Ever look around the spa and feel like your staff is just going through the motions? They’re showing up at work, they’re servicing clients, but there is not a lot of energy or enthusiasm?
Staff engagement is a key component of your spa success, but how do you get it?
And how do you know when you have it?
Happy employees are not the same as engaged employees. Staff members can be personally happy, but still not engaged in their work.
A recent State of the American Workplace report found that while 32% of employees are committed to doing a good job, 50% of employees are just putting in time, and 17% are actively disengaged; they are disrupting their coworkers and driving away clients through poor communications and bad service. Imagine how much more productive, and profitable, your spa could be if you could make some inroads in engaging that other 70%!
But it’s easier said than done.
Why aren’t your spa employees engaged in their work?
There are multiple reasons, and it can be a combination of more than one of these:
- You may not be selecting the applicants who are the best fit for your business and culture.
- Your compensation plan may not reward high-performers or provide a career advancement path, causing people to stagnate.
- There is not a clear vision and leadership driving the business forward.
- The spa is not well-marketed and is not attracting a diverse clientele to keep your “artists” motivated.
- There are too many cliques operating in your business, and those on the outside tend to disconnect.
We Are Not Human Resource Professionals
Part of the challenge facing spa management is that we are not human resource professionals. Our creative orientation sometimes causes us to believe that if we hire someone who is technically good at massage or esthetics, the rest will take care of itself. But all too often, that’s not what happens. Engagement in our work doesn’t just happen. It requires the creation of behind-the-scenes processes and structure to select the right people, and ongoing training, compensation and career development to keep them mentally tuned in. Certainly, spa staff members are interested in their earnings potential, but they’re also interested in opportunities to train and grow as professionals; in fact, their artistic backgrounds often mean that these factors can outweigh financial compensation. That explains the importance of creating annual budgets that allow the business to provide regular high-quality training for all staff members.
Human Resource consultant Josh Bersin of Deloitte explores tactics business leaders can follow in this post titled “Five Elements of a Simply Irresistible™ Organization;” while these are targeted to large employers, the basics he espouses are exactly the same for spas and small businesses. Put a little energy into considering the environment and culture you are providing, and it will come back to you in multiples.
In many cases, as spa leaders, we just need a refresh.
We need to step outside of our spa and refresh our skills and our minds. If you need a refresh, consider registering for the Wynne Business online Spa Director’s Management Intensive. Our online course is available on-demand to fit into your schedule. Learn more about this valuable resource here.
One of the crucial issues in spa marketing is to create a promise to the client that can be fulfilled by the spa, so that expectations are aligned with reality. In recent years, I’ve visited two spas that exemplified this concept, and I was unexpectedly delighted with both.
It might seem like being the only spa in a small town would help ensure your success. But what if that town was a mining town in the high desert, filled with pickup trucks and empty storefronts? My first pleasant surprise of the week occurred at just such a place. I enjoyed a facial performed with the expert hands of a well-trained esthetician, snacked on a variety of interesting dried fruits that are also available for sale, shopped in the well-stocked and merchandised boutique, and enjoyed the teamwork of a tightly-knit group of women who are setting the bar for their town, and it will be a hard act to follow for anyone else. In fact, this spa is so delightful, it recently won recognition for being one of the best spas in all of Wyoming.
Escape Day Spa & Boutique has an “island” vibe, which adds to its allure as a fun retreat amidst the soaring skies and western vistas of this part of Wyoming. The spa is located at 430 Broadway Street in Rock Springs, Wyoming. The treatment rooms are referred to as “cabanas” with names such as “Oasis,” and feature island references such as rolled bamboo ceilings and the gentle sound of waves in the background. But there are no neon palm trees here, all decorating is tastefully done. There are no locker rooms, but two changing rooms, one with toilet and shower, that are each fully equipped with every creature comfort, and are spotlessly clean. The spa has been through one expansion and the owner is now planning to move it into a much larger space two blocks down the street. Being the first on the scene, the owner and her staff have had to work hard to educate their clients about what to expect from spa services and products, but they’ve obviously been successful.
My next stop was the Skana Spa at the 1200 acre Turning Stone Resort Casino in upstate New York. This bustling complex features five separate hotels, casino and event space, a sportsplex, numerous restaurants, and two spas. While being a half-hour east of the city of Syracuse is not exactly the middle of nowhere, it is certainly not a “metro” area, and I was taken by surprise by the entire experience. The line checking into the hotel on a Sunday afternoon was reminiscent of Las Vegas.
The Tower hotel offers Ahsi Spa, but I elected to venture through the casino, over the walkway and into the tranquil and upscale environment of Four Diamond award-winning Lodge to have services at Skana. This spa offers 12 treatment rooms, salon, full men’s and women’s locker rooms with steam, sauna and whirlpool as well as a large co-ed whirlpool, and a Spa Café. The treatments were expertly done, and I enjoyed the facility which supported the menu of services based on Oneida Indian culture, but did not call overt attention to itself.
Both of these excellent spas illustrated the point that you don’t need to be front and center in the spa universe to be successful or to provide a top-notch experience for your clients. But you do need to have an identity and vision, to communicate that clearly in your marketing materials, and then be able to deliver on your promise to your guests. As the army says, “Be the best you can be.”
Ready to take your spa experience to a new level? Contact us for a free 30-minute needs assessment.
A version of this post appeared first on Spa Standard.
Welcome to the new year!
The older I get, the more New Year’s Day reminds me of the movie Groundhog Day; I can’t believe it’s here again, already! The fact is, the more quickly the years tick by, the more urgency you may have as a business owner to avoid procrastinating in regards to your spa business.
New Year’s resolutions have actually been around since the ancient Babylonians marked the new year as a time to repay their debts and return borrowed objects, 4000 years ago. You know that list of changes you’d like to make, or new approaches you’ve been meaning to try? The time is now, no need to wait until another year, or two, or five, goes by. Select one activity from each of these four areas, and get to work! Read more
If you own, manage, or plan to open or acquire a spa, this program is a must!
Presented by Lisa M. Starr and Peggy Wynne Borgman of Wynne Business Spa Consulting
If you’re already involved in spa operations, you’ll find solutions for your toughest management challenges. If you’re planning a facility, you’ll leave this program with a clear-cut strategy for business success. If you’re considering a career change or advancement into spa management, the Spa Director’s Management Program will put you miles ahead of the competition. This fast-paced, information-packed program is full of original, innovative but practical concepts that are actually at work in top spas. We work hard to make sure the days you spend with us are extremely rewarding. You’ll also take home our exclusive text, an incredible reference you’ll use again and again. This includes tools you’ll be able to put to use the day you return to work. You’ll have a chance to meet other spa industry professionals, a diverse group of people, from all over the world. Participants typically represent a variety of industries and greatly enrich the program with their input. You’ll create a support network that will prove invaluable as your business or career grows. The small size of the class ensures individual attention and maximum interaction.
- Managing by the numbers: understanding financial statements
- How productive is your spa? An accurate way to measure
- Compensation Design: the key to profitability
- Owner compensation: what’s fair?
- Plugging the profit “leaks” in your spa operation
- Discounting: is it right for your facility?
- Staying out of trouble: proper accounting practices for spas
- The raging gift market: taming the tiger
- “One-to-one” marketing: cheaper, better, faster
- Customer retention: your best marketing tool
- Calculating your actual cost of customer acquisition
- A formula to instantly boost your sales by 33%
- The power of PR: developing your media kit
- Positioning your spa to survive intense competition
- Essential components of great spa brochures
- Developing a compelling service program
- Long-term programs: the new spa package
- Programming for profit: which services to emphasize
- Two key trends that must guide your program design
- Staging spa experiences: the perils of packages
- Workflow: managing its impact on quality and morale
- Scheduling for maximum productivity.and quality
- Recruitment: effective strategies for hiring the best employees
- Why the customer comes “second” in a successful spa
- Why you’re doing everything yourself.and how to stop it!
