Loyalty Pricing... What do you think?

I am wondering whether anyone has tried a loyalty pricing model for their clients?

The reason I am thinking of something like this is I have noticed that it always takes that little bit longer to complete the groom on dogs that don't book regularly in the diary for next time at the completion of their groom and often you are setting in a hair cut on a dog that hasn't been clipped in 3 months, 6months, 12 months etc. Of course if these dogs are matted I would charge more for the matts but there are a percentage of clients that ring every 3-4 months, that bath the dog themselves in between so the dog is not matted but these dogs still seem to have a lot of work involved in their groom and of course are not as well behaved as the dogs that get clipped more regularly.

I thought at first I would get quicker but it seems to be taking time to get the speed on dogs that I don't do regularly. The ones I do regularly I can usually turn over 15-30 minutes quicker. And surely the regular customers that go in the diary every month and keep their appointments deserve a reward right?

So I am wondering whether a pricing model like the following might be good:

Existing clients that book in the diary every month have no change.

For future calls (say from 1st Jan) I quote $5 higher for full body clipping (works) for new clients. If they become a regular client I can explain that they get a loyalty discount of $5 for booking their groom in the diary for next time on the condition that they keep the appointment (I thought of this to deter people from simply making appointments to get the option of the cheaper price  then cancelling/rescheduling them if it doesn't suit just before the day).
This would also be an incentive to maybe get some of those people "off the fence" that simply want to ring every 3 months (and of course forget and it goes that little bit longer).

Has anyone else tried this?

Can anyone suggest any potential flaws with this model I haven't thought of?

Do you think it would deter new business? Even with the $5 increase I would be the same as the majority of other mobile providers in my area. At the moment I am $5 underpriced and I did this because at the start of this year I was a new business. And in all fairness I am the only provider in my area that will do an appointment after 5pm (I finish as late as 9pm some nights). I didn't know whether the after hours thing would take off but it seems many people are happy to have evening appointments especially in summer with daylight saving. However I do get a little annoyed when it is 9pm at night and I'm all wet and my hourly rate has dropped way below what I usually do due to the difficult behaviour of dogs that don't get groomed often and you can tell the client doesn't appreciate the "overtime" aspect of the work and has no intention of getting the dog groomed more often.

My biggest fear is it will encourage a lot of people to get into the diary that cancel/reschedule on short notice. I have been working very hard in the last few months to train the few regular clients that did this to get the message that last minute rescheduling was not acceptable (especially when I give out a reminder a week before their groom requesting that they get back to me within 48 hours if they want to reschedule). However I know there are clients out there who simply don't respect your time and will do it to you anyway. I just don't want to start filling the book with these due to the new policy.

What do people think? I would love to know of any problems I haven't thought of   

Any thoughts on this one?

I'd love some input

hi

I think it sounds like a good idea, especially considering that you are already below the price of your competitors.
Am interested to know how you go with it

Thanks. I have been hoping someone would post some feedback in this thread.

I haven't completely decided yet whether to go ahead with it. My concerns are that it will annoy the 10-15% of people that ring up every 8-12 weeks as they simply don't know their schedules. At this point when my business is still building I still need those customers.

I really don't want customers going in the book to get the option of a cheaper price and then just cancelling.

I have since thought maybe I could make it that after 2 regular bookings in the diary they move to the $5 off loyalty pricing for clipping appointments only. Making it 2 appointments will deter the people who are just trying to give themselves the option for a cheaper price.

And the other point is do I advertise on my website the option to get a cheaper price after 2 appointments if they go in the book or simply keep this as an unannounced selling point that I can discuss with the client when I hand the dog back?

I think if you don't openly publicise it, but only offer to those you want to have as new regulars, you wont have a problem. ie you 10-15% who dot know their schedules. As for some taking up the option of being in the book, but then cancelling, I think you are going to get that anyway, whether you offer $5 less or not

I have recently changed my pricing structure to do something similar i have 3 prices. a casual price, a regular price which is 8 weekly or less and a vip price which is 4 weekly or less.
It can be mix of services, i.e. a clip one month and tidy the next. 

Regulars get 10% off and VIP's get 15% off
my small dog clip is $60 to give u an idea of what i charge. Im in Penrith NSW.
My condition is the appointment has to be booked in a advance and the discount is lost if the appointment is cancelled or rescheduled.

That's a great idea Gumsgrooming and I like your names for them. I think I would keep it simple and have VIPs (in the diary) and Casual (not in the diary)..... do you mind if I steal those names? lol!

I like how the discount is lost if the appointment is cancelled or rescheduled but do you find losing the discount annoys your VIP regulars? I guess you use some discretion for enforcing this? For example if you think it is a genuine emergency and the person has been a regular for a while?

And do you advertise the price systems (eg. your website or verbally when you hand back the dog after a groom) and do you find it increases people being in the diary and not cancelling?

I find my cancel/reschedule rate is around 1 in 10. Usually due to work rosters being changed, people not realising they had to work, family emergency/death in family and the vibe I get is that people expect to be able to cancel for these reasons without penalty?

That's why I think prices need to go up and I think most of the groomers in my area are now up to $60 for small dog as you quote.

