Spa Marketing

Are appraisals hurting you?

Doing one’s homework and being fair can ease the stress of this essential task

Appraisals are not only about the head, but about the heart as well.

March comes in like a lion and goes out like a lamb,” is an expression that some of us are familiar with. While that expression is a reference to the weather, in my life, at least, March has generally been a month which does not go away quietly like a lamb and has been quite stormy and has left a few casualties in its wake. Let me explain. I went to college in the late 1960s and early 1970s when March was the time when one’s university exams were held. They wer e awaited , if at all, with a sense of foreboding and were usually sent off with a huge sigh of relief. Those unfortunate enough to have done badly in them always had the month of September to try and solve the problem the second time around. Of course Rock Hudson and Gina Lollobrigida had legitimized the concept with the endearing film Come September.

In the corporate world though, one does not seem to have a second chance if one does not get one’s appraisal act right in the month of March, never mind whether one is running an organization, unit or even a small team. Yes, in the corporate world March is the month of reviews, appraisals, raises, promotions and often enough heartburn.

Having spent 35 years as an employee, manager, unit head and company head I have still not cracked the March crisis that strikes us with depressing regularity every year. Employees continue to be disgruntled today as they have been ever since I can remember. Is there a method to this madness? Are there any learnings that we can take out? Can the upheavals of March be handled better? I speak with particular reference to the advertising business and its related sectors as most of my productive years have been spent there. But I daresay there are learnings for all of us in industry from what follows.

It’s not about you silly

One of the things we are taught as professional counselors, who talk to people in distress, is that the focus is always on the caller who comes to see us and never on ourselves. “Empathy! That’s the key word,” my trainer would say time and again to us. And that is the key message I have for all of us who have to review subordinates and offer them raises and give news that may be either good or bad for the recipient. Very often, we are too full of ourselves in appraisal meetings and go on and on about our past and often exhibit our own biases, which, of course, we are sure do not cloud our judgment!

“In those days I got a small raise and was so happy.” I hope you are not guilty of waxing eloquently like this! Remember this is not about you and you are not writing your memoirs, for posterity, here, but just doing an appraisal today for your subordinate. The operative word is ‘today’.

A quick guideline is perhaps in order here. Listen more than talk during these meeting and carefully observe the signals of body language from your colleague as he is being appraised. Body language often tells us a story, but only if we are willing to listen. Are you ready to listen?

Give feedback on actual incidents

All of us are clouded by impressions and perceptions and often build strong likes and dislikes about individuals who work for us. We like people who talk well or inquire about our children, even if they perform sub-optimally in their jobs. We dislike people who question what we say.

The best appraisals are those that are based on incidents and instances of performance or non-performance. Talk actual details here, not impressions. A thing that I have not done enough of is giving people feedback on a regular, continuous basis. Build up a roster of feedback on every employee who reports to you. This will ensure that the employee knows how she is performing on an on-going basis and does not have to wait till March to know how she is doing. This is a problem in some organizations and with some individuals as they wait till the very last moment to appraise, give feedback, and then find that the person being appraised has a completely new perspective on her own performance or the lack of it.

Comparisons can create chaos

One of the things that bothers the human mind more than anything else is comparison with one’s peers. Let me give you a real life example, and I can assure you that the scene gets repeated each year in different organizations; only the characters are different. I give Anita (name obviously fictitious) a raise of Rs 1,000 and she goes out of my room all smiles until she meets Sunita, who has got a raise of Rs 1,050. You do not need to be a genius to know that there is chaos in Anita’s life and in the organization as well, as she goes into an emotional tizzy and may even leave.

This is not a unique situation and I am sure it must have played itself over several times in your organization too. While there is very little you can do to control human behavior, there is a lot you can do to ensure that as an organization you take precautions to reduce your employees’ heartburn.

Do appraisals carefully, meticulously even and try to reduce subjectivity. Do proper homework on the years of service, academic institution from which the person graduated in case your organization has a policy on specific institutions and delivery on key result areas before you make the final appraisal. But remember that appraisals and raises are means of rewarding the high fliers and the achievers; so do not hesitate to reward unequally should the situation demand it. In case you must bite the bullet, you must, otherwise you will find that the true steeds have bolted because of your poor policies while only the mules remain!