- Managing communications issues in your spa team
- Why you can’t motivate your staff and what to do about it.
- How to produce great staff meetings
- Managing conflict between technical and support teams
- Getting your support team to “think on their feet”
- What customers value most: it may surprise you
- How to manage quality in the “closed door” spa environment
- The three essential ingredients of world class service
- Training = quality: building your in-house program
- How to instill a “quality” mindset in your entire team
- Customer relations: resolving complaints
- Comps, refunds and redo’s: how to use them wisely
- Harnessing the awesome power of retail sales
- Teaching spa therapists to sell
- Tools and Techniques that support retail sales
- Do you need a Home Care Consultant?
- Creating a profitable retail mix
- Retail Trends
- The Spa Store: Visual Merchandising and Display
- Mail order and online stores: Are you ready?
Seminar venue: The charming Inn at Saratoga, along the banks of Saratoga Creek in the historic village of Saratoga. Nestled in the foothills of the Santa Cruz mountains, the Inn at Saratoga is a peaceful Silicon Valley hideaway. Just 20 minutes from San Jose International Airport (SJC) and 50 minutes from San Francisco International Airport (SFO).
If you would like this course offered LIVE in your location, please reach out to us at email@example.com
to discuss or access our online Spa Directors Management Intensive here.
- Are you confident in your employees’ ability to resolve guest complaints?
- Do they know how to handle the inevitable issues that arise in a busy spa operation?
- Are you certain that guests leave your spa satisfied?
- When was the last time they received training in complaint resolution?
A great reputation has always been the best way to market a spa. But the internet has made superior customer service a crucial survival skill.
Web search is one of your top marketing modalities, and negative reviews can cost you thousands of dollars in lost revenue.
Our employee training, “Moments of Truth: Mastering Complaint Resolution and Service Recovery” can give you a chance to economically and quickly get your team up to speed.
Don’t let another month pass without inoculating your front-line team against mediocre customer service, and common errors.
“The road to success is paved with mistakes well handled,” said the founder of Neiman Marcus. This training is designed to enable your front desk team to manage the inevitable mistakes and mishaps of a busy spa operation, while strengthening customer relationships and improving customer service. The adrenaline-charged moment when an upset customer complains is a make-or-break event for your business. Make sure your team doesn’t hide their heads in the sand–ensure that they will ride to the rescue of your reputation!
• Why your team must treat complaints as an opportunity
• 96% of your guests won’t complain; how to treat the 4% who do
• Using complaint resolution to improve relationships
• How online review sites have magnified the power of unhappy guests, and what to do about it
• Managing the “fight or flight” response when confronted by an upset customer
• The five steps to masterful complaint resolution
• Cultivating awareness: the ounce of prevention
• How to ask questions that get real answers from your guests
• Making it easy to complain
• How and when to apologize
• Helping the guest realize you’re “on their side”
• Avoiding the common mistakes of complaint resolution, including explaining, blame and scapegoating
• How to effectively manage a “venting” guest
• Techniques to improve your listening skills
• How to tell the difference between an upset and an abusive customer–and what to do about it
• Restoring a guest’s faith
• Making amends without giving away the store
• What most clients really want from “amends”
• The hidden danger in giving refunds too quickly
• What to do when your offer of amends is rejected by an upset guest
• How to prevent problems from recurring
It’s a sign of the times. There are lots of distressed spas on the market right now. Many of these spas look like real bargains, selling for pennies on the dollar of their replacement cost. How is a potential buyer to know what the business is really worth?