PS> glad some people still look at the forum and thanks heaps for posting. I've been missing all the great advice from here and many people seem to not post anymore

Ive done a similar thing lately, but not made it formal. If Ive done a dog that I would like to do again, I tell the owner that if they rebook now, for within the next 8 weeks, Ill do their dog for $...
This is mainly if I have charged over my standard fee due to the condition of the dog.
They seem to like this

I am not a fan of purchasing loyalty. To me it is not a commodity to be bought and sold. 

Certainly, offer price incentives to get (or discourage) rebooking, but don't expect those customers to be loyal or reliable.  I tend to use  flexibility in my diary to fit in the clients I care most about at times that suit them. Those that mess me around with rescheduling at short notice find they have to book further ahead at less flexible times.  
Long term reliable clients don't necessarily find prices go up quite as often either.

Update.... I decided to not try a loyalty scheme and just have an across the board price rise that is an "invisible" price rise as I like to call it. What that means is for new customers (or non-diary customers) I have begun quoting the new price. I haven't set a firm date for when the diary customers will move to the new price but I'm thinking September when the summer season hits. That is a long time to wait but I think I have unfortunately left it a bit late to be hitting regulars with a price hike as we head towards winter.

I agree with UNM that those customers won't be reliable and loyal. People tend to act in their own self interest and seem to feel it is their right to cancel and I think they would be offended by being financially penalized by doing this. On the other hand people who are loyal and do the right thing tend to have a completely different attitude and really value your work. However I have even had customers like this reschedule maybe once in a year.

I think the ...."it will happen so just deal with it" philosophy is the best so I have started to overbook. By overbook I mean if I want to do 7 dogs in a day I book 8. I've noticed as an average 1 in approx. 10 will want a reschedule. It's funny the  data is actually quite repetitive and predictable on this as I've kept exact figures since day 1 of my business and that's the pattern.

Is that what you mean by "flexibility in the diary"?

I see income now as a weekly target rather than daily. Some days you might work more and others less. A reschedule can mean a late start, a lunchbreak or an early finish. If I don't get any reschedules then I guess I have a busy day without much of a break but I'm thankful on those days that I didn't get a reschedule so I'm ok with that.

Last question.... "long term reliable clients don't necessarily find prices go up quite as often either" .... do you find some clients are friends and question why or get annoyed? I guess if they confront you about it you can always say they were long term clients and don't cancel hardly ever and in my mind that's a fair enough reason? I've always been afraid that different prices will create ill will or come back to bite me in some way?

Snaggywoo- how do you schedule your appointments if you overbook? Do you give clients a specific time for their appointment, or do you give a "morning or afternoon" or do you say,"Ill be there between 2 & 4pm? Im interested in this as I try my best to give clients a time eg 2pm & I then WILL be there no more than 15 minutes before or after that.

I still give clients a specific time for their appointment and I actually do the same as you... contact via text or call if I am going to be more than 15 minutes before or after the time. Sometimes if I am unsure about the time needed for the job before, I might give a 30 minute time frame (eg. 12.30-1pm as the appointment time) but never more than that.

I think clients would be annoyed about large time frames like morning or afternoon or even a 2 hour time frame (eg. between 2pm and 4pm). I know I get annoyed when a plumber or tradesperson says that but I now understand why they do!

By overbook I mean what I said above. If I want to do 7 dogs in a day then I make 8 bookings but give each a specific appointment time. It means early and late appointments and needing to allocate more time to work but I don't know of any other way around it.

Wish dog grooming worked like the hotel or tour industry. You pay a deposit via credit card in order to book. If the petrol stations can all get together and raise prices on the same day and stay solid about it why can't dog groomers make this an industry standard?!?!?!?!

This is an interesting thread. I'm mobile. I give a 2 hour time frame and if the customer requests a specific time i explain that working with animals, traffic etc can be unpredictable and that i'd rather have 100% of my attention on the client in my tub and not watching the clock for the next appointment. I can usually give a rough estimate if it's going to be the earlier or later part of that 2 hour slot.

I think "long term reliable clients don't necessarily find prices go up quite as often either" meams they don't see the price increases as much as less regular clients, which i would probably do the same too.

I started my business pricing with a fixed price of $x for dog size X and then if the client rebooks at the time of the current groom for their next groom within 8 weeks, they receive a 10% discount.  If they then alter that booking by extending past the 8 weeks, they forfeit the discount. I advertise this discount on the website and it is clearly indicated as a VIP status.

This discount is a win-win for everyone. The client has a regularly maintained dog and a discount (which everyone loves). I get - minimal phone interruptions while I am grooming; a dog I know will likely have less knots/matting; a dog that has not been ruined by rough handling from another groomer and so doesn't need rehabilitation; a dog that knows me and so feels more comfortable since I am the only person grooming it; and a dog i can predict the length of time it will take to do, not to mention I also build a repport with the owner (personally I think I get the better of the deal actually)

I have actually had several clients join my clientele because they felt other grooming establishments were taking them for granted (their words) whereas I apparently show my appreciation of their custom.

I am also currently looking at setting up other benefits for my VIP customers which would be small in cost but offer that appearance of appreciation.