What Successful Survivors are Doing

Here are some of our key observations, looking back at 2010

Cost cutting was a way of life, but we saw the limitations of that approach in hotel spas especially. There's only so much you can cut before folks start to question your price point.

One trend we noted is that hotel spas are being given more voice in the way they market to day and past guests. Hotels have stopped "tolerating" their day guest segment and started actively courting a local market. Results-oriented and wellness-driven programming (though not too far off the beaten path of stress reduction and de-aging) has helped resort and hotel offerings increase their appeal to affluent locals, who are willing to pay a premium, but not for a "fluff and buff."

Salon spas performed the best. Clients still need their regular maintenance. Skin care services have outperformed massage, because massage is being commodotized in many areas by budget operations like Massage Envy. (If I need a kink rubbed out of my shoulder, I may be willing to let a stranger to do that, but I'm not going to play around when it comes to my face—I'm going to my trusted esthetician.) That is not to say that higher end massage services are being outmoded—it means that you need to offer a real experience to get people to pay the premium. None of this "phoning it in" business that we still see in so many hotels and resorts.

Events and parties are surprisingly strong. This is a very supportive trend for resort and day spas, and those who have *unique environments* are finding there is a steady demand for social events. Spas have become a mainstream venue for entertaining. Successful Survivors are reaching out to their marketplace to make sure that there is awareness of their event and party capabilities.

In general, the Successful Survivors group share these traits:

  • they worked hard on building value for customers, taking nothing for granted
  • they aggressively managed utilization but segmented their customers so they were not bombarding their entire customer base with special offers
  • Instead of relying on discounting, they created lower-price point services (45 minute format, for example) that still enabled them to protect their value proposition but offered customers the opportunity to "spa" for less
  • they reduced overhead expenses continuously, but protected expenditures that had high perceived value for customers. In our spa we call this law "If it touches the customer, it has to be perfect."
  • they reduced the richness of compensation plans
  • they suspended paid time off benefits, and this year, are partially restoring them as a perk for employees who meet their sales goals
  • they got their managers out of their offices and onto the floor
  • they communicated continuously and were open about their financial health with their team
  • they cadged clever ideas from other industries
  • they used inexpensive marketing tools, including social media, to talk to their clients and build business
  • they improved and/or paid close attention to their web presence
  • they set goals, coached, and "touched" their team members every month

One thing is certain: sharing strategies with other spas is a great way to increase your business intelligence. I've said it before, but I'll say it again—form a round table with your peers (non competitive spas in your region) and get together every other month to share what's worked and what hasn't. It's free and it's fantastic.

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