Valuing a business is both a science and an art. The science includes the valuation formulas that are typically used. One valuation formula is “multiple of earnings.” Earnings include net profit, but it’s typically adjusted upward with “add backs,” things the business owner has written off that are primarily for their personal benefit, such as their salary, a car or business-with-pleasure travel expenses.
The art? That’s the value of the business relative to the buyer’s opportunities. Strategic value is just one of these considerations. For example, if you already own a spa and you’re considering the purchase of a second spa in a nearby town to expand your brand, and you can leverage an existing back office, that business may have more value to you than to the buyer who’s starting from scratch.
Is the seller using a business broker? If so, the “book,” or sales documents for the spa, should be filled with important data that will help you assess its real worth. There’s also a lot of fluff in there, but the numbers are the most important.
The financial statements should tell you much of what you need to know–that is, if they’re in good shape. A spa that’s for sale is probably losing money, so expect to see that reflected in the profit and loss statements. If things look too rosy, ask to see a P & L that has not been recast for the sales package, so you can understand what the add-backs are quickly. (The business broker should have this information at his or her fingertips anyhow.) We want to know what the spa has really been doing in the last year. Previous years were probably better–but that’s not terribly relevant these days.
Once the add backs have been calculated, you might see a small profit. Here’s the sad news for that seller, and for you as the future owner: spas generally sell for 2-3 times earnings (profits.) My brother-in-law, who’s in biotech, on the other hand, can sell his company for 18 times earnings. Spas and salons (and most personal services businesses) are at the low end of the scale when it comes to valuation.
That’s right; a salon with a net operating profit of $50,000 may sell for $100,000, but a biotech company with the same earnings could fetch $900,000.
It’s not just our low profit margins that dampens value, but the flighty nature of our workforce. Plenty of spas and salons that are sold lose a substantial number of their service providers. Spa and salon employees spook easily, often not waiting around to see if a new owner will actually improve things. As we know all too well, even the loss of one good employee with a strong following can mean a substantial drop in revenue, as clients follow them elsewhere.
Of course, it’s not just profit, but the balance sheet, that will determine the valuation of the business. The business is worth less if its assets are outweighed by its liabilities. One potential source of liability is unredeemed gift certificate/gift cards. You must be confident that the documentation of this liability is complete–and it often isn’t.
If you are simply purchasing the assets of the spa (an Asset Purchase), such as its lease and its equipment, and don’t plan to use the business name, you don’t have to assume its liabilities, including gift liability. Even so, it may be a good marketing idea to redeem gift liability in part or in full, on a voluntary basis and for a limited term. The value of the goodwill generated will probably exceed the hard cost of redemption.
You may be looking at a spa whose earnings with addbacks are $50,000 and using a multiple of 2x to give it a value of $100,000. But their gift certificate liability is $200,000. Here’s where “art” comes in, again–how do you determine the real liability there, since we know not all gifts will be redeemed? This is where a spa management consultant can help–looking at historic trends, aging of the gifts, etc., to produce a realistic number. Maybe that number is closer to $80,000, and you’ll only end up spending $40,000 in payroll and backbar supplies to service that $200,000 liability. If you want to use the spa’s trade name, you’ll pay for this. But an asset purchase, where you wipe the brand slate clean, can eliminate the liability. Will changing names and rebranding the business cost you more than $40,000, in hard costs and lost business?
As well, you need to know the laws about gift certificate expiration in your state. Some spas pay tax on their gift revenues as they come in (the most prudent and IRS-favored approach); others wait and pay taxes as those gift certificates are redeemed (setting a spa up for an ever-growing tax liability.) If you want to sell your business and you’re in the latter camp, a buyer will have to consider this.
In California, the value of unredeemed gift cards can be converted from a liability to income after three years of dormancy. By law, the gift cards don’t expire, and you still have to honor them, but at least you can get it off your balance sheet.
We’re even aware of spas being “sold” for the price of assuming gift liability and a lease–no money is being exchanged in some of these deals. Landlords who are desperate to avoid vacancies in their shopping center real estate (which depresses rents and makes any other space less desirable) are sometimes willing to provide free rent–we’ve seen periods up to one year.
