Membership programs can help salons and spas improve rebooking, retention, and profitability. However, it is vital to protect your business in these efforts and combat payment disputes with a membership agreement. Let’s look at some insights, examples, and templates for the most common membership types.
Legal considerations for membership agreements
Before we dive in, please note that automatic renewal laws and other legal considerations can vary by region. It is essential that you have a lawyer in your area review your final agreement to ensure you stay compliant.
These templates can still help you save money on legal services, such as avoiding the extra costs of creating documents from scratch. You can also use them to think through your membership options. This process can help you make the best decisions for your business and avoid common pitfalls many salons and spas face.
With this in mind, we have created template downloads for service-based membership agreements, beauty bank membership agreements, and free membership agreements.
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Beauty bank memberships work like a reverse payment plan with a few extra benefits for you and your clients. You can read our guide to beauty bank memberships here for additional information. This template example includes a $100 recurring charge, roll-over credits, and other specifications that may be helpful for beauty bank memberships. You can download and fill it in with all of your program’s details.
Some businesses in the beauty and wellness industry, like Swanky Sugar, offer a no-cost membership program. These memberships provide a similar experience to loyalty programs but with more to offer your business. For example, this option offers guaranteed monthly bookings (rather than the varying effectiveness of loyalty programs) and encourages clients to spend more at your business.
This template example includes a 3-month minimum required membership duration with a $50 early cancellation fee.
Now that you have your membership template, you can start customizing it to your program plans. Consider these guiding questions for help along the way:
What incentives can you offer members to join this agreement? In a traditional membership setup, clients commit to regular bookings in exchange for a discount. Some salons or spas sweeten the deal with additional low-cost incentives, such as 10% off services outside the membership agreement, 15% off products, or priority scheduling through your waitlist.
Are there any exclusions? You will want to include any exclusions in your membership agreement, such as any services, providers, or products that may not qualify for discounts.
Which membership model do you plan on following? Many businesses offer service-based or beauty bank memberships. Others may offer free memberships that provide additional incentives in exchange for a set amount of guaranteed services.
How will you manage membership programs? These programs can quickly become unmanageable without the right support. You will want to streamline membership management within your software system.
Additional considerations for memberships
To avoid conflict within your membership program, consider taking a closer look at potential questions and preemptively answering them in your agreement, such as:
Can unused membership credits roll over or transfer? Please note that your membership style and local laws may impact your requirements here.
How frequently do you want to renew your memberships? Most memberships are charged on a monthly basis, but this can vary depending on your services.
What kind of commitment will you require? Many memberships include a commitment period to prevent one-time customers from taking advantage of membership benefits. For example, “Cancel any time after the first three months.” Keep in mind that clients may be hesitant to join long-term membership commitments.
How far out do clients need to cancel? Cancellation windows help prepare your business for changing income and give you time to fill that opening for another client who may be interested in joining this program.
What kind of penalty will you enforce for early cancellation? Many businesses protect their memberships with a cancellation fee. Keep in mind that these can be hard to collect from defaulting customers. As such, you should always keep a card on file and include this requirement in your membership agreement, as demonstrated above.
How will you protect your staff? If membership discounts come at the expense of your providers, you may quickly find yourself with a failing program and an unhappy staff. Clearly set tipping expectations for member appointments, and decide how you will handle commission-based payouts.
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Why should salons and spas offer membership programs?
The goal of memberships is to boost booking frequency without impacting profitability.
You might wonder, “How can you ensure your services remain profitable with membership discounts?” There are several factors to consider when calculating the value of memberships:
Discount vs. profit ratio: If your appointment slots are always filled, you may not need a membership program to move things along. In this case, membership options may not be suitable for you. However, if your business does need some help booking up, your membership discounts should not offset the appointment’s entire profit potential. You may need to evaluate and adjust your standard pricing or membership discounts to ensure you still return a profit on membership appointments.
Extra spending: Studies show that loyal clients are proven to spend more than new customers, boosting your ROI. Membership discounts can encourage this extra spending and keep your loyal customers coming back more frequently.
Lower marketing costs: Memberships can lower the marketing expenses you may otherwise need to fill those recurring appointment windows. This point alone should help offset membership discounts.
Higher ticket services: When clients are looking for high-ticket services, chances are they will want to save as much money as possible. Membership discounts can encourage potential customers to choose your business over competitors in the area, attracting valuable appointments and high-revenue clients.
Strategic offerings: Most memberships offer a core discount. But (as we unpack more below) other incentives are often low-cost or free to business owners. For example, it is free to prioritize member requests when booking off your Intelligent Waitlist or to designate member-only parking spots in your lot.
Collectively, these factors should offset the slight discount you offer members, making these programs a win-win for customers and businesses alike. You can read our guides to creating profitable memberships and successful memberships here.
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If you need a spa or salon software that supports memberships, Mangomint can help. Our suite of features includes membership usage tracking, automated billing, seamless member management, and so much more. Click here to start your free trial, or schedule a live demo to get started today!
Emily Holzer is a Content Marketing Manager at Mangomint. She has a master’s degree in English and a passion for helping salons, spas, and other local beauty businesses thrive. When she is not writing, you can find her playing chess or tending to her houseplants. Fun fact: Emily has donated 8 ponytails (so far) across 5 hair loss charities in the U.S.
