Corrective Strategies for Spas in Crisis

 

During the last two decades the spa, beauty and wellness sectors have benefitted from an exponential growth which boosted the entrance of a great number of entrepreneurs from other sectors to these ones in order to seek opportunities for quick money and success.  Unfortunately, many investments did not meet the expected goals as the vast majority of projects have failed in their implementation. The main reasons behind their failure have been the lack of specific know-how related to these sectors coupled with the lack of a clear business strategy in relation to realistic financial goals, operational systems and innovation. In this blog article, we would like to share some basic advice to help assist those centres in crisis or those ones that are looking to optimise revenue and business performance.

 

The key ingredient to be successful in a specific sector is to know and understand the peculiarities of the sector in question. The only way to gain specific know-how of the sector is to work and live inside it.  In those cases where one already possesses this know-how, one also has to know what to do with this knowledge; and in order to achieve this, ten basic principles should be taken into account:

 

Quality of treatments and services. Thanks to international organisations such as the Global Spa Summit, available to the public are clinical studies on the benefits of some treatments – aesthetic or therapeutic – which support our motto as sectors dedicated to overall well-being. Consumers are increasingly becoming aware of the health benefits that treatments, therapies and services offer to help improve their quality of life. People actively participate in the pursuit of their wellness by choosing the treatments and services that best work for them. It is essential to provide quality as today’s consumer demands it!

 

Training. Our spa team must be constantly trained not only in the basics – treatment, product and service knowledge; their benefits, special offers, etc. – but they must also constantly update themselves in the latest trends (new product lines, treatment protocols, therapies, etc.) not only in order to offer the best service possible but to also be able to answer questions from clients, who sometimes know more than us about certain therapies!

 

Human capital management. Our team is the heart of our business as well as our most expensive resource. The peculiarity of our sector is the fact that if our team is not happy the client will inevitably be affected. This is not the case for an employee who works in an office or restaurant, where if an employee is not having a good day, it is unlikely that it will show in the service or dish their offer. However in our case, if a therapist is not happy she will transmit this energy to the client who in turn will not receive the desired quality of treatment and consequently probably might not return to our centre. It is therefore essential to not only choose the right team members and train them, but to also manage them effectively.

 

Treatment Menu Engineering. Creating a treatment menu is not that simple. It is not only question of including some massages, facial and body treatments and the odd latest fashionable treatment; there is a logic and strategy behind it. You must know where each of your treatments lie in respect to the four sections of the ‘Treatment Menu Engineering’ system, including the target markets for each of your treatments:

 

  • Stars: low costs and high sales.
  • Plough Horses: high costs and high sales.
  • Puzzles: low costs and low sales.
  • Dogs: high costs and low sales.

 

A well-written treatment menu is the foundation of pricing strategy, yield management and capturing of new clients.

 

Yield management system. An effective yield management system allows us to optimise revenue and at the same time widen our target markets. Aggressive promotions published on internet websites such as Groupon may attract more traffic to your centre but it is unlikely that you will be able to convert them into loyal customers. These consumers tend to shop for the best discount. Offeirng and publishing different prices to fill empty hours will allow you to attract clients who probably would not have come to your centre otherwise.  Although this target market is price sensitive they also seek well-being.

 

Pricing strategy. Having a coherent pricing strategy will require an understanding of the profit and loss account, treatment costs, target markets, the type of centre, in addition to offering value for money.  Once all these variables have been taken into consideration, an appropriate mark up can than be added to your treatment and service offering.  

 

Engaging with your clients. Do you really know what your clients want? Are there any treatments or services that they would like in addition to the current offering? Are there any other potential target markets that you could reach out to? These are some questions that you should be asking yourselves in order to seek new ways and strategies to improve communication with your client base.   

 

On-line presence. In our sector we tend to be hesitant when it comes to using the internet. Internet is changing the way of doing business; and more importantly the way people buy. It is important to have an updated website that accurately describes your centre and philosophy. It is also recommended to be present in relevant social media networks and industry forums as well as online spa listings. Internet is the perfect show case to sell your centre to a wider audience.

 

Your competitors. One can never underestimate their competitors. It is advisable to know your competitors well, their SWOTs and have a rough idea of how your key performance indicators compare to theirs.

 

The role of a consultant. Being engrossed in the day-to-day grind of our businesses causes us to lose objectivity and fall into the trap of becoming comfortable and to continue doing things the way we have always done them; the way we think things have to be done.  Operational audits, like the ones we offer at Spa Balance, offer the opportunity to analyse each and every aspect of our business from an external and fresh point of view and thereby implement adequate corrective strateies in order to optimise revenue. Businesses’ knee-jerk reaction to economic crises tends to be the cutting back of costs. It is these types of cut-backs that drive most businesses to closure as they tend to compromise key business strategies that help them sustain themselves in the market in the longterm.

By Sonal

Sonal Uberoi creates and delivers smarter spas around the world. Spas and hotel groups hire Sonal to help them design, set up and manage their wellness businesses. Her finance background and worldwide operations experience in the spa, wellness and hospitality sectors make Sonal the go-to expert for business optimisation solutions. Connect with Sonal on LinkedIn www.linkedin.com/in/sonaluberoi.

4 thoughts on “Corrective Strategies for Spas in Crisis

  1. Pingback: Cosmética Dermatológica » Archivo del Blog » Consejos para afