How did you start your day today? If you’re like me, you attempted to divine what sort of mood the country was in when you got up, checking the news as you got your game face on. The big story (as it’s been for awhile) was layoffs. I’m sure we were both wondering what all the economic doom and gloom meant for our discretionary-income driven spa businesses.
I have to say, tonight I feel I am a bit closer to getting my arms around this confusing mess. I had the good fortune to hear Christoper Thornberg, an economist, speak at my Entrepreneur’s Organization chapter event in Palo Alto. (If you own a business with at least $1 million in annual sales, you should join your local chapter of this brilliant business organization—now!)
Thornberg is an expert in the study of regional economies, real estate dynamics, labor markets and business forecasting. He’s a principal at Beacon Economics, an economic research and consulting firm that specializes in real estate markets, local economic development, and public and private policy issues. As part of the California Council of Economic Advisors, Dr. Thornberg advises State Controller John Chiang on the state’s crucial economic issues.
During his lively and often very funny talk (I think he might be able to bill himself as the Lewis Black of Economics) I took copious notes, hoping to absorb and share as much of it with you as possible. One thing the spa industry doesn’t do much is look outward. Indeed, we’ve spent years congratulating ourselves on our fabulousness. So it’s a real blow to our pride to realize we’re subject to the same laws of business gravity as everyone else. And that, perhaps, we are far less prepared than many other businesses to weather this storm.
Here are some of the key ideas I was able to take away from Thornberg’s talk.
- Recessions follow huge imbalances. (See: dot bomb) For this one, we had three big ones: housing, finance, and excessive consumer spending. Before they blow up, these massive imbalances/bubbles are usually accompanied by what he calls ‘the four most dangerous words in economics’: “This time it’s different!” (If you still believe that, I have a rental property in Arizona I’d like to sell you.)
- We need to stop watching what Wall Street does, and looking to the stock market as a barometer of things to come. I’ve already resolved: no more reading the Wall Street Journal in the morning. Published at ground zero of the economic collapse, it’s immersed in its own toxic habitat of doom and gloom. He called equity markets “the thirteen year old daughter of the economy”—in other words, major drama queens. He quoted a Wall Street financial advisor, who proclaimed late last year that “there are two positions out there—cash, and fetal.” Do we really want to believe this? If we’re to succeed in this climate, we have to make our own weather (see my previous blog on this subject!)
- It’s never as good as you think, and it’s never as bad as you think. Consumer and business sentiment has rocketed from denial (the party is never going to end; the housing market is going to have a soft landing) to abject hysteria (the US economy has forever lost its mojo, and we’ll be a bit player on the world stage going forward, a new Dark Age is beginning, etc.) A couple of years back, Thornberg was one of a few lonely Bears, a party pooper derided for his predictions of financial mayhem and a disastrous real estate crash. Interestingly, he’s now a Bull--while most everyone else is rending their garments and sprinkling ashes on their heads.
- This is not your mother’s Depression. Thornberg scoffs at the notion that we are heading into a depression. However, he’s unstinting in his description of the fine mess we’re in: the worst recession since World War II. As he says, “It’s a normal very bad recession.” His estimate: two more years of hard slogging.
- Unemployment is a lagging indicator. The layoffs that are happening now are not predictors of the future, but symptoms of excesses the past. Companies are finally shedding jobs in response to the falloff in demand for their goods and services. Another great reason not to listen to CNN, MSNBC, etc., while getting ready for work!
- The majority of the drop in consumer spending has happened in the automotive sector and in the decline in the price of gas. (Maybe a reporter will throw that in at the end of the story, but it won’t be the lead.) Services are selling better than products. My controller Roxanne showed me a newspaper story with a graph the other day showing how badly sales had dropped during the 2008 holiday season from 2007. The dropoff was downright dizzying—til you looked more closely at the chart and saw the graph was calibrated in hundredths of percentage points. With all the finger pointing going on right now about “who’s to blame,” it’s amazing to me that the media does not recognize their role in throwing gas on the flames. Granted, we do know that the luxury sector, which lagged behind others in going off the cliff, finally caught up with a startling 35% decline during the holiday season. (Hey, what do we expect for calling the super-affluent demographic “recession proof”?)
- Our national obsession with stopping foreclosures overlooks a very important fact: people shouldn’t keep homes they can’t afford. Foreclosures are just a symptom of the overconsumption that drove this meltdown. Thornberg says simply, “Foreclosures are not necessarily bad for the economy.” To put it in terms business can relate to, once people stop throwing 70% of their income at their mortgage, they can afford to buy other stuff. Of the credit damage that is occurring to many consumers, another businessperson I know remarked, “A couple of years from now, it’ll just be like having a tattoo: a mistake a lot of us made in our past.”
- Bank consolidation ( failure) is going to be a fact of life. 8000 banks will become 4000, says Thornberg. If you have more than $250,000 in a small bank, get it out of there, is his advice. The words “bank failure” strike terror into our hearts, since this phrase is inextricably linked in our minds to the Great Depression. But bank consolidation is inevitable. It will take another two years for all the bankrupt banks to admit that they’re broke. California, says, Thornberg, is filled with these walking-dead “zombie banks.”
- Our concern with ‘what the banks did with our TARP money’ and politicians’ desire for strict accounting demonstrates our and their lack of understanding of how banks work. “It’s like pouring a quart of water into a bucket that’s half full and asking, ‘where did our water go?” Bank lending is down in large part to a decline in demand. Businesses are not expanding right now; they’re shrinking. You don’t borrow money to shrink. That is, unless, you’re broke. And banks aren’t lending to companies that are broke (any more.)
- When banks tighten up lending, the Fed can print more money and put it into the supply. When banks loosen lending practices, the Fed pulls money back out of circulation. (We hope!) Thornberg says banks are still lending money, but not making risky loans. He gave the example of a builder he recently sat next to on a plane. The builder was lamenting the lack of financing for his projects, yet he refused to pay a higher interest rate, inject more than 7% of his own money into a project, or sign a personal guarantee. This may be how it was working a couple of years ago, but not any more. Businesses have to shoulder more risk.
- “We’re on the back end of a twelve year bender and we’re waking up with the mother of all hangovers.” The good news to me here is that, in the words of the twelve-step world, we’ve admitted we have a problem. If we successfully complete our economic rehab program, Thornberg sees positive growth in the second half of 2010. That program should include middle class tax cuts, he says, and helping people save more by spending less. It wasn’t that long ago that the savings rate in the US was 10%. In the past few years, we stopped saving, and developed a real talent for living beyond our means.
- Consumer and business weakness will continue for awhile, though some businesses should see growth by the fourth quarter of this year. Remember, we’ve been in this recession for awhile. It’s not just starting. And one of the few ‘laws of gravity’ in economics is that recovery is inevitable—the market digests its mistakes and slowly gets healthier. But for many of us operating businesses, it’s a grueling test to see who will survive.
- This is the time to look for opportunity. For example, falling home prices mean that those of us with California companies can compete for workers with the rest of the country. There’s been a huge exodus of talent from our state because of the high cost of housing. There’s also opportunity awaiting us in the shakeout, which will correct market saturation. Let’s face it; the country has a few too many spas and spa vendors. I hate to say it, but every time I’ve hit the trade show floor lately I wonder to myself, “Can all these companies possibly be necessary?” Our abundance-loving culture makes it hard to admit such un-Kumbaya thoughts, but we’ll be a healthier industry when we have healthier players. In the meantime, hunker down and renegotiate everything. Have a lease? You may be surprised at your landlord’s willingness to lower it if you commit to a new, longer term. Push back when vendors raise prices.