You keep learning on the job

Even though I have spent 35 years at work, I still believe that I am learning. Each human interaction provides us with a learning opportunity, provided we have an open mind. Try to learn from your mistakes. Try to understand how people who live in a different socio-economic classification think and feel. Be genuinely concerned about the people who work for you.

Appraisals are not only about the head, but about the heart as well. Things can and often enough do go wrong at the time of appraisals. Just ensure that you have done your homework and have been fair to the best of your ability and knowledge. Then March will not be as traumatic as it can be for a few others.

Full Article 

Doctors, attorneys and dentists have largely missed the e-commerce boom. So have other service-based businesses like salons and interior design shops.

Sure, your Web site can provide information about your business. But it can’t make a sale. That’s because your clients can’t book appointments online.

Your clients still must call or e-mail to schedule an appointment. And you probably can’t handle client requests 24/7. This means wasted time calling back clients for scheduling.

New sites are offering solutions to the problem. They make it possible for clients to schedule appointments online.

Stop the phone tag

You can eliminate the back-and-forth and reduce the time spent on scheduling. And your clients will appreciate the simplicity, too.

Appointments can be scheduled day or night. This is particularly beneficial for luxury services. A customer can book a dinner reservation or spa day on an impulse.

For other businesses, online scheduling is better for repeat clients or referrals. Sure, it can draw in new clients. But potential clients will have questions for doctors, dentists and other professionals. You may prefer to speak with new clients before an appointment.

But you can make things easier for first-time clients. Your site should include answers to common questions. You should also tell people what to expect at an appointment. Let’s look at three sites that handle online scheduling.

HourTown

HourTown’s site handles your personal and work schedule. You can designate certain blocks of time as available.

Next, you place a link to your HourTown schedule on your Web site. Clients will see your available appointment slots. They can then request an appointment.

You’ll receive an e-mail notification of appointment requests. You can confirm or deny a request.

HourTown has several levels of membership. The most basic is its Freebie account. It allows two appointments per month. It also provides a customer contact book.

Business subscribers get many more features. For $20 monthly, you get unlimited appointments. You can schedule repeating appointments. And customers can leave reviews.

But the biggest draw may be the HourTown Advertising Blasts. HourTown will combine your scheduling with online advertisements. It places ads on major sites like Yahoo and Google.

If you want premium phone support, sign up for a Business Pro account ($30 monthly).

Genbook

Like HourTown, Genbook hosts your schedule on its site. A link on your site directs clients to your schedule on Genbook. Clients see your open slots. You and the client receive notifications of appointments.

Genbook’s free account offers unlimited appointments. You can also use it to manage other staff members’ appointments. Appointments can be made up to six weeks in advance.

If you want text message alerts, you need the Standard account ($40 monthly). It also provides a customer database and 12-month advance scheduling. You can also require credit card numbers to book appointments. This will help you charge for cancellations.

Booking Angel

Finally, there’s Booking Angel. It currently only serves restaurants. It plans to expand to contractors, spas, doctors and other appointment-based industries.

You can place a Booking Angel icon on your Web site. Or, Web directories can put a booking link next to your business listing.

Booking Angel notifies you of reservations via phone.

There’s no monthly subscription. Rather, charges for confirmed reservations start at $1.

Full Article

The State of the Day Spa Industry Address

As the year 2007 closed I felt it important to address the State of our Industry. It has been a tough year for Day Spas and it is critical to understand why, and how to overcome recent adversities. According to ISPA, Day Spa revenues declined 22% from $6.794 billion in 2005 to $5.294 in 2006. While at the same time the number of Spas (Day, Resort, and Medical) has grown by 6%. Many Day Spa Owners have really felt the pinch throughout the US and not fully understood why. Other Spa Owners have weathered the storm and though they have not lost ground, they have not grown at their anticipated rate. I think that it is important to understand the dynamics at play so that Spa Owners can adjust their business model and continue to grow despite this “Bear Market”.

