Spa Management Business Boosters

 1.  Stay "Tapped-In"

Today, tapping into the heartbeat of your neighborhood or community, is just the first step.  Technology has forced us all to think globally in order to remain competitive.  With our clients now able to search out and educate themselves on everything from ancient healing remedies to state of the art water therapies; planetary sustainability and greening lifestyles; to sleep remedies and laughter workshops, we too must have advanced knowledge and offerings that support this newest and most powerful world-wide movement towards living long and living strong. 

The focus on overall wellness, including earth, mind, body and spirit is the benchmark from which all else is borne.

On a recent ocean snorkeling excursion, I was pleased to hear our Guide state that all swimmers must do their part to help sustain the life and beauty of the coral reefs by using only bio-degradable sunscreen, or no sun screen at all, while in the water.  A somewhat unexpected, yet very responsible request.  Thankfully there was enough to go around and everyone was protected, including the fish.  We are finally realizing that our planet needs our attention, as do our own minds, bodies and spirits.  These conscious ecological and personal shifts have become main stream decisions for millions of us around the world. 

Many are anxious to make a statement about their lifestyle choices by choosing organic or natural foods (including spa cuisine); soft goods; home cleaning supplies; and skin and body care products, just to name a few.  This of course means frequenting establishments that can satisfy those choices.  

Fewer spa clients are shying away from the premium priced spa menus that offer pure healing alternatives; preventative maintenance; earthly goodness; and nourishing experiences. 

Great opportunities will exist for spas offering treatments that use herbal infusions, botanical blends, mineral formulations, essential oils, fruit and flower blossoms and vegetarian ingredients.  The once popular beauty products that boasted ingredient names that only a chemist could know and love, are being heavily scrutinized and often abandoned for the simpler, (yet more exotic), life-friendly alternatives.  

2.  Handle your Clients according to the Value they bring to the Business
"You will be most successful if you are a business who is diligent in gathering customer data and then providing initiatives that will encourage those customers to become even more profitable to the business." 

We know that our most valuable customers are those who have come in recently; who shop with us frequently; and who spend a lot of money when they visit.  To uncover this data, you have to track those three things with each customer.  That is:  the (last) dates the customer has visited the spa, which is referred to as "Recency"; how often they are coming into the spa in a given timeframe, or "Frequency"; and what they spend each time they visit the spa, or "Monetary Value".  Shortened, these three profitability measures become "RFM".  Most likely your software program can provide some or all of this data for you, and may even track more sophisticated information such as exactly what they purchased.  But no matter how you gather this crucial information, it is what will allow you to ascertain each of your customer's profitability and their subsequent handling.

Once you have begun gathering data on your clients, the next step is to categorize your findings.  Group your customers by dividing them into two categories, either 1 or 2, as they pertain to each of the above mentioned three tracking categories (R,F & M).  For example: an R1 (Recency) customer would have come into the spa more recently than an R2 customer; an F2 (Frequency) customer would purchase less frequently than an F1 customer; and an M1 (Monetary Value) customer spends more than an M2 customer.  It would be up to you how you might develop your ratings, but as an example: an R1 customer may have visited the spa within the last 30 days; an R2 customer in the last 60-90 days; and F1 customer may come into the spa bi-weekly; and F2 customer may come in every other month, and so on.  In simplified terms, an R1F1M1 is your VIP, and an R2F2M2 has less value to your business.

Remember:  The reason you are tracking your client's profitability is so that you know how each of them should be handled in different situations, such as your marketing initiatives and reward programs.  Clients, like your staff, must earn their rewards.  And yes, preferential treatment is OK, in fact it's encouraged!  Your VIP's might receive the odd home delivery; pre-promotional opportunities; frequent buyer rewards and/or gifts and freebies; a VIP lounge; specially assigned "on duty" attendants; phone-in privileges, and so on. 

One more point not to be support of the quote above, always consider a client's potential as well as proven results.

3.  Discover Passive Income

Passive income is creating a steady stream of cash flow with little or no effort and at the same time allowing you to keep your expenses down.  The ultimate goal is to free up more of your time, so you can take on other tasks or projects. 

Passive income makes you money while eliminating the need for you to be there.

We should all be finding ways to make money while we sleep!  An important thing to know about passive income is that the work is upfront and some methods will be more passive than others.  If you're not already, you should be considering some of these options:

1.  Sell retail products on your website;

2.  Offer fee-based online memberships with priority entitlements;

3.  Sell gift certificates on both your website and national websites;

4.  Provide on-line spa bookings;

5.  Set up a strong network marketing program with other businesses and websites, and reward referrals when business comes in (this is basically paying for word of mouth advertising).

Although "de-staffed" spa experiences were primarily introduced to help alleviate high staff costs, offering these self-serve treatment areas to your clients for a flat or package fee, may also be considered a form of passive income.  Google "passive income" and start researching now to find out how you might increase your financial breathing space.

4.  Consider Yield Management
This is zeroing in on the best mix of services and products to sell at given times to generate the highest revenue and profit. 

Could you benefit in finding ways to maintain a consistent, somewhat controllable, even predictable bottom line during seasonal highs and lows and fluctuating supply and demand?  Although quite new to the industry, spas are a good candidate for Yield Management, as we experience extreme fluctuations, weekly and seasonally.  Consider one or some of the following tips to help control outcomes and ensure your business makes it into the future.  These are just a few of the many important components involved in Yield Management: 

1.  Sell premium services only at peak spa times;

2.  "Cap" the number of lower margin services you accept in a day, leaving space for the more profitable ones;

3.  Sell and redeem Spa Packages only during off-peak times (not weekends);

4.  Structure your menu to drive profits, not sales;

5.  Train booking staff to sell higher priced/higher margin services first;

6.  Offer "price advantages" on future bookings for off-peak times;

7.  Install week day/weekend pricing schedules.

**Go2 for your complimentary copy of their Spa Yield Management White Paper. 

5.  Have a current 1 year Marketing Plan

Each year you should be developing a newly revised Marketing Plan. 

Your plan should be multi-dimensional, allowing you to reach your clients 7 times through 7 different mediums

1.  Your Spa's Visual Image must be unmistakable;

2.  Your Print Materials are tied in together and clearly represent your image;

3.  You've positioned yourself as an Industry Expert with writings and broadcasts;

4.  You attend, exhibit and speak at Trade Shows and Industry Expos;

5.  You continually work at developing strong one-on-one networking opportunities;

6.  You are going BIG this year on your Internet Marketing initiatives;

7.  You have Media and Publicity Campaigns in place.

Your marketing plan should always be viewed as a long-term project, not something that brings instant results.  Your repetitive messaging will constantly serve to remind the client of who you are and what it is you offer that answers to their needs. 

The accumulative affect that results with repetitive and multi-media messaging is what gradually develops your position in the marketplace and serves to gain; retain; and grow your client base. 

Each marketing initiative should be measured individually, as should the results of the entire campaign.  After your first year plan has been realized, are you in a better position?  Have you gained market share and seen a better bottom line?

By Leslie Lyon,