Spa Services

How to Plan an Effective Spa Discounting Strategy

Are you struggling to fill your spa appointment books, but not sure about the discounting route?  Proceeding with a cautious spa discounting strategy is the best plan.

Spa Discounting Strategy

Discounted pricing has become an important marketing tool in the battle to attract new clients, and keep the ones you’ve got.  But it’s an undeniable fact that discounts eat into your already slim profit margins, and can negatively affect cash flow.

You’ve no doubt heard some of the horror stories generated by Groupon experiences, which share a similar theme.  A small 4-treatment room spa that needs more clients decides to participate in a Groupon or similar promotion and ends up selling 400 vouchers.  The 400 “new clients” descend on the spa, which is unprepared to handle them.  There are not enough therapists, they’re not well-trained, and there is not enough laundry or front desk staff to ensure a smooth visit.  The clients have a mediocre experience (what they expect for $50 is another story) and vow never to return.  Some of them go so far as to post negative reviews on Yelp.  The spa closes soon after.

Happily, the Groupon obsession seems to have subsided, and not all spas that participated in these types of promotions went out of business.  But the fact remains that when you focus your marketing efforts strictly on price, you attract clients who are interested in price before all else; quality, ambiance, experience, the overall value that you can provide.

However, the concept of paying full retail for anything these days is not a given, especially for the millennial that are your clients.   This is the brave new world we inhabit; trying to build a brand and attract clientele, give them an experience that at a minimum meets their spa expectations, and preserve your cash flow and profit margins all at the same time.

Ever since WWII, Americans have been in love with the idea of discounts.  The thrill of getting something for less than the advertised price is more important than the acquisition, for many people.  Or at least for people who are focused on price, rather than quality.  Now our recent economic situation has created a new iteration on the discount strategy, the membership program.

No finer example of that exists in our industry than Massage Envy; over 700 locations, each grossing over a million dollars a year, and still growing.   Volume like that inspires a lot of wanna-be’s, hoping to cash in on this concept, but I think the Massage Envy ship has already sailed.  Not that you can’t have a discount membership program at your spa, but building an entire business around this concept has been done, and done well.

Certain industries have ingrained the discount message into consumers; just look at what is happening at department store JCPenney.  Penney’s hired the innovative executive Ron Johnson, the former Sr. V.P. of Retailing for Apple, to be the CEO last fall.  Johnson is credited with creating one of the highest sales-per-square-foot environments in the retail world at Apple, and Penney’s felt like it needed some innovation.  The idea was that Penneys would shed its discount and coupon-driven mantle, and focus on providing everyday low prices and value, and staying away from the “sale” word.  Turns out, folks that shop at Penneys like prowling the aisles for deals, and they’ve been staying away from the store in droves.  The jury is still out on whether this experiment to transform the company and its reputation will be successful, but I give Johnson credit for bravery.  I’m guessing it’s going to take more than just a few months to retrain the consumer on Penney’s new value proposition.  Why?  Because humans are creatures of habit.

So what does this mean for spas?

It means we need to be very careful about the message and image we convey to our target audience.  If we start training guests that our prices are as malleable as they are at the department store, we risk beginning a dangerous downward spiral.  Consider this interesting article, “Customers Will Pay More For Less,” by Alexander Chernev, in Harvard Business Review, in which two researchers discovered that consumers were willing to pay more for two separate items than they were willing to pay when the items were bundled together.  For instance, people were willing to spend $225 and $54, respectively, on two pieces of luggage when purchased separately, but when they were bundled together, consumers were only willing to pay $165!  The reason is attributed to a thought process called categorical reasoning and is especially present when an expensive item is bundled with a less-expensive one.

If you are creating special offers that pair higher-priced spa services with less expensive ones, you may be devaluing both of them in the eyes of the consumer.  Be strategic and consistent with your pricing, and you won’t run the risk of thoroughly confusing the consumer about your true value proposition.

Do you need help identifying a solid discounting strategy? We can help. Our team has worked with leading spas across the globe. Contact us for a complimentary needs assessment.

 

 

Age Logic Cellulaire - Anti-Aging Product

Spa Retailing: Whose Job Is It?

Spas know that retailing is an important component of revenue generation, and yet many still struggle to reach hoped-for results.

Who’s responsible for driving retail sales in your spa?

Management? Therapists? Support Staff? Product Companies?

It’s actually all of the above.

While spas consider product sales to be less important than the main spa focus of selling treatments, the business of retailing is a major industry globally. China is currently the second largest retail market in the world.

