Opened in December 2006 in the Barracks Road Shopping Center, Neroli Spa & Apothecary (Charlottesville, VA) is the brainchild of Suzanne Owen, a certified aromatherapist, makeup artist, and cosmetic industry executive. Along with her husband, Owen also co-founded Relax & Rejuvenate, a mobile full-service day spa that makes house calls. Well versed on the industry, she hasn’t let the recent recession slow Neroli’s growth. “We had a nearly 20 percent revenue increase in 2010,” she says. “After four years, we still average three new customers daily and a very high retention rate. Our sales to service went from 70 percent to 115 percent.” Designed by Michele Pelafas of Spa Interiors, the three-treatment-room eco-conscious spa features 800 square feet of retail space and another 1,200 square feet that encompasses the relaxation area, changing room, and more. With five employees on staff, Neroli is well-positioned for a successful future. Here, Owen shares how the spa has maintained its edge over the years.
How has Neroli Spa & Apothecary continued to succeed in these trying times?
A. We noticed that while people are hanging on to their money, they are still willing to invest in an effective skincare regimen. We have focused all our energy and effort into developing this targeted segment of the business. Also, increasing our sales-to-service ratio increased revenue, and some cost-cutting initiatives helped keep us in the black last year.
Why do you think Neroli Spa & Apothecary has been able to succeed where other spas have failed?
A. We have made adjustments in staffing, primarily by having dual-licensed technicians, so every employee can provide at least two categories of services—massage, skincare, or nailcare. Through an innovative training program offered in the state of Virginia, we can apprentice nail technicians and receive a tax credit for a portion of their salaries. Few of our staff members join us dual licensed, but they all end up dual licensed. We have completely changed our advertising strategies. We have dropped the print advertisement in the weekly papers and glossy monthlies altogether and no longer consider TV or radio. Our advertising dollars have been moved into email marketing, and we have brought back direct mail campaigns to our existing client base, now that email has become the new junk mail. Our advertising shift has paid off with lower costs and better results than any other channels.
How do you attract new and repeat clients and encourage them to visit?
A. New clients come to us from word of mouth, primarily. We send out monthly emails that focus on cross selling. Most popular have been: Free Upgrades! Upgrade your Elemis Power Performance Facial to a Hydra Lift or Hydra Peel Intensif ($75 value) and Free Lime and Ginger Salt Glow with the purchase of any Elemis Facial ($65 value). We also get great results from our birthday mailings. We send $20 birthday gift cards to all clients with a birthday the next month. The Gift Cards are only redeemable during a client’s birthday month. People are extremely appreciative and spend, on the average, more than $150 when they redeem these gifts.
How do you use digital marketing and social media to boost business?
A. We don’t use social media much but do send monthly emails created by a professional designer.
Did you change your menu of offerings? If so, how did it affect business?
A. We have not changed our menu in terms of lower prices, treatments, or shorter services. We have, however, added La Therapie Glycolic Peels to focus on serious skincare clients. If people see the results, they will see the value, purchase, and return.
What steps and cost-cutting measures did you employ to offset the recession?
A. All staff members have become cross-trained and also work the front desk, eliminating the need for non-revenue-producing staff members. We do not have receptionists or spa attendants. There is no such thing as “it’s not my job.” Everything is everyone’s job. The spa director absolutely must be a technician, generating service revenue as well as meeting sales-to-service goals to minimize salary costs.
Have you had to let any employees go? If not, how were you able to manage this?
A. We have not laid anyone off. As turnover occurred, we focused on finding technicians who would work under our system of dual licensing and cross training.
What have you learned from surviving the recent recession, and how do you plan to incorporate those lessons in the future?
A. Trust your instincts, take chances, and test your theories. You have to be willing to do whatever it takes. I wear more hats and work six days a week, but it has kept us growing.