- Cash is king; if you’ve got it, your company will have the opportunity to buy competitors’ assets for fire sale prices. (See: Warren Buffet. In fact, see his new biography, Snowball. You’ll see as you read it that now is the time to build your empire. If you’d rather not tackle this massive book, which chronicles such fascinating details as the type of packaged snacks he enjoys, just head to the children’s section in the bookstore and re-read the Tortoise and the Hare.) There’s even a chance your competitor will suddenly close his doors and a desperate real estate broker will call you with an opportunity to acquire a fully equipped, operational, just-add-water spa—for the cost of rebranding the place. Leasing companies need to keep the lights on and the parking lots full in their shopping centers. A spa owner I know just walked into precisely this opportunity.
I have to say, I found Thornberg’s talk tonight to be refreshing and even encouraging. I think most of us have been paddling around in the murky pool of this recession, wondering how deep it really is. Just experiencing the sensation of your toes touching the bottom is comforting--even if you’re still in over your head!
Tuesday, January 27, 2009
Wednesday, January 7, 2009
High Heals
The new Spa Finder Trend Report, Susie Ellis' excellent overview of industry influences, cites as a key trend the increasing acceptance of "energy work" in spas. On the opposite end of the spectrum, we know that cosmeceutical ingredients and medical aesthetic technologies continue to grow in sophistication. What do these two trends have in common?
At our recent Holiday Client Appreciation Party, we offered an array of free mini spa treatments to our guests. The two most popular "attractions"? An esthetician who was giving Reike facial treatments, and a therapist who specializes in Intuitive Flower Essence Readings.
Now, we're located in the very workaday Silicon Valley. For all our innovations in technology, we are not a terribly adventurous lot. (We're not Marin County. We wear sensible shoes and carefully sanitize our yoga mats.)
Cosmeceutical and medical spa innovations appeal to the client who wants to receive profound benefits from their self-care investment. Energy work is sought out by clients who want to go beyond the basic spa benefit of relaxation. But within these very different modalities, there's a common thread, and that's healing. We may not think of aesthetic medical procedures as healing, but the end result is repaired self esteem. That's emotional healing.
These distinctions may seem like semantics, but they are actually clues to your clients' deeper needs, the kind of needs that will motivate them to spend discretionary income during a severe recession.
The rules of the game have changed. Clients still want--more than ever--what we have to offer. But to justify their choices, the benefits they receive from spa services must be unassailable. How effective are you at articulating the benefits of what you offer?
Because your clients must take their cue from you: they need to be able to explain why they do what they do. They will have to make a case for their choices to family members, friends, colleagues. "I'm worth it!" just doesn't cut in the the cold light of 2009. Why is your spa worth it?
Have you retooled your marketing copy to bring it into alignment with the newly sober mood of today's consumer? (Hint: "indulgence," "luxury," "exclusivity" are soooo 2008!)I can't emphasize enough the importance of relanguaging the spa experience, not just in your brochure or website, but for your employees. We can't win the new game playing by yesterday's rules, or with yesterday's scripts.
Most spas have understood for years that at the heart of what we do is healing. We may have lesser or greater degrees of comfort with that concept. But during a year when everyone is "hurting," healing is one of very few activities everyone can justify.
Another deep need that spas have almost unwittingly found themselves meeting is consumers' craving for fostering deeper connections and more meaningful relationships with special people in their lives. Where do you foster this sort of connection? Perhaps over a cup of coffee at Starbucks, but also, particularly during special occasions, within the sanctuary provided by spas. The notion of spa-as-sanctuary is hardly new (as evidenced by the number of spas bearing this name or a version of it.) But the reason for seeking sanctuary now is not just about zoning out in splendid isolation--increasingly, it's about finding the ideal environment for enjoying quality time with friends and family. ("Girlfriend Getaways" were one of the few categories of travel that grew last year.)
American consumer culture has turned a page. To find our place in this unfamiliar new story, spas must make sure we remain relevant. And that relevance comes from meeting our clients' needs for healing, meaning, and connection.
At our recent Holiday Client Appreciation Party, we offered an array of free mini spa treatments to our guests. The two most popular "attractions"? An esthetician who was giving Reike facial treatments, and a therapist who specializes in Intuitive Flower Essence Readings.
Now, we're located in the very workaday Silicon Valley. For all our innovations in technology, we are not a terribly adventurous lot. (We're not Marin County. We wear sensible shoes and carefully sanitize our yoga mats.)
Cosmeceutical and medical spa innovations appeal to the client who wants to receive profound benefits from their self-care investment. Energy work is sought out by clients who want to go beyond the basic spa benefit of relaxation. But within these very different modalities, there's a common thread, and that's healing. We may not think of aesthetic medical procedures as healing, but the end result is repaired self esteem. That's emotional healing.
These distinctions may seem like semantics, but they are actually clues to your clients' deeper needs, the kind of needs that will motivate them to spend discretionary income during a severe recession.
The rules of the game have changed. Clients still want--more than ever--what we have to offer. But to justify their choices, the benefits they receive from spa services must be unassailable. How effective are you at articulating the benefits of what you offer?
Because your clients must take their cue from you: they need to be able to explain why they do what they do. They will have to make a case for their choices to family members, friends, colleagues. "I'm worth it!" just doesn't cut in the the cold light of 2009. Why is your spa worth it?
Have you retooled your marketing copy to bring it into alignment with the newly sober mood of today's consumer? (Hint: "indulgence," "luxury," "exclusivity" are soooo 2008!)I can't emphasize enough the importance of relanguaging the spa experience, not just in your brochure or website, but for your employees. We can't win the new game playing by yesterday's rules, or with yesterday's scripts.
Most spas have understood for years that at the heart of what we do is healing. We may have lesser or greater degrees of comfort with that concept. But during a year when everyone is "hurting," healing is one of very few activities everyone can justify.
Another deep need that spas have almost unwittingly found themselves meeting is consumers' craving for fostering deeper connections and more meaningful relationships with special people in their lives. Where do you foster this sort of connection? Perhaps over a cup of coffee at Starbucks, but also, particularly during special occasions, within the sanctuary provided by spas. The notion of spa-as-sanctuary is hardly new (as evidenced by the number of spas bearing this name or a version of it.) But the reason for seeking sanctuary now is not just about zoning out in splendid isolation--increasingly, it's about finding the ideal environment for enjoying quality time with friends and family. ("Girlfriend Getaways" were one of the few categories of travel that grew last year.)
American consumer culture has turned a page. To find our place in this unfamiliar new story, spas must make sure we remain relevant. And that relevance comes from meeting our clients' needs for healing, meaning, and connection.
Wednesday, December 17, 2008
The Power of 100
5 x 5 x 4 is an equation I like to share with aspiring spa professionals, and the people who hire them. This formula represents the foundation of a successful practice as a spa professional, be it esthetician or massage therapist: five days, five clients per day, four weeks per month = 100 regular clients.
For the sharp-eyed among you, that missing .33 weeks per month offsets the impact of time away from the job, paid and unpaid, here calculated as "only" four weeks a year—a conservative sum: see my earlier blog on the surprising pitfalls of sales budgeting.