Retailing at Spas

Click to watch our short learning video with Spa Retailing Tips

According to McKinsey Consulting, the surging middle class in China is fueling a growth rate in luxury goods consumption that has ranged from 16-20 percent annually for the last four years, and Nielsen Companies finds that the health and wellness sectors are also maintaining a strong and steady rate of growth. Retail sales in China and globally continue to be fueled by social media, as shown by product and service reviews shared on Sina Weibo and Meilishuo. The retail industry global infrastructure includes trade shows, associations, best practices, and degreed university coursework. What spas do is dabble in retail; having a few shelves on a wall with a scattering of skincare products doesn’t make a business a “retailer.”

 

Since spas are clearly appointment-driven businesses, the common focus of spa management has been on selling treatments and experiences rather than thinking like a retailer. Spas open their doors in the morning with books full of appointments and knowing that those clients will be passing through certainly takes the pressure off the immediate need to create additional sales. And yet, the benefits of retailing are numerous, and include:

  • Providing an additional revenue stream
  • Creating sales that are NOT dependent on appointments
  • Enhancing and extending the value of the spa treatments guests have received
  • Presenting a range of margin opportunities for the business
  • A fast and simple way to grow average ticket for both therapists and spa
  • Building client loyalty and retention

All of these excellent results, however, do not happen by accident. Achieving a healthy retail to service sales ratio is the result of focused efforts by all of the stakeholders, working together to create a compelling retail environment.

Management

As with many initiatives, effective retailing starts at the top. Successful spa retailers carry a selection of products from retail partners that are in keeping with the vision and mission of the spa brand, and that are priced appropriately for the target customer. Innovative spas will also look beyond the typical beauty brands for retail items that can drive sales as well as margin. But the most impactful action management can take is to be purposeful in hiring and training staff who can create rapport with guests, and in creating compensation and advancement plans for therapists which include retailing benchmarks as part of the career path.

Therapists

Without a doubt, therapists play the biggest role in retailing to spa guests. As the uniformed experts, their artfully presented home care suggestions, in tandem with their one-on-one interaction with the guest, will be the biggest driver of sales activity. Therapists who are well-trained on the spa’s products and ingredients can weave suggestions into their service routine in a seamless way, which does not feel as pushy to the guest as a rushed effort at the service conclusion, or a list of products pushed into the client’s hands. Making home care recommendations MUST be part of every treatment on the spa menu.

Support Staff

While the therapist’s personal touch is key to introducing home care to the client, in a busy and/or large spa it can be difficult for therapists to complete the sale. Clients may be heading on to another treatment or spending time using spa amenities, and by the time they check out they have forgotten about products. Well-trained support staff who can advise on usage will be effective in closing sales.

Retail Partners

The role that vendors and resource partners play in the retail chain cannot be overlooked. Effective brands will provide plenty of tools and training for all of the spa staff, on a regular basis. Supporting activities including inventory planning, sampling, retail support tools and marketing collaterals will certainly help the spa to be more successful.

The global personal care product market is estimated to total $1.5 trillion annually. Your clients are purchasing home care products from somewhere, it might as well be your spa!

Are you struggling with retailing at your spa? Our team can help. Contact us to schedule a complimentary 30-minute needs assessment.

 

 

 

A version of this post appeared first on spachina.com.

How Spas Help Battle Aging Using Non-Medical Methods

The International Spa Association defines the word ‘spa’ as “places devoted to overall well-being through a variety of professional services that encourage the renewal of mind, body, and spirit.” Can we add anti-aging to the mix?

We know how rejuvenated our minds and spirits can feel after a relaxing full body massage or body treatment, but the reference to the body, our physical selves, can be harder to judge.  After all, massages don’t make us look different. While they don’t necessarily want to look younger, most of your female clients would be very happy with the ability to halt the forward march of time, and stop aging in its tracks.

There have been so many advancements and developments in technologies of both products and equipment that slowing the effects of aging is almost becoming a reality, meaning that you don’t have to be a medical spa to provide anti-aging or rejuvenation treatments to your clients. A typical manifestation of the aging process is the appearance of your skin. Aging skin loses collagen and elastin from the dermis, causing skin to become less firm and radiant, and gradually to form wrinkles through the processes of glycation and cross-linking. Causes of aging are both extrinsic and intrinsic, and include too much sun exposure, lack of hydration, excessive intake of caffeine or alcohol, and genetic predisposition. Battling these symptoms used to require a visit to a healthcare professional or medical spa. But today’s new advancements in technologies mean that spas can offer progress in delaying the appearance of these symptoms on both the face and body.