The decision to retain the spa’s existing name and branding is one to approach carefully. Look at online review sites to get a sense of how well the spa is managing its customer relations. It’s usually not possible to interview employees, but sometimes key management employees are privy to an owner’s decision to sell.
Reputations are on vivid display online, though you do have to take ratings with a grain of salt, since most review sites skew to the negative. Yelp, most notably, will “age out” positive reviews posted by people who write no other Yelp reviews, after just 90 days. Google aggregates reviews from different sites, providing a cross section. Some spas ignore online review sites, like Yelp–to their peril. If you think the spa’s name is “radioactive,” then don’t hesitate to rebrand. If the spa is established, with a reputation that’s slightly tarnished, an aggressive “under new ownership” marketing campaign, followed up with real improvements, may work the needed magic. Keep all of this in mind when thinking about how much you’re willing to spend on a spa.
This is merely an introduction to some important fundamentals of valuing a spa for sale, but it’s far from comprehensive. It’s essential to get help from a reputable business broker experienced in the sale of small businesses, and doubly so if the sellers are not using a broker themselves.
Owners are often emotional about selling, and probably under a lot of stress. It’s helpful to have a cool, collected third party between you and them. The first notion a seller needs to discard if they’re serious is the idea that they should be able to “get their money out of” a failing spa. It’s not going to happen–but you don’t want to be the one who gives them the reality check.
Next time: financing the purchase of a spa
We posted this short, funny, customer service video on YouTube, showing common sales and service “horrors” that happen in spas and salons everywhere, ruining chances of retaining guests, rescheduling, and retailing. Each vignette illustrates a fatal flaw–some obvious, some more subtle–and all of them re-enactments of real spa employee behavior I’ve personally experienced. It’s a great clip to show at a spa staff meeting, and certain to get people talking.
When you’re ready for the horror to end, you’ll find each of these scenes, along with vignettes showing the proper way to “replay” each, available on DVD and mp4 format, titled Selvice: Seven Steps to Abundant Sales and Stellar Customer Service.
Please email us to receive a copy.
Thanks to BoomCycle Online Marketing for their stellar video editing on “Tales from the Spa.”
Registration for this webinar has closed and below are the topics which were discussed. This training is available online as Part 2 of The Spa Concierge Finishing School. Please check the Events and Learning Academy pages for this and other trainings.
The first in our “Moments of Truth” series for your front desk team, this one-hour session is perfect for honing skills, building sales awareness and enhancing the service mindset.
Guests who are calling you for reservations are not just looking for appointments, they’re seeking a “preview of coming attractions.” Does your team handle your reservations calls like ho-hum, routine transactions, or do they strive to create a positive and memorable experience for every guest? This training session for front desk and reservations employees and their supervisors is an eye-opening journey into what it takes to provide five-star reservations service while growing sales.
• Are you “filling an order” or “creating an experience” for your guests?
• Moments of Truth and why they’re so important to guest satisfaction
• The Three Elements of every great service experience
• Getting the Greeting right
• Finding your voice: what your guest wants to hear
• Creating rapport with callers who have different “social styles”
• Making the best possible first impression
• Essentials of telephone etiquette
• The do’s and don’ts of the “hold”
• Using the guest’s name effectively
• How to answer those tough or tricky questions (like “who’s your best massage therapist?”)
• Shortcuts for creating rapport quickly
• Active listening techniques
• What your returning guests need from the reservations call
• What they’re really saying when they ask, “How much are your facials?”
• Spreading the love around: how to make sure all your guests get great care
• Offering alternatives when their selection isn’t available
• Upgrading gracefully
• The best way to discuss “gender preference” for massage appointments
• How to communicate your cancellation policy without ruining the mood
• Helping ensure a smooth first visit: pre-arrival orientation
• The Fond Farewell