This formula is the lifeblood of spas who cater to a repeat clientele: day spas, medical spas, and urban hotel spas whose regular guests include locals and business travelers. It is an unapologetically simplistic formula, but as a rule of thumb it works pretty well. At about 100 “regular request” clients, a spa professional reaches stability and success. Their practice isn’t full to bursting, which means there is additional earning potential. But they’re productive and prosperous.
Why is this number important? Because very few spa professionals actually have or use specific performance goals, which is the best way to gauge progress. If you knew that you needed to secure 100 happy and loyal clients, averaging a visit every month (some will come more often, some less) how do you behave? How do you prioritize your day?
For serious professionals, your thinking changes from the passive “what’s on my schedule today?” to the active “where are my clients—past, present, and future—right now, and how can I get them, and keep them, on my schedule?”
If you know you need 100 regular clients, you build a roster, quite literally—as in, you write them down and make notes about them, like any self respecting sales professional would. You record the names and preferences and needs of regulars-to-be and cultivate them—and their referrals--with tender loving care. This is not simply about chatting Mrs. Henderson up during her visits and asking after the daughter at USC. It’s about consciously creating a spa care program so beneficial to Mrs. Henderson that she wouldn’t seriously consider going elsewhere for her treatments. Even if someone hands her a gift certificate. Which they will.
The first time I won the gift certificate acid test against another spa’s unwitting, anonymous esthetician was 1985. The new guest came in out of social duty to the girlfriend who’d given her a gift certificate to my spa. She began by telling me in friendly but firm terms that she really liked “the girl” who had been giving her facial treatments. Whenever someone uses this vaguely anachronistic, pink-collar phrase, which I still hear around spas, I know we’ve got a new client in the making. It tells me that “The Girl” is simply a beautician, performing what we used to call “beauty operations” in the no-frills school I attended in the early 80’s. “The Guy,” her male counterpart, may be a masseur, (a term always uttered with uncertainty and awkwardness, and usually with the wrong gender) whose skill set is not quite something we’d describe as massage therapy. All snobbery aside, these folks may be well-intentioned and committed, in their own way, to the work. They are skilled enough to deliver a service that encourages a customer to return.
But customers fall into the hands of a truly committed professional, the scales fall from their eyes. The customer turns into a client. They adhere. That is, if the professional cultivates them properly. Making sure a client “sticks” to you requires a simple process. Commitment cannot just be to the craft (“I love being an esthetician!”) but to collecting and tending clients (“I love taking care of my clients.”)
Back to my gift certificate client. At the end of our hour together, she said with genuine surprise, “You know, I really like The Girl who gives me my facials. But we usually talk about our kids and our husbands. I learned so much today.” And at my invitation, she promptly rescheduled, coming for treatments with me for many years, until she moved from the area to retire. Her teenage daughter became a regular guest as well. I never forgot the lesson she taught me that day—and her comments became the basis of two of the principles of Selvice, the Wynne Business sales and service philosophy: “Create Compelling Solutions” and “Make it Fresh Daily.”
Most customers enjoy friendly banter with their service provider, but they don’t need to pay us $100 an hour and more for friendship (we hope.) Still, a client who has never experienced a game-changing treatment—the astonishingly effective massage, the transporting facial--may not even know that such a possibility exists. Value is created when we solve big problems for our clients: we unfreeze the frozen shoulder, we clear the erupting skin, or we elevate their self esteem through our graciousness, respect, warmth and unflagging attention. These are compelling benefits, valuable ones, and they bring the clients back to us. Even when times are tough.
Once we’ve made progress on the initial set of problems, the ones they “present” with, we can’t go onto autopilot. There are always other interesting issues to mine and improvements to make. You’ve got their trust and confidence now; it’s time to expand the scope of the program and introduce them to outcomes and benefits they may not have known existed. Like explorers, the best spa therapists continuously seek new ways to create value for the guest—we make it fresh daily, treating them with the same focus that we would the new guest, each time we see them. A great spa treatment program is a bit of a never-ending story, with new and wonderful benefits that continuously unfold. This requires that spa therapists keep eyes and ears open and don’t become one-trick ponies. The industry is full of reasonably skilled folks that stopped learning the day they left school. They (or their clients) eventually wither away from boredom.
I used to go through a ritual before I saw my last client of the day: I would clean, detail and re-set my treatment room as I would for the first client, misting it with some lavender and peppermint, smoothing the sheets with extra care, re-energizing the space. I never wanted a guest to feel that I gave anything less for my final client of the day than my first. I never allowed myself to get loose and lazy and overly casual, as some service providers tend to do when the end of the day is in sight.
In times as challenging as these, spas must once again get serious about benefits. Chocolate treatments and Margarita scrubs will still probably find a place on resort spa menus, but I’d be willing to bet that there is not much in the way of a steady “chocolate clientele.” (Forgive me if I’m wrong, devoted chocolate therapists.) Compelling value is about healing, pure and simple. That is the watchword for clientele building in this brave new year.
The sales profesional you see four times a year when she is in town for her company’s quarterly business review should be called, coddled, cultivated as if she lived ten minutes down the road. The client who lives ten minutes down the road should feel like family. (Well, an idealized form of family: one of the great charms of spa visits is that you are treated far better in our establishments than you ever would be by your spouse, your offspring, or any actual members of your family.) This is just as much a part of the job as understanding how to release tension in a client’s SCM or properly extract millia.
The spa therapist who is loathe to pick up the phone and check on a new client within a couple of days of their first visit will never amass the magic 100. The great irony of the trade is that many spa therapists are actually very shy individuals who are happiest interacting with silent, prone people whose eyes are shut. Take them out of the treatment room and ask them to have a conversation with a guest and they blink like owls in daylight, shifting awkwardly in the open and itching to return to the safety of their dim caves. The challenge is that the work of client-building happens, not just during the treatment, but in those conversations and interactions before and after the service.
To get your 100, you have to ask for it. This is what we call in Selvice “Extend the Invitation,” and it’s the bit everyone thinks they can omit if they’re good enough. Not true. I’ve seen modestly talented individuals enjoy great careers because they obey this law, and great talents fail spectacularly because they think (or hope) they are exempt.
Spa operators can help bridge this gap by providing, at critical touchpoints, superior customer service professionals, but counting on this as your primary strategy is risky. While you will always have gems, support teams are famously understaffed and turn over more quickly than other departments. As a 25 year spa operator I wish this weren’t so, but it seems to be one of those natural laws of the industry that we “work around”. The one reliable strategy is teamwork, lots of coaching (much of it positive—catching people doing things right), and a willingness to make clientele-building, if that’s your business model, a non-negotiable behavior.
But here is the most encouraging part of the Law of 100. If we assume a spa professional is at work 50 weeks a year (which is the basic agreement, though we know we usually fall short) they simply have to retain two clients a week to collect their 100 clients in the course of just one year.
Ask just about any spa therapist if they think they can hang onto two of the people they see in a week—that is, reschedule them before they leave--maybe even sell them a series--and most of them will say that this is reasonable and probably doable. As a point of pride, it’s hard for anyone with even a modicum of self confidence to admit otherwise. In fact, it’s tantamount to saying “fire me now!” for someone to bemoan the difficulty of snagging two return clients each week.