Equipment for Anti-Aging Treatments

There are now numerous skin-tightening devices available for non-medical professionals:

  • Light-emitting diodes (LED) – These devices work by using light energy to trigger the regeneration of skin cells. Red light LED is said to be particularly effective at healing and skin repair. These treatments are painless and can be administered by estheticians or beauty therapists in half-hour segments.
  • Microcurrent – This technology employs low level electrical energy on the adenosine triphosphate (ATP) in the body to stimulate the body’s natural repair system. The therapist uses dual-tipped probes and a conductive gel to deliver the current to the skin, where it is said to improve circulation and skin tone.
  • Radio Frequency – RF devices work by emitting electromagnetic waves which heat the dermis and stimulate collagen production. Some RF devices combine the technology with other modalities, such as LED, to increase effectiveness.

In some countries, personal devices have been created which can safely be used at home.  Whether for deep cleansing and exfoliating, such as the Clarisonic skin brush, or anti-aging effects like LED masks or the Tria personal laser, clients are sure to desire the newest take-home devices to augment their spa treatments.

Products for Anti-Aging

Age Logic Cellulaire - Anti-Aging Product

Anti-Aging products like Age Logic Cellulaire can reduce the signs of aging.

Numerous advances in cosmetic chemistry have resulted in product formulations and delivery systems that produce excellent results, both in the spa during treatments, and continuing at home through follow-up home care.  Espa’s Lifestage line consists of three products designed to rejuvenate aging skin through Natural Encapsulation and Stage Release Technology; these products are not recommended for those under the age of 40. Thalgo offers several anti-aging ranges, including products utilizing hyaluronic acid, collagen, marine silicium extract and caffeine. Anti-glycation agents, vitamins C & E, and ATP are utilized in Age Logic Cellulaire crème from Rene Guinot.

Clients Must Do Their Part to Support Anti-Agina Methods

While it is now possible for clients to get desirable beauty-care results through these non-medical methods, with no pain or downtime, there is still no magic in skincare products or equipment. In order for clients to remain youthful beyond their years, they will have to do their part outside of the spa.  Avoiding sun exposure, one of the biggest contributors to premature skin aging, is an excellent start. Be sure to have plenty of sunscreen on hand to retail to your customers, especially during the summer months and travel seasons.  Also, train your entire staff to instruct clients, as appropriate, on the importance of their personal care outside of the spa. A regular routine that includes getting enough sleep, following a proper diet and drinking plenty of water on a regular basis will also provide a good foundation so that anti-aging spa treatments are even more effective.

Wynne Business can help develop a successful anti-aging consultation process for your spa.  Schedule a complimentary 30-minute needs assessment consultation with Wynne Business.

 

A version of this post appeared first on SpaChina.com.

Making Art, Creating Delight: The Top Tier of CX

It’s time to talk about the final component of World Class CX: Art. The dessert. The frills. The fun stuff.

You can’t have a successful business without these first two ingredients:

1. Core Values: the “soul” of the business, what you stand for, your commitment to your customers

2. Structure: the “body” of the business: its muscles, sinew and circulatory system. The stuff that holds it together and makes it work.

Only when these foundational layers are securely in place can we turn our attention to the final layer, Art.

Art could also be called Magic. And magic happens when you anticipate a customer’s unspoken needs. Things they themselves may not realize they want or need. This is true whether your business is a highbrow spa or a local-color brewpub.

If you’re not psychic, the way that this happens is that you pay close attention to what your guests want and need, and you codify that as part of your system. So that when customer number ten thousand walks through the door, you dazzle her with small touches that elevate the CX to art.

Art is all relative. A friend and I were comparing notes about the warm blankets provided at the outpatient surgical center we’d recently visited. You’d think we’d visited the St. Regis.

Art is the level of CX where we “exceed expectations.”

As such, Art is a fragile flower. It only grows if it is fed by Core Values and protected by solid Structure. A lot of businesses want to skip right to Art, because it’s fun, the dress-up part of “playing store.” A lot of businesses think that Art means spending a lot of money decorating your restaurant or hiring pretty people. However, you can’t exceed expectations if you haven’t even met them in the first place. (No, you don’t get to skip to the head of the class because of your shagreen banquettes.)

We’ve all been in gorgeous retailers, where every effort and expense has been expended to dazzle you–yet it falls flat. You’re not greeted warmly. The staff doesn’t know their inventory. You walk out without making a purchase. Art, schmart.

Maybe it’s the new restaurant with the marquee-name chef, million dollar kitchen and the spectacular hostesses helming the podium. You eat there once and, though you can’t fault them for anything, you just don’t see a reason to return.

