the total number of bookings made and attended in the same timeframe. For example, let's say you sold $10,000 worth of hair care and over 60 bookings in a one-month timeframe. Using the equation described above, the average transaction value would be roughly $167.
Knowing your salon's ATV is crucial in determining success and financial metrics, developing marketing strategies, predicting seasonal trends, structuring pricing, and to overall increase sales. Increasing your salon’s average transaction value (ATV) is one of the best strategies to grow your revenue without needing to acquire new customers. By adding more value to your in-salon products and services, you can maximize your profits all while enhancing their overall customer experience.
Here are five proven ways to boost your salon's ATV:
1. Upsell premium services
Upselling is one of the simplest ways to increase AOV. Train your team to offer premium services such as deep-conditioning treatments, scalp massages, or add-ons like a hydrating treatments after coloring services. Clients already trust your expertise, so they’re more likely to indulge in upgrades if the benefits are explained clearly.
For example:
- Offer a Keratin Treatment Add-On with haircuts, color, or styling sessions for clients looking for smoother, shinier hair.
- Introduce tiered pricing for services, such as a “basic” and “premium” blowout, with the latter including extra styling or specialty products.
2. Sell private label products
Retailing beauty products in your salon is a major AOV booster, but selling private-label items takes it a step further. Exclusive, high-quality products branded to your salon's branding create additional revenue while promoting customer loyalty and satisfaction. Want to create hair care products with your salon's logo on them? Click here to build your own private label hair brand.
Blanka makes it easy to launch your private label product line. From hair treatment products, to shampoo and conditioner combos, you can offer products tailored to your clients’ needs, encouraging them to maintain salon-level results at home. Want to know more about private labels? Read our step-by-step guide on how you can create a private label brand for your salon, and this guide on how to Improve salon retail sales to know more.
3. Create service and product bundles
Combining complementary services into bundles encourages clients to spend more. For instance, a “Hair Revival Package” could include a haircut, deep-conditioning treatment, and scalp massage at a slight discount compared to purchasing the services individually. Here are some other ideas for successful salon and spa packages.
Similar bundling can be applied to your private label products. For example, you can create a “Bouncy Curl Kit” with products like Daily Curl Shampoo, Daily Curl Conditioner, Smooth & Sculpt Curl Enhancer, and Bounce Boost Mousse.
Ultimately, bundles add value and make it easier for clients to try new offerings with less risk or pressure. Plus, bundles are ideal for special occasions like weddings or other special occasions, offering customers convenience, premium experience, and perceived value.
4. Incentivize add-on purchases with discounts
Strategic discounts can be a powerful motivator. For example, offering 10% off a deep-conditioner when booked with a haircut or combining both services and products in a promotion like “Curly Queen Treatment + 15% off curly girl [Insert your salon name] products”.
Promotions like “Buy 2, Get 1 Free” for retail items are also great for enticing customers to leave your salon with items that complement the service they most recently received from you.
5. Launch a rewards or membership program
Implementing a rewards program motivates clients to spend more to earn points toward future discounts or exclusive perks. For instance, clients could earn points for every dollar spent, with bonus points for purchasing add-ons or products. You can also use the program to promote specific products or services. For example, double points on private-label skincare or styling tools can boost interest in those items.
On the other hand, a membership program can incentivize your loyal customers to regularly use your products or services by offering members exclusive prices and discounts. Learn everything you need to know about memberships and whether it’s the right move for your salon.
By fostering relationships and targeting customers who already know and trust your brand, you can save money on customer acquisition costs while adding value for your existing customers. This helps to build loyalty and improve your brand’s value proposition, all while enabling your business to improve its profit margins and aids operating cash flow.
Maximize the ATV of your beauty salon while delivering value
Boosting your salon’s average transaction value is about more than just increasing profits—it’s about delivering greater value to your clients. By offering premium services, exclusive branded products, and well-curated bundles, you enhance the customer experience while growing your bottom line as well as building more brand equity for your salon.
Ready to level up your salon’s offerings, along with your ATV?