For your part, as a spa operator, you can provide a nice incentive for the guest to reschedule before leaving. Having a bit of “bait” in the form of an upgrade--please, no discounts, unless for a series purchase--bolsters the spa therapist’s confidence. It’s a conversation starter. It makes them feel better about their invitation.
The flood of new clients that follows the holiday gift season next month will provide plenty of guests who may not, like my long-ago client, even know they’re in the market for a new massage therapist or esthetician. It will also deliver people who have never even had a spa service at all. These prospects all have needs, concerns, hopes, frustrations. They don’t know what we can do for them. It’s our job to gently winnow those needs out and provide compelling solutions.
Don’t tell me she’s simply here to “relax,” and that’s why you didn’t attempt to reschedule her! Why does she need to relax? Did you find out? Do you know exactly what “relax” means to her? People spend tremendous amounts of money to “relax.” (See: Hawaii—a place she may not be going this January.)
Two per week. A lovely, bite-sized goal that will set your therapists on the road to 5 x 5 x 4 and their first 100.
There is an especially happy epilogue to my gift-poached client tale. Not long ago I was on an industry tour of the Wynn Spa in Las Vegas (the only thing I have that Steve Wynn doesn’t is an “e” at the end of my name.) As we entered the beautiful facility, I was introduced to the lead esthetician, a lovely young lady who looked awfully familiar. She recognized me as her and her mother’s long-ago esthetician. Not only had that day led to a long and happy client relationship, the facial treatmeants that she received had also sparked the daughter’s interest in a spa career.
The only thing more rewarding than creating a new client is creating a new spa professional from a client. That’s a gift that keeps on giving.
For the sharp-eyed among you, that missing .33 weeks per month offsets the impact of time away from the job, paid and unpaid, here calculated as "only" four weeks a year—a conservative sum: see my earlier blog on the surprising pitfalls of sales budgeting.
This formula is the lifeblood of spas who cater to a repeat clientele: day spas, medical spas, and urban hotel spas whose regular guests include locals and business travelers. It is an unapologetically simplistic formula, but as a rule of thumb it works pretty well. At about 100 “regular request” clients, a spa professional reaches stability and success. Their practice isn’t full to bursting, which means there is additional earning potential. But they’re productive and prosperous.
Why is this number important? Because very few spa professionals actually have or use specific performance goals, which is the best way to gauge progress. If you knew that you needed to secure 100 happy and loyal clients, averaging a visit every month (some will come more often, some less) how do you behave? How do you prioritize your day?
For serious professionals, your thinking changes from the passive “what’s on my schedule today?” to the active “where are my clients—past, present, and future—right now, and how can I get them, and keep them, on my schedule?”
If you know you need 100 regular clients, you build a roster, quite literally—as in, you write them down and make notes about them, like any self respecting sales professional would. You record the names and preferences and needs of regulars-to-be and cultivate them—and their referrals--with tender loving care. This is not simply about chatting Mrs. Henderson up during her visits and asking after the daughter at USC. It’s about consciously creating a spa care program so beneficial to Mrs. Henderson that she wouldn’t seriously consider going elsewhere for her treatments. Even if someone hands her a gift certificate. Which they will.
The first time I won the gift certificate acid test against another spa’s unwitting, anonymous esthetician was 1985. The new guest came in out of social duty to the girlfriend who’d given her a gift certificate to my spa. She began by telling me in friendly but firm terms that she really liked “the girl” who had been giving her facial treatments. Whenever someone uses this vaguely anachronistic, pink-collar phrase, which I still hear around spas, I know we’ve got a new client in the making. It tells me that “The Girl” is simply a beautician, performing what we used to call “beauty operations” in the no-frills school I attended in the early 80’s. “The Guy,” her male counterpart, may be a masseur, (a term always uttered with uncertainty and awkwardness, and usually with the wrong gender) whose skill set is not quite something we’d describe as massage therapy. All snobbery aside, these folks may be well-intentioned and committed, in their own way, to the work. They are skilled enough to deliver a service that encourages a customer to return.
But customers fall into the hands of a truly committed professional, the scales fall from their eyes. The customer turns into a client. They adhere. That is, if the professional cultivates them properly. Making sure a client “sticks” to you requires a simple process. Commitment cannot just be to the craft (“I love being an esthetician!”) but to collecting and tending clients (“I love taking care of my clients.”)
Back to my gift certificate client. At the end of our hour together, she said with genuine surprise, “You know, I really like The Girl who gives me my facials. But we usually talk about our kids and our husbands. I learned so much today.” And at my invitation, she promptly rescheduled, coming for treatments with me for many years, until she moved from the area to retire. Her teenage daughter became a regular guest as well. I never forgot the lesson she taught me that day—and her comments became the basis of two of the principles of Selvice, the Wynne Business sales and service philosophy: “Create Compelling Solutions” and “Make it Fresh Daily.”
Most customers enjoy friendly banter with their service provider, but they don’t need to pay us $100 an hour and more for friendship (we hope.) Still, a client who has never experienced a game-changing treatment—the astonishingly effective massage, the transporting facial--may not even know that such a possibility exists. Value is created when we solve big problems for our clients: we unfreeze the frozen shoulder, we clear the erupting skin, or we elevate their self esteem through our graciousness, respect, warmth and unflagging attention. These are compelling benefits, valuable ones, and they bring the clients back to us. Even when times are tough.
Once we’ve made progress on the initial set of problems, the ones they “present” with, we can’t go onto autopilot. There are always other interesting issues to mine and improvements to make. You’ve got their trust and confidence now; it’s time to expand the scope of the program and introduce them to outcomes and benefits they may not have known existed. Like explorers, the best spa therapists continuously seek new ways to create value for the guest—we make it fresh daily, treating them with the same focus that we would the new guest, each time we see them. A great spa treatment program is a bit of a never-ending story, with new and wonderful benefits that continuously unfold. This requires that spa therapists keep eyes and ears open and don’t become one-trick ponies. The industry is full of reasonably skilled folks that stopped learning the day they left school. They (or their clients) eventually wither away from boredom.
I used to go through a ritual before I saw my last client of the day: I would clean, detail and re-set my treatment room as I would for the first client, misting it with some lavender and peppermint, smoothing the sheets with extra care, re-energizing the space. I never wanted a guest to feel that I gave anything less for my final client of the day than my first. I never allowed myself to get loose and lazy and overly casual, as some service providers tend to do when the end of the day is in sight.
In times as challenging as these, spas must once again get serious about benefits. Chocolate treatments and Margarita scrubs will still probably find a place on resort spa menus, but I’d be willing to bet that there is not much in the way of a steady “chocolate clientele.” (Forgive me if I’m wrong, devoted chocolate therapists.) Compelling value is about healing, pure and simple. That is the watchword for clientele building in this brave new year.
The sales profesional you see four times a year when she is in town for her company’s quarterly business review should be called, coddled, cultivated as if she lived ten minutes down the road. The client who lives ten minutes down the road should feel like family. (Well, an idealized form of family: one of the great charms of spa visits is that you are treated far better in our establishments than you ever would be by your spouse, your offspring, or any actual members of your family.) This is just as much a part of the job as understanding how to release tension in a client’s SCM or properly extract millia.
The spa therapist who is loathe to pick up the phone and check on a new client within a couple of days of their first visit will never amass the magic 100. The great irony of the trade is that many spa therapists are actually very shy individuals who are happiest interacting with silent, prone people whose eyes are shut. Take them out of the treatment room and ask them to have a conversation with a guest and they blink like owls in daylight, shifting awkwardly in the open and itching to return to the safety of their dim caves. The challenge is that the work of client-building happens, not just during the treatment, but in those conversations and interactions before and after the service.