The US economy and the devaluation of the US dollar has much to do with the situation but that does not tell the whole story, let us explore further:

1. In an economic downturn luxury items are the first thing that the consumer cuts back on, and as much as we would like to consider our services a “necessity”, not all Spa consumers agree.

2. While Day Spas have increased in number, Medical Spas have doubled in revenue and grown in number significantly faster than Day Spas in the same period. They have successfully siphoned off some of the Day Spa’s best customers, those customers for who price is not a factor.

3. There are more Day Spas sharing the diminished revenue.

Is this the end for the Day Spa business? Definitely not, but we will have to adjust our thinking, and there will probably be a big shake out within the industry. In order to adapt we must first understand the marketplace and how to make profit within our operation.

The Market has changed!

Within the last 18 months, and without many of us knowing it at the time, the market has shifted from an “excess demand” marketplace to an “excess supply” situation. That is to say we have more Spas selling to fewer Consumers today than we did in 2006.

In economics, when a marketplace shifts from excess demand to excess supply (and this happens often in many industries) the consumer looks for market differentiators. Unfortunately the biggest, easiest, and most important differentiator to the consumer is PRICE. Electronics is a good example of what I am talking about. When a new electronic gadget comes to the marketplace consumers are willing to pay top dollar to be the first to own such a device. When the several manufactures begin to catch up with this new demand prices begin to drop, and when the gadget becomes common place then the prices hit rock bottom. If a manufacturer wants to continue to charge top dollar then they must be innovative, and create some other market differentiator that sets them apart from their competitors, or continue to compete in a battle of pricing.

These principles hold true for the Spa Industry as well! We have seen the proliferation of Spas on every corner and the consumer has few ways of distinguishing the value of one from another. Further, with many competitors they expect to see more discounts and in fact can sit back and wait for offers to come to them and cherry pick the Spa or Salon that is giving the discount that week. For many Spas this “value oriented” customer is not an ideal Client for their business, but there is a silver lining: This budget shopping for services shows us that there is another whole class of Spa Goers that want to come to the Spa but cannot afford to come. In fact studies like “The Marketing Demographics of a Day Spa Goer” (available through the Day Spa Association) tell us that the reason 62.58% of respondents “never” or “rarely” go to Spas is because it is too costly; it is not that they don’t understand the importance, not that they don’t have a Spa available to them, not even that they think it is too indulgent. This is an opportunity knocking at our industry’s door if we can just get our expenses under control we can then deliver these services to these budget minded masses.

We Must Learn to Adapt!

As much as the Spa Industry has grown over the past decade (our Bull Market period) with record startups and record revenues, if we are honest with ourselves we must admit that we have never had “record profits”. Our business model has been broken for a long time and we have primarily survived by way of the “excess demand” that we have enjoyed. Well the time to pay the piper has come, and as an industry we must adapt or perish, as this is the way of the “free market economy”. The hard facts are that our compensation system has been upside down, and frankly just plain wrong for a long time, we have been chasing the high end consumer while virtually ignoring the middle class consumer, and we have done a poor job at building brands and loyalty that are results based (necessity) instead of pampering based (luxury).

The purpose of being so blunt in this message is to wake up an industry that has enjoyed a fruitful “Excess Demand Market”, but is about to pay the price of “Excess Supply”. While I remain confident that money can and will be made in the Day Spa world I know that it will become harder and harder unless we start working smarter and smarter. Just as on Wall Street, anyone can make money in a “Bull Market”, but it takes a smart business person to make money in a “Bear Market”. I know that many of you have struggled to earn profit while demand was high; you must now be even savvier if you are to turn things around during this “lower demand” period. I also know that of the thousands of full service Day Spas in the US about half of them will go out of business or change hands to new Owners within the next 24 months. Will you be one that survives or one that perishes? Do you have the cash reserves to weather the downturn economy? Can you still make money doing fewer services next year? Do you have the marketing muscle to increase your market share in a shrinking market?

It is not my intent to bring “doom and gloom” or to be pessimistic, rather exactly the opposite, to sound the alarm so that each of us can adapt our business to be recession proof. To put into place sound compensation systems that assures prosperity for your business. To allow you time to adjust your business model through market differentiators and to adapt to the new “excess supply” marketplace.

