I get a haircut about once every three weeks. And according to my barber / stylist that’s about average for guys. For many years I have encouraged my various barbers to encourage more frequent visits in exchange for a discount. Here are the numbers:

• Haircut for $20 (regular price) X 17.33 visits per years (once every three weeks) = $347 gross revenue
• Haircut for $15 (discounted) X 26 visits per year (once every two weeks) = $390 gross revenue
• In this case, a 25% service discount turns into a 12% growth in annual revenue.
• A discount of only $3 would turn into a 27% revenue growth.
• A shop owner needs to experiment with discounts vs. return rate to find the perfect balance for his customer base.

How to do it:

Customer John visits the shop and gets his haircut. When he’s all done, Barber Sam gives a Come Back Soon Savings Card to Customer John and says, “John, thanks for choosing my shop. I really do appreciate your business. If you’ll come back and see me within two weeks, you’ll save $5. I hope to see you soon.” The card shows a hand-written expiration date for exactly two weeks from today. Barber Sam simply writes up a bunch of cards each morning when he opens the shop.

I’ve seen this technique practiced only once… last week at a car wash. The receipt / coupon offered $2 off for returning within a week. That’s a good start. It will be more successful when the car wash attendant TELLS the customer about the special and invites her to return within 7 days for a big savings.

Your thoughts?