To get your 100, you have to ask for it. This is what we call in Selvice “Extend the Invitation,” and it’s the bit everyone thinks they can omit if they’re good enough. Not true. I’ve seen modestly talented individuals enjoy great careers because they obey this law, and great talents fail spectacularly because they think (or hope) they are exempt.
Spa operators can help bridge this gap by providing, at critical touchpoints, superior customer service professionals, but counting on this as your primary strategy is risky. While you will always have gems, support teams are famously understaffed and turn over more quickly than other departments. As a 25 year spa operator I wish this weren’t so, but it seems to be one of those natural laws of the industry that we “work around”. The one reliable strategy is teamwork, lots of coaching (much of it positive—catching people doing things right), and a willingness to make clientele-building, if that’s your business model, a non-negotiable behavior.
But here is the most encouraging part of the Law of 100. If we assume a spa professional is at work 50 weeks a year (which is the basic agreement, though we know we usually fall short) they simply have to retain two clients a week to collect their 100 clients in the course of just one year.
Ask just about any spa therapist if they think they can hang onto two of the people they see in a week—that is, reschedule them before they leave--maybe even sell them a series--and most of them will say that this is reasonable and probably doable. As a point of pride, it’s hard for anyone with even a modicum of self confidence to admit otherwise. In fact, it’s tantamount to saying “fire me now!” for someone to bemoan the difficulty of snagging two return clients each week.
For your part, as a spa operator, you can provide a nice incentive for the guest to reschedule before leaving. Having a bit of “bait” in the form of an upgrade--please, no discounts, unless for a series purchase--bolsters the spa therapist’s confidence. It’s a conversation starter. It makes them feel better about their invitation.
The flood of new clients that follows the holiday gift season next month will provide plenty of guests who may not, like my long-ago client, even know they’re in the market for a new massage therapist or esthetician. It will also deliver people who have never even had a spa service at all. These prospects all have needs, concerns, hopes, frustrations. They don’t know what we can do for them. It’s our job to gently winnow those needs out and provide compelling solutions.
Don’t tell me she’s simply here to “relax,” and that’s why you didn’t attempt to reschedule her! Why does she need to relax? Did you find out? Do you know exactly what “relax” means to her? People spend tremendous amounts of money to “relax.” (See: Hawaii—a place she may not be going this January.)
Two per week. A lovely, bite-sized goal that will set your therapists on the road to 5 x 5 x 4 and their first 100.
There is an especially happy epilogue to my gift-poached client tale. Not long ago I was on an industry tour of the Wynn Spa in Las Vegas (the only thing I have that Steve Wynn doesn’t is an “e” at the end of my name.) As we entered the beautiful facility, I was introduced to the lead esthetician, a lovely young lady who looked awfully familiar. She recognized me as her and her mother’s long-ago esthetician. Not only had that day led to a long and happy client relationship, the facial treatmeants that she received had also sparked the daughter’s interest in a spa career.
The only thing more rewarding than creating a new client is creating a new spa professional from a client. That’s a gift that keeps on giving.
Saturday, November 1, 2008
The Kindest Cuts
We'd all like to sell our way out of a downturn, but the fact is, it's time to make some hard decisions and begin cutting expenses. There are a few questions to ask yourself when contemplating spending money:
1. Is this a "nice to have" or a "have to have" item or expense?
2. Does it "touch" the client (literally or experientially)? It is not worth keeping a frayed or stained robe in circulation to save a few bucks. Protecting your reputation is, as they say, "priceless!"
3. Will a cutback in this area seriously damage employee morale? It's inevitable you'll have to reduce spending in areas that affect employees. But make sure they know you are working hard to protect their core compensation and benefits.
You've probably already started on your "low hanging fruit" cuts. Here are some ideas that may be further up the tree.
1. Reduce your inventory. Identify the SKU's that make up the lowest 20% of product sales by dollar volume. Get rid of them. If you've sold less than ten of any product this year (unless it's a new product or very high ticket) get rid of it. Put these discontinued items on sale at a deep discount and wring the cash out of them. Try to get your annual inventory turns up to six, across the board.
2. Look at ways to make your support team schedule more efficient. Can a salaried manager step in for a couple of hours to cover lunch breaks, preventing you from having to bring in a staffer early or keep them late? Do you have to stay open as late as you do now? Not all reduction in operating hours makes sense. If your revenue production staff is paid by the treatment, you have just support staff overhead expense. Often just a couple of additional treatments will warrant keeping the spa open. It's important to have a "big net" to catch potential clients these days. Reducing hours may hurt more than help.
3. Look at employee perks. We're having to suspend a longtime perk, a free monthly employee treatment voucher. In its place we're putting a more liberal treatment "trade" policy and a way for employees to continue to enjoy treatments at a deep discount. Will it be a hit to morale? Somewhat. But we think we can show that there will still be plenty of opportunities to experience treatments. We've primed our team that "business as usual" is over.
4. Reduce training wages. Employee training is a big line item in many spas. Yet good training is generally perceived as a big perk for spa employees. What they learn in your spa is often a "portable" or resume-enhancing skill. We've dropped our hourly rate for training from $10 to $8.
5. Reduce the number of services on your menu. In a recent meeting with the team, estheticians suggested that we cut out three seldom-performed protocols which used a total of 13 products, none of which we're re-ordering.
6. Rework your protocols to use fewer supplies. If you use a laundry service, you pay by the piece. Lavish use of hot towels is typical in many spas--you can probably cut back without impacting the quality of the service. Create awareness of towel-use expense--post a humorous sign on the topic. Make sure no one is pulling a towel when they need a dust rag! Even a 10% reduction in linen consumption can make a noticeable difference in the bottom line.
7. Control the use of costly back bar. Even without a formal dispensary system, you can require estheticians to check out expensive peels and other high end supplies. Avant Garde spa in the San Francisco Bay Area recently instituted kits for all esthetic supplies save the basics (like cleanser and toner.) All masks, peels, creams, ampoules, etc. are dispensed to esthetician's individual kits. The sales reports must sync up with the products used. Unfortunately, during downturns, employees often give away upgrades on the sly to boost their tips, much like a bartender giving away a free drink. Avant Garde's owner Blanca Caballero reports savings of close to $1,000 per month on esthetic backbar costs.
8. For spas that have their own hot water systems, switch to an on-demand hot water heater. It will pay for itself very quickly in reduced utility bills--and you won't be as likely to run out of hot water.
9. During downturns, fingers can get sticky. Install a web-based security camera system that you can monitor from wherever you are. A decent system will run about $1,500, an investment with a fast return.
10. Outsource HR duties and payroll to a PEO (professional employment organization.) We've just started with a company called Avitus Group, a Montana based PEO, and are thrilled with the level of service. We tried the same with Paychex a couple of years ago and were disappointed. Payroll companies are increasingly trying to "bolt on" this type of service. However, it's the core business for Avitus and it shows. Our amazing HR rep says he's available by phone 24/7 and--guess what?--he is! Now Avitus is handling time-and-energy-draining activities like work comp claims, enrolling former employees in COBRA, or handling family leave. That leaves us free to concentrate on delighting our customers.