My Recommendations

First we must throw away an antiquated form of compensation that has prevented Day Spas from earning healthy margins. We need a compensation system that allows us to be more efficient and deliver services more economically and more cost effectively today than we were able to deliver them yesterday. We need to adopt a system that attracts a stable workforce that can contribute to the greater good of the company instead of only building their own personal clientele or book of business.

Second we must learn to either create a market differentiator that not only distinguishes us from our competitors but creates a “need” instead of a “want” in the consumer’s mind; or learn to make money at lower price points, and let that be your market differentiator.

Lastly we must band together as an industry and stand our ground against the Doctors and Legislators that would seek to take business away from our industry. We must band together to educate ourselves to be better business Owners, giving us greater understanding of how to compete and operate effectively and efficiently. Today’s Day Spas should belong to important Trade Organizations like The Day Spa Association to facilitate this “coming together”, “standing our ground” and “becoming better business Owners”. More will be accomplished through collaboration than through competition. Organizations like the DSA can help each of us accomplish this.

Last Thoughts

While the state of the Day Spa Industry is changing I am ever “bullish” that the strong will survive and thrive, new Spas will be built and made successful, and that there is even more opportunity in this market for those who operate intelligently and creatively. My pledge is to work more closely with Spas to overcome these obstacles and effect change throughout our industry through building better compensation programs and market differentiators. I know that it is easier to sit here and tell you what needs to be done than it is for you to implement these changes, therefore we can work together so that the load becomes lighter. I invite you to attend industry events and obtain the education, networking, and interaction that will have a profound effect on your business. Look for spa industry business workshops like those being organized by the DSA at The Day Spa Expo and the IECSC, and remember that the more we can shift the whole industry toward success the easier our personal success will manifest itself.

IMPORTANT NOTE: Let what is happening to the Day Spa Industry be an early warning and lesson to the Resort and Destination Spas as they may be affected by these same economic dynamics! As I write this message, they should be preparing for a similar downturn next year.

And if I am all wrong about the future of our industry, do these things anyway as they make good business sense and will help your business skyrocket. But if I am right then they are the things that will save your business from demise. Those who survive this economic storm will emerge as the pinnacle of success within their respective marketplaces, and be poised to take full advantage of the “Bull Market” that will come once again.

Who’s your competition and how you can blow them out of the water in today’s environment? You’re an enlightened owner/manager who knows most salon/day spa owners are folks who:

• have worked for other salons/day spas as a technician,
• were probably very successful at doing their job as a technician,
• thought they were smarter than their bosses,
• believed they would make more money as an owner, and/or
• believed that because they knew how to do the technical work, they knew how to run a business, which did the technical work.

The sum total of this experience brings to the market competition that, while it may look good on the surface, when you wipe off the “make-up,” actually is nowhere near close to being good on the inside.

However, unless you’re their accountant, you will never know it. All you see is that “bright-shiny-new” salon/day spa with their slick brochures. It would be only natural for you to believe they’ll take market share (clients) from you and that would be a disaster, especially in this economy. You wouldn’t want that to happen, would you.

Although you may have some competition that has actually managed and marketed well, it can be a revelation to realize most of your competitors run substandard, marginally profitable businesses.

Why? Simply because they don’t know how do it any other way. Rather than re-invent themselves and their businesses, they cling to their beliefs about what a salon/day spa is and what it isn’t, and how to market the business.

Rather than invest in themselves and learn how to navigate their businesses through rough waters, not realizing the journey is well worth it, they’re willing to go down with the ship, clinging to their beliefs on how to run a successful business.

You’re an owner/manager who knows your business will only grow if you build and operate an effective marketing system. This week’s feature gives you six strategies (systems) for increasing your client visitation patterns. See which one (or more) works best for you and then implement it—now!

During 11 years as a broker serving wealthy South Floridians, Nicole Oden made a lot of money, endured a lot of stress and spent a lot of time in spas getting rid of both. So when she became dissatisfied with the spas in her area, she decided to open her own.

In short order, she researched the industry, prepared a business plan, secured a bank loan and in November 2004 opened Spa Eleven, an 11,100-square-foot luxury day spa in Delray Beach. Ms. Oden says the 70-person enterprise generated a modest profit on $3 million in first-year revenues, and she is investigating two more locations.

Running a spa is perhaps the ultimate feel-good business, and spa owners say helping others look better and feel more relaxed is a major benefit of their job. Earning a healthy income in the business, however, is hard work, given the challenges in employee retention and financing.

After years of rapid expansion in the field, competition is a significant factor. Most new spa owners find that the margins are slim, and marketing is challenging, according to Laurel Smoke, editor of Salon Today, a business magazine for spa and hair salons based in Lincolnshire, Ill. “It’s definitely not an easy way to get rich,” Ms. Smoke says.

Ms. Oden estimates she logs three times the hours she did as a broker, but says she’s “one-eighth as stressed out.” One difference, she says, is that now she’s dispensing relaxation and pampering to pleasure-seekers, instead of financial advice to demanding investors. “I love the stock market and stocks and all that,” she says. “I don’t love the thanklessness of what I did.”

The International Spa Association, a professional organization in Lexington, Ky., estimates approximately 12,100 spas cater to U.S. consumers. Day spas like Ms. Oden’s, where clients come for a few hours of pampering, make up the bulk. Other types include resort and hotel spas where people stay for up to several days, cruise-ship spas, medical and weight-loss spas, and baths, often located near natural springs. Spas provide beauty and relaxation services, including massages, haircuts and facials, and also sell shampoos, bath oils and other personal-care products.

About half those who start spas are technicians from the beauty and personal-care industry, including massage therapists and hair stylists, according to Pat Corbett, president of the Erica Miller Spa School, a training facility in 108 Mile Ranch, British Columbia. Other spa owners come from a variety of fields, including a number who, like, Ms. Oden, were exposed to spas first as customers. “The industry is filled with people who have made a change of career,” Mr. Corbett says.

Some spa owners report making good livings. Ron Lawler, a former stylist and operations executive for a chain of hair salons, opened One Salon & Spa Ltd. in Oak Brook, Ill., in 2004. It started with 12 employees and now has 48. Mr. Lawler says he expects second-year net earnings from the business to equal his former corporate salary. “I thought there was money to be made here,” he says.

Mr. Lawler says he appreciates not having to travel and be away from his family and also enjoys building relationships with customers. “When a client walks out and says, ‘I just feel like butter, I could melt,’ then we have done our job,” Mr. Lawler says.

Relations with employees can be one of the field’s chief challenges, according to Mr. Lawler. Because of the industry’s growth — double-digit annual percentage increases for several years, according to the International Spa Association — stylists, massage therapists and other employees have ample job opportunities.

In an industry based on personal service, that’s a problem. “The turnover is unbelievable,” says Mr. Lawler, who cites 50% annual employee turnover as typical in the field. Mr. Lawler and others say they try to boost retention by interviewing candidates intensively, giving stylists and others ample autonomy and compensating generously, including benefits more typical of large companies.

Capital cost is another issue. Many spa owners overspend on décor and equipment, Mr. Corbett says. “There’s a race to build the best glass and brass and marble palace, and that’s created financial sustainability problems for a lot of people,” he says. Mr. Lawler says generous lease terms offered by spa-equipment vendors have helped him manage financially.

Successful spa owners research their markets to learn whether local demand for spa services is unmet, Ms. Smoke says. Analyze the community, she says. “Do they want tanning services, or massages? Do they want seaweed wraps, or just waxing and pedicures?”

Not all communities are good choices for $175 hair-color highlighting or $350 botox injections, both treatments available at Spa Eleven. Ms. Oden’s affluent customers snap them up with appetite, she says. Their appreciation, she says, is a refreshing change of pace from the brokerage business. 

The International SPA Association and the ISPA Foundation are always working to provide spa industry professionals with the most well-rounded and essential resources for this ever-developing field. We continuously update you on the development of new textbooks, research and courses, and we are particularly excited about the upcoming release of our newest initiative.

The new “Spa: A Comprehensive Introduction” textbook, to be published in fall 2008, will summarize the core spa philosophy used to create an understanding of modern spa culture and business. This valuable resource for students and newcomers to the spa industry will provide a substantial foundation on which to build a successful career. The introductory course will cover service, leadership, business, treatments, history, the future of the industry, and more.

ISPA Foundation President Edwin Neill III explained the importance of this new textbook for spa leaders, “The spa industry employs more than 230,000 people, but one of the biggest challenges the industry faces is finding qualified employees. Through the course curriculum that the ISPA Foundation is developing we can change that and help the 72 percent of spas that have open positions by filling them with qualified, well trained staff that will lead the industry into the future.”

We encourage you to contact ISPA and the Foundation at 1.888.651.4772 or ispa@ispastaff.com with any questions. We look forward to providing this textbook for interested students and professionals in 2008. Visit experienceispa.com for ordering details in July! 

Keeping Your Customers: 5 Proven Ideas to Create Loyalty

In addition to keeping up with the quality of the products and services of your spa, your customers need to feel connected to your spa in particular. To promote customer loyalty, try these 5 proven tips.

1 Create a Robust Customer Points Program The airline recognized many years ago that frequent flyer mile awards keep their airlines top of mind with customers when they look for tickets. Research at Columbia University found that consumers in a coffee loyalty program bought coffee more frequently the closer they got toward earning a free cup.

According to the Columbia study, “Not only do customers accelerate toward rewards (in terms of timing, quantity, and persistence of effort), but their acceleration also predicts loyalty and future engagement with similar goals.”

Spa managers can create their own “punch cards” and reward systems that encourage multiple visits and product purchases. As an added bonus, let your customers earn reward points for referrals and recommendations as well.

2 Get Back in Touch with Former Customers “Most customers won’t tell you they’re leaving,” said Denise Smith, president of Aurora Marketing LLC. “They’ll just never return to your spa.” Smith said spa owners should determine which customers are most important to win back before simply diving into the former client list.

“Determining which customers you want back is not always easy because ‘high value’ is not synonymous with ‘big spending,’” she said. Smith said spas may want to focus on customers who regularly referred business or perhaps people with a strong place in the community. She has a four-step plan to woo back the customers you want.

• Determine which customers you want back.

• Find out why they left.

• Fix the problem.

• Invite them back.

3 Communicate, Communicate, Communicate

Today’s high-tech world offers spa marketers many ways to keep in touch with current and former customers. Many of these tools are inexpensive and effective and keep customers in touch with your products and services.

Try these high-tech and traditional methods to keep your customers engaged and loyal.

1. Text messages, blogs, social networking and email promotions: These days many spas are trying high-tech marketing to reach consumers, reports ISPA’s Pulse March/April magazine. “Besides reaching consumers by the thousands,” the article said, “these new tools also allow spa and product companies to reach consumers previously untapped by conventional marketing methods.”

2. Telephone calls: Don’t be afraid to have staff spend an hour or so a week making phone calls to clients. “’TLC’ shouldn’t be restricted to the treatment room,” adds Smith.

3. Direct mail: The US Post Office says three-quarters of Generations X and Y, which represent 17% and 25% of the population, read and respond to printed. Further, these young consumers will keep catalogs for reference. Use a printed newsletter to showcase your products and services each quarter to enhance that connection.

4 Host a VIP Open House for Loyal Customers

When you identify the loyal customers who love your products and services, throw them a party. Host a wine and cheese event after hours to introduce a new line of products. Or welcome your new front-line employee with a meet-and-greet cocktail hour. The point is to create a home for your clients to help them recognize you as a part of their community.

5 Provide Your Clients More Than Products and Services

Today’s spa goers aren’t just looking for a one-visit fix for their overall health and beauty lifestyle. They want education about how to take care of themselves and what to expect from different treatments and products.

“Clients are hungry for information about the technical aspects of treatments,” said Dr. James Richardson in the ISPA Pulse magazine article, Knowledge is Power: Turning the Spa-goer Into a Repeat Spa-goer. Richardson advises adding education to spa menus and websites to satisfy that need for education. You can also create handouts and tip sheets for care between spa visits, creating valuable, branded takeaways your clients will keep.

Related Articles

3 ways to build spa business

E-Blast Marketing

Spa Gift Certificates