How to market web based beauty salon management software in UK?

I'm looking for new ways to market our product, a web based software targeted primarily at spas, hair & beauty salons (and could be used by dentists or other small appointment-based businesses) in the United Kingdom.

Currently we're running search ads on Google and Yahoo, but their financial performance is quite poor (to get $1 of monthly revenue you need to put $5-7 into ads). We're also doing some online promotion in industry/community forums, but with this method click volume is quite low.

Please share your experiences you have in the similar situation.

Forget analytics and online advertising for your main market. The people you need to reach may be worrying about the problems you're solving, but they're not in general sitting browsing the web.

Reaching out to them means

1. Going to see them - in the times you know are convenient for them
2. Making friends with individual salespeople who are looking to get their (physical) products onto salon shelves - because they'll invest the time and money you may not have, and can trade notes on opportunities. You can connect through shows - I'm hoping you made it to Salon International last month, and will have some visibility of the brands trying to grow or establish their positions.
3. Connecting with trainees, who are potential customers and advocates both in their training and their subsequent career

Salons watch their competitors closely. If your system helps you improve no-shows it will market itself.

There's lots I like about your website, but it strikes me that it goes too quickly from good, simple stuff to a mound of features.

From my knowledge of this market in the UK, your competition is

1. The hand-written appointment book
2. PC-based salon management packages with no strong web proposition

I'd suggest that you need to target salons in both categories. (1) is greenfield, but may be very tech-averse, (2) by definition has tech exposure, probably is frustrated by the poor online support, but is already invested in an alternative.

You'll learn how to navigate these issues face-to-face. And you'll find what non-problems you may be giving prominence, what headaches you're not addressing and what language works best to describe, for instance, how texting customers with appointment reminders turns out to be strongly positive for the bottom-line of both the specialist and the salon. That 'both' is very important, as both the salon and the stylist are usually directly involved in the commercial outcomes.

Just because your are a web business doesn't limit you to marketing on the web.
Finding a list of UK salons would be very simple to do.

Buy a database, build an aggressive sales strategy and market in traditional methods.

I would:
1. Telemarketing,
2. Email
3. Visit in person
4. Trade shows
5. Ask your existing clients for referrals.

@amy is right about knowing your competitors,
Knowing who you are up against is a great way to handle objections.

Dedicate a good amount of time studying your competition. Run some analytics on their sites to find out where they're advertising. It will produce some very solid results which you can then use for a new campaign. Make sure you have a few great banner ads. Get them professionally done, if necessary.

First of all, it's a very good thing you precisely quantified the cost to acquire customers; that's the baseline to measure future performance.
There are several things you can try

• optimize the marketing funnel. You need to understand where, in the process starting from the click on the ads to revenue, you lose the users. There are many good posts on the subject, on Wikipedia, on Sean Ellis' blog and on Dave McClure's blog
• Drop the free plan. I can't find the article right now, but people have experienced that dropping the free plan has greatly increased revenue
• Experience with different price points

In any case, I suggest you A/B test every change you implement, and always look at metrics to evaluate the improvement. For easy A/B testing I personally use Optimizely.

Keep trying! The website looks awesome.