11. For newer spas, if you're doing a pay-per-click marketing campaign like Google Adwords, get professional help. While Google Adwords seems foolproof, and seems to be set up for the amateur user, mistakes are expensive!! It's estimated that 30% of the money spent on these campaigns is wasted. A couple of hours with a good PPC consultant is well worth the money. Like any other online marketing, PPC has gotten a lot more complex and sophisticated. Click fraud pales in comparison to simple keyword choice errors. (Need a PPC consultant? Contact David Victor, dv@acceleratoret.com)
12. Does your spa offer guests Points and rewards for their referrals, spending, etc.? To maximize cash flow, you may want to encourage them to defer use of their Points until next year, when sales may be stronger. (Fingers crossed) We've created the Sweethearts Club, enabling guests to bank their Points for Valentines gift cards, when we will redeem them at double the value.
13. Save money by moving more of your marketing online. Be sure to monitor your online reviews and "work" sites like Yelp for maximum exposure. Contact negative reviewers and treat them as you would a client who calls and complains. Don't demand a rewrite if a guest returns for a redo; the guest usually amends their comments of their own volition. Your review site appearances improve your search engine ranking. Solicit clients to post reviews on Yelp or Citysearch by including a link in your online newsletter.
14. Scale back the employee holiday party. Make it pot luck. Everyone knows times are tough. Make it fun, but don't feel obligated to keep up appearances with a fancy event you can't afford. If you're still doing an event at a restaurant, make it a weekday brunch rather than an evening event. They're shorter, don't involve alcohol, and usually don't attract guests. We have a "Wynnie Awards" ceremony with ours to recognize exceptional team members.
15. Some of the best ideas for saving money will come from your staff. Spa employees know how to be thrifty. Tap into that resourcefulness with a big, shiny new suggestion box in the employee area. Recognize everyone who participates and celebrate the ideas you're implementing.
Remember, the mantra is, "Is it a 'have to have' or 'nice to have'?" Remind your team, when they protest this or that change, that the mindset that worked in the past won't work in the future. Spa folk are not risk takers and they tend to dislike change. Helping them see that it's riskier to not change will encourage their participation and cooperation.
Have more cost saving ideas? Please share them with our readers!
1. Is this a "nice to have" or a "have to have" item or expense?
2. Does it "touch" the client (literally or experientially)? It is not worth keeping a frayed or stained robe in circulation to save a few bucks. Protecting your reputation is, as they say, "priceless!"
3. Will a cutback in this area seriously damage employee morale? It's inevitable you'll have to reduce spending in areas that affect employees. But make sure they know you are working hard to protect their core compensation and benefits.
You've probably already started on your "low hanging fruit" cuts. Here are some ideas that may be further up the tree.
1. Reduce your inventory. Identify the SKU's that make up the lowest 20% of product sales by dollar volume. Get rid of them. If you've sold less than ten of any product this year (unless it's a new product or very high ticket) get rid of it. Put these discontinued items on sale at a deep discount and wring the cash out of them. Try to get your annual inventory turns up to six, across the board.
2. Look at ways to make your support team schedule more efficient. Can a salaried manager step in for a couple of hours to cover lunch breaks, preventing you from having to bring in a staffer early or keep them late? Do you have to stay open as late as you do now? Not all reduction in operating hours makes sense. If your revenue production staff is paid by the treatment, you have just support staff overhead expense. Often just a couple of additional treatments will warrant keeping the spa open. It's important to have a "big net" to catch potential clients these days. Reducing hours may hurt more than help.
3. Look at employee perks. We're having to suspend a longtime perk, a free monthly employee treatment voucher. In its place we're putting a more liberal treatment "trade" policy and a way for employees to continue to enjoy treatments at a deep discount. Will it be a hit to morale? Somewhat. But we think we can show that there will still be plenty of opportunities to experience treatments. We've primed our team that "business as usual" is over.
4. Reduce training wages. Employee training is a big line item in many spas. Yet good training is generally perceived as a big perk for spa employees. What they learn in your spa is often a "portable" or resume-enhancing skill. We've dropped our hourly rate for training from $10 to $8.
5. Reduce the number of services on your menu. In a recent meeting with the team, estheticians suggested that we cut out three seldom-performed protocols which used a total of 13 products, none of which we're re-ordering.
6. Rework your protocols to use fewer supplies. If you use a laundry service, you pay by the piece. Lavish use of hot towels is typical in many spas--you can probably cut back without impacting the quality of the service. Create awareness of towel-use expense--post a humorous sign on the topic. Make sure no one is pulling a towel when they need a dust rag! Even a 10% reduction in linen consumption can make a noticeable difference in the bottom line.
7. Control the use of costly back bar. Even without a formal dispensary system, you can require estheticians to check out expensive peels and other high end supplies. Avant Garde spa in the San Francisco Bay Area recently instituted kits for all esthetic supplies save the basics (like cleanser and toner.) All masks, peels, creams, ampoules, etc. are dispensed to esthetician's individual kits. The sales reports must sync up with the products used. Unfortunately, during downturns, employees often give away upgrades on the sly to boost their tips, much like a bartender giving away a free drink. Avant Garde's owner Blanca Caballero reports savings of close to $1,000 per month on esthetic backbar costs.
8. For spas that have their own hot water systems, switch to an on-demand hot water heater. It will pay for itself very quickly in reduced utility bills--and you won't be as likely to run out of hot water.
9. During downturns, fingers can get sticky. Install a web-based security camera system that you can monitor from wherever you are. A decent system will run about $1,500, an investment with a fast return.
10. Outsource HR duties and payroll to a PEO (professional employment organization.) We've just started with a company called Avitus Group, a Montana based PEO, and are thrilled with the level of service. We tried the same with Paychex a couple of years ago and were disappointed. Payroll companies are increasingly trying to "bolt on" this type of service. However, it's the core business for Avitus and it shows. Our amazing HR rep says he's available by phone 24/7 and--guess what?--he is! Now Avitus is handling time-and-energy-draining activities like work comp claims, enrolling former employees in COBRA, or handling family leave. That leaves us free to concentrate on delighting our customers.
11. For newer spas, if you're doing a pay-per-click marketing campaign like Google Adwords, get professional help. While Google Adwords seems foolproof, and seems to be set up for the amateur user, mistakes are expensive!! It's estimated that 30% of the money spent on these campaigns is wasted. A couple of hours with a good PPC consultant is well worth the money. Like any other online marketing, PPC has gotten a lot more complex and sophisticated. Click fraud pales in comparison to simple keyword choice errors. (Need a PPC consultant? Contact David Victor, dv@acceleratoret.com)
12. Does your spa offer guests Points and rewards for their referrals, spending, etc.? To maximize cash flow, you may want to encourage them to defer use of their Points until next year, when sales may be stronger. (Fingers crossed) We've created the Sweethearts Club, enabling guests to bank their Points for Valentines gift cards, when we will redeem them at double the value.
13. Save money by moving more of your marketing online. Be sure to monitor your online reviews and "work" sites like Yelp for maximum exposure. Contact negative reviewers and treat them as you would a client who calls and complains. Don't demand a rewrite if a guest returns for a redo; the guest usually amends their comments of their own volition. Your review site appearances improve your search engine ranking. Solicit clients to post reviews on Yelp or Citysearch by including a link in your online newsletter.