Art isn’t just for the high end–though it’s essential if you’re going to compete in the stratosphere. Art doesn’t have to be expensive. It’s not just about fountains or new signage or expensive floor coverings. In fact, much of what turns into Art in your CX is human-generated. And a lot of it is discovered accidentally.

Artful CX is generated by:

  • freshness
  • creativity
  • thoughtfulness
  • anticipation
  • ease
  • exploration
  • refreshment
  • authenticity

But if we are to make this tangible, let’s identify some of the best artful touches:

  • A sincere and prompt greeting
  • Remembering a customer’s name
  • Remembering a customer’s preferences
  • Acknowledging special events in a customer’s life
  • Hand-written thank you notes (or a phone call saying “Hey, we’ve missed you.”)
  • Invitations to special events
  • Regular “refreshment” of the environment, displays, menus
  • Staff members whose appearance expresses the brand
  • Opportunities to personalize and customize our experience
  • Immaculate facilities

If that list doesn’t look dazzling, there’s a reason. The best “magic” is human-scaled.

You can already tell that Art is a much more elusive quality than the two components we’ve already discussed. Not every business manages to get here. Not every business can provide its employees the freedom to create art…because art isn’t made with cookie cutters.

In the upper stratospheres of the marketplace, Luxury Consultants are making it harder to be magical. There is a lot of heavy-handed engineering of artful experiences these days, in the five-star world. While we appreciate the effort, it often feels just like that: effort. The creation of faux “rituals” is one trend that can be downright embarrassing. (Quasi-indigenous faux rituals are the worst.)

So where do you look for inspiration? The biggest focus groups in the world: online review sites like Yelp and Trip Advisor. Sure, there is a lot of information there about what annoys people who visit you and your competitors. But just as important, there is a lot of information there about what delights people, much of it small and affordable stuff.

Art isn’t made once and then permitted to gather dust. Art is “made fresh daily,” over and over. That takes energy, effort, and leadership. It takes good examples. It also requires supporting risk-taking by your front line and supervisory employees.

Many good Systems begin life as Art. When a “delighter” is discovered, it’s often worth codifying as a system. Back to our dinner at Shadowbrook and the question about whether we were celebrating a special occasion. That question was probably discovered by an on-the-ball server, who shared the idea with others, until it eventually became part of the System. Yet it still functions as Art, creating opportunities to delight guests, who feel that our needs have been anticipated.

Roots, Structure, and Art: put these three components together effectively and you’ll have a supply of loyal customers that lasts as long as you’re willing to Make it Fresh Daily.

 

Keeping your Gift Card Clients

Hopefully, your gift card selling season is well underway by now.  According to forecasts by the National Retail Federation, 77% of shoppers are expected to purchase at least one gift card this holiday season, and many reasons are cited for their popularity, including convenience for the purchaser, and the option of choice for the recipient.  The average American will spend $145 on gift cards, up from $139, or a 4% increase, which is corresponds to the holiday sales forecasts of increases of 3-4% over 2009.  Traditionally, the spa gift card average has been between $100 and $125, although that range doesn’t account for some of the aggressive discounting and giveaways that were used in 2009.

However, as we often say at Wynne Business, gift card sales bring in prospects, not customers.  Now is the time to think about how, when those gift cards are redeemed, you will turn those prospects into return clients.  For the plan to be effective, stand back and give your business the 30,000 foot view.  The strategy for keeping gift card clients is not the same as when we cover a not-so-great Christmas present with a beautiful wrapping paper and bow.   Your fundamental business procedures need to be solid, clear, and communicated to everyone on your staff, or spending money and energy on marketing efforts becomes a lottery game; will the client experience your spa at its best, or will they visit on a not-so-good day?  We’re talking about the usual fun stuff; employee handbooks, position descriptions, operating standards, service protocols, the policies and procedures that are not much fun to create but are the backbone of a business with smooth operating flow.  Without these tools in place, your staff will be forced to make it up as they go along, which is not a consistent way to build your business, and doesn’t often lead to a spa visit that meets or exceeds client expectations.  If you are missing some, or all, of these pieces, don’t despair; with a little help, you can pull it together by Q2 of 2011 and be ready to move on to a marketing plan.

Once those essential building blocks are in place, then you can focus on creating some offers specific to your gift card recipients, such as value adds, service vouchers or upgrades, or loyalty plan points, that can be used on their subsequent visits.  Let’s plan to bring back those prospects for a second and third visit and turn them into clients, expanding your reach for future seasonal sales opportunities.  Valentines Day is only 8 weeks away!