14. Scale back the employee holiday party. Make it pot luck. Everyone knows times are tough. Make it fun, but don't feel obligated to keep up appearances with a fancy event you can't afford. If you're still doing an event at a restaurant, make it a weekday brunch rather than an evening event. They're shorter, don't involve alcohol, and usually don't attract guests. We have a "Wynnie Awards" ceremony with ours to recognize exceptional team members.
15. Some of the best ideas for saving money will come from your staff. Spa employees know how to be thrifty. Tap into that resourcefulness with a big, shiny new suggestion box in the employee area. Recognize everyone who participates and celebrate the ideas you're implementing.
Remember, the mantra is, "Is it a 'have to have' or 'nice to have'?" Remind your team, when they protest this or that change, that the mindset that worked in the past won't work in the future. Spa folk are not risk takers and they tend to dislike change. Helping them see that it's riskier to not change will encourage their participation and cooperation.
Have more cost saving ideas? Please share them with our readers!
Monday, October 13, 2008
Leading through the storm
None of us knows what is going to happen to our economy in the coming weeks and months, but one thing is certain. Your team needs your leadership.
Our industry that tends to wish away bad news (Downturn? What downturn?) but we all know that this is not the time for Happy Talk. Your team needs to hear from you. They know things are difficult. They're afraid. They need to believe that you have the confidence and smarts to steer your company through the storm. A recent article in Executive Coach broke it down succinctly. Here are the five steps author Karlin Sloan recommends:
1. Get your story straight.
It's important that you and other managers communicate a unified message. What is our strategy? What actions are we going to take? Why do we feel this will work?
2. Focus on those who are leading the charge under you.
The article admonishes leaders to avoid just "putting nose to the grindstone" and making sure you stay connected to all around you.
"Your first priority should be to get those who work for you to become a unified force," Sloan insists. Sloan also warns against focusing on departing employees (either folks who quit or are laid off) and make sure that you devote energy and time to the ones that remain.
3. Overcommunicate.
"If you don't know what will happen--say that," says Sloan. This is not the time for BS. Similarly, if you don't feel you have anything helpful or encouraging to say--and remain silent--rumors will pop up. A hard truth is better than anything the spa gossip mill will produce. Call a meeting and give a "state of the spa" address.
4. Practice gratitude.
Sloan points out, "When we practice gratitude, it changes our ability to motivate and inspire others." Be grateful for whatever you can, whenever you can. Even if it's getting the ten minute break to eat the lunch you brought from home, or the fact that it's a gorgeous, sunny fall morning. I make sure I visit the operations floor regularly so I can be grateful for our amazing clients, many of whom have been coming to our spa for over twenty years.
5. Use the crisis as an opportunity for learning and growth.
You can also use the crisis to do some of the things you may have wanted to do but were afraid you couldn't pull off--reductions in inventory that you knew were necessary, for example. Or perhaps getting your comp plan revised. When you're not having to be concerned about being the "bad guy" there are many tough decisions that get easier. Here, the economy is the "bad cop."
I would add another vital component for leading during a downturn: doing whatever it takes to keep your "game face" on for your team. You must be the source of strength. This is just as hard as it sounds. Exercise, meditate, sleep enough, eat properly, and oh yeah--get some spa treatments. You're not just training for a marathon, you'll be running one every week.
Another vital part of self care: peer support. Wynne Business started a Spa Leadership Round Table in the Bay Area, with non-competing member spas--but any spa can do it. It's a great way to share ideas and best practices, but it's also wonderful moral support during a crisis. I am also a member of the Entrepreneur's Organization, and I sure look forward to my monthly Forum, a sub-group I belong to, within my chapter. It's especially valuable to get outside the industry for new ideas and new thinking.
Our industry that tends to wish away bad news (Downturn? What downturn?) but we all know that this is not the time for Happy Talk. Your team needs to hear from you. They know things are difficult. They're afraid. They need to believe that you have the confidence and smarts to steer your company through the storm. A recent article in Executive Coach broke it down succinctly. Here are the five steps author Karlin Sloan recommends:
1. Get your story straight.
It's important that you and other managers communicate a unified message. What is our strategy? What actions are we going to take? Why do we feel this will work?
2. Focus on those who are leading the charge under you.
The article admonishes leaders to avoid just "putting nose to the grindstone" and making sure you stay connected to all around you.
"Your first priority should be to get those who work for you to become a unified force," Sloan insists. Sloan also warns against focusing on departing employees (either folks who quit or are laid off) and make sure that you devote energy and time to the ones that remain.
3. Overcommunicate.
"If you don't know what will happen--say that," says Sloan. This is not the time for BS. Similarly, if you don't feel you have anything helpful or encouraging to say--and remain silent--rumors will pop up. A hard truth is better than anything the spa gossip mill will produce. Call a meeting and give a "state of the spa" address.
4. Practice gratitude.
Sloan points out, "When we practice gratitude, it changes our ability to motivate and inspire others." Be grateful for whatever you can, whenever you can. Even if it's getting the ten minute break to eat the lunch you brought from home, or the fact that it's a gorgeous, sunny fall morning. I make sure I visit the operations floor regularly so I can be grateful for our amazing clients, many of whom have been coming to our spa for over twenty years.
5. Use the crisis as an opportunity for learning and growth.
You can also use the crisis to do some of the things you may have wanted to do but were afraid you couldn't pull off--reductions in inventory that you knew were necessary, for example. Or perhaps getting your comp plan revised. When you're not having to be concerned about being the "bad guy" there are many tough decisions that get easier. Here, the economy is the "bad cop."
I would add another vital component for leading during a downturn: doing whatever it takes to keep your "game face" on for your team. You must be the source of strength. This is just as hard as it sounds. Exercise, meditate, sleep enough, eat properly, and oh yeah--get some spa treatments. You're not just training for a marathon, you'll be running one every week.
Another vital part of self care: peer support. Wynne Business started a Spa Leadership Round Table in the Bay Area, with non-competing member spas--but any spa can do it. It's a great way to share ideas and best practices, but it's also wonderful moral support during a crisis. I am also a member of the Entrepreneur's Organization, and I sure look forward to my monthly Forum, a sub-group I belong to, within my chapter. It's especially valuable to get outside the industry for new ideas and new thinking.
Wednesday, August 13, 2008
The Non Revenue Producing Space Odyssey
Non Revenue Producing Space, or amenity space, is evolving. How has your spa, or the spas you work with, changed in recent years? What amenities are customers desiring or requiring in your marketplace? Be sure to share the type of spa you're operating. As part of my preparation for an ISPA talk on this subject, I want to hear the grassroots opinions and ideas from the industry--not necessarily the "party line."
What works for you? What is too costly, in terms of operational wear and tear, or just plain dollars and cents? Do your amenities help you command a superior price point? Are medical spas finding amenities support their core business, or consume precious real estate? Please share your ideas!
What works for you? What is too costly, in terms of operational wear and tear, or just plain dollars and cents? Do your amenities help you command a superior price point? Are medical spas finding amenities support their core business, or consume precious real estate? Please share your ideas!
Monday, August 11, 2008
Staycation Nation
Staycation, Part One.
The “staycation,” America’s stay-at-home vacation trend, is hammering the travel industry this summer. Economic slowdown and the horrors of summer air travel have caused many people to reconsider their plans for long vacations and especially trips abroad. Even affluent consumers are feeling this shift in sensibility; as news reports teem with stories of downtrodden consumers who can’t afford to gas up their cars to go to work, conspicuous consumption has become a bit too…conspicuous. It’s suddenly chic to be sensible. (An added bonus: one can often be “green” and sensible in one fell swoop.)
Europe’s loss may be US spa operators’ gain, however. Guests who previously headed to Tuscany for a couple of weeks are taking “consolation vacations” and treating themselves to spa visits close to home. Not just the odd massage or facial, but a day at the spa, with all the bells and whistles. These “sensible sybarites” are staycationing in your spa. Compared to a $5,000 trip to Fiji, a $500 spa package is a fabulous bargain.
We recognized this phenomenon halfway through the summer, when sales at our Preston Wynne Spa in California’s Silicon Valley jumped 28% from the previous year. Other spa owners began to report similar behavior from their guests.
While I would have loved to be a bit further ahead of the Staycation curve, this trend won’t end with summer. Here are some thoughts about how to market to this customer:
- Staycation guests are receptive to indulgent, all-inclusive spa packages; dust those holiday favorites off, call them “Staycation Specials” and put them front and center in your marketing campaign.
- Provide ideas for other staycation pleasures near your spa; wineries, art galleries or museums, botanical gardens.
- Have a drawing for a “staycation” package at the spa to increase awareness
- Increase awareness by talking about “staycationing” in your marketing and in person, with guests. Concepts like “staycations” grow in popularity when they are recognized and named.
Staycation, Part Two
I decided to “staycation” this summer myself. (Full disclosure: I don’t usually take a vacation in the summertime; I love Europe in September during ‘reentree,” when even Parisians pretend they’re happy to see you.) A summer staycation was a fine excuse for leisure and market research combined.
A spa visit was at the top of my “staycation” must-do list. I scheduled a half day at my spa, something I never do. I am a less than perfect guest at my spa. I rush from a meeting to a pedicure, and then invariably smudge my polish in my sprint to the next meeting. I shoehorn my spa experiences into the small cracks in my schedule.
Not this time! To ensure that I did not sneak into the office afterward, I scheduled dinner at a terrific restaurant in San Francisco. I’m unaware of regulations governing how far one is permitted to travel and still ‘staycation,’ but I’m fairly certain this was legal.
I chose an Ocean Glow (a body treatment that’s a hybrid of exfoliation and wrap), a massage, a facial treatment, and a makeup session. About four hours of services, which my normal state of Business ADD (BADD) would never permit. I wafted about in a big fluffy robe like a real client, anonymous to the other guests (and funnily, to some of my own staff.) I lunched on our outdoor loggia. The entire spa even looked different to me, wearing my “guest goggles.” (I still scribbled out a punch list of maintenance and repair items afterward. Old habits die hard.)
I was blown away. Perhaps most spa owners reading this blog would also rate their spas highly, but I imagine you, like me, rarely give your team the opportunity to truly strut their stuff.
I recently completed a benchmarking project for Wynne Business that involved visits to splendid, world-class spa operations. (A dirty job, but someone had to do it.) I’m pleased to say that the quality of our treatments and our team was comparable. But unless I’d had services under “real world” apples-to-apples conditions, i.e., a special time set aside for pure relaxation and self-care, I would not have been able to see that. I realized that when regular guests enjoy a half day or more at the spa, it deeply enhances their overall relationship with our brand.
Like a lot of card-carrying Type A’s, I’m hard on myself and the folks around me as well—all in the name of continuous improvement. My staycation experience helped me see that being pleased is not the same as being complacent. Spa teams—and their owners--need a regular infusion of gratitude to stay motivated, committed and inspired.
The “staycation,” America’s stay-at-home vacation trend, is hammering the travel industry this summer. Economic slowdown and the horrors of summer air travel have caused many people to reconsider their plans for long vacations and especially trips abroad. Even affluent consumers are feeling this shift in sensibility; as news reports teem with stories of downtrodden consumers who can’t afford to gas up their cars to go to work, conspicuous consumption has become a bit too…conspicuous. It’s suddenly chic to be sensible. (An added bonus: one can often be “green” and sensible in one fell swoop.)
Europe’s loss may be US spa operators’ gain, however. Guests who previously headed to Tuscany for a couple of weeks are taking “consolation vacations” and treating themselves to spa visits close to home. Not just the odd massage or facial, but a day at the spa, with all the bells and whistles. These “sensible sybarites” are staycationing in your spa. Compared to a $5,000 trip to Fiji, a $500 spa package is a fabulous bargain.
We recognized this phenomenon halfway through the summer, when sales at our Preston Wynne Spa in California’s Silicon Valley jumped 28% from the previous year. Other spa owners began to report similar behavior from their guests.
While I would have loved to be a bit further ahead of the Staycation curve, this trend won’t end with summer. Here are some thoughts about how to market to this customer:
- Staycation guests are receptive to indulgent, all-inclusive spa packages; dust those holiday favorites off, call them “Staycation Specials” and put them front and center in your marketing campaign.
- Provide ideas for other staycation pleasures near your spa; wineries, art galleries or museums, botanical gardens.
- Have a drawing for a “staycation” package at the spa to increase awareness
- Increase awareness by talking about “staycationing” in your marketing and in person, with guests. Concepts like “staycations” grow in popularity when they are recognized and named.
Staycation, Part Two
I decided to “staycation” this summer myself. (Full disclosure: I don’t usually take a vacation in the summertime; I love Europe in September during ‘reentree,” when even Parisians pretend they’re happy to see you.) A summer staycation was a fine excuse for leisure and market research combined.
A spa visit was at the top of my “staycation” must-do list. I scheduled a half day at my spa, something I never do. I am a less than perfect guest at my spa. I rush from a meeting to a pedicure, and then invariably smudge my polish in my sprint to the next meeting. I shoehorn my spa experiences into the small cracks in my schedule.
Not this time! To ensure that I did not sneak into the office afterward, I scheduled dinner at a terrific restaurant in San Francisco. I’m unaware of regulations governing how far one is permitted to travel and still ‘staycation,’ but I’m fairly certain this was legal.
I chose an Ocean Glow (a body treatment that’s a hybrid of exfoliation and wrap), a massage, a facial treatment, and a makeup session. About four hours of services, which my normal state of Business ADD (BADD) would never permit. I wafted about in a big fluffy robe like a real client, anonymous to the other guests (and funnily, to some of my own staff.) I lunched on our outdoor loggia. The entire spa even looked different to me, wearing my “guest goggles.” (I still scribbled out a punch list of maintenance and repair items afterward. Old habits die hard.)
I was blown away. Perhaps most spa owners reading this blog would also rate their spas highly, but I imagine you, like me, rarely give your team the opportunity to truly strut their stuff.
I recently completed a benchmarking project for Wynne Business that involved visits to splendid, world-class spa operations. (A dirty job, but someone had to do it.) I’m pleased to say that the quality of our treatments and our team was comparable. But unless I’d had services under “real world” apples-to-apples conditions, i.e., a special time set aside for pure relaxation and self-care, I would not have been able to see that. I realized that when regular guests enjoy a half day or more at the spa, it deeply enhances their overall relationship with our brand.
Like a lot of card-carrying Type A’s, I’m hard on myself and the folks around me as well—all in the name of continuous improvement. My staycation experience helped me see that being pleased is not the same as being complacent. Spa teams—and their owners--need a regular infusion of gratitude to stay motivated, committed and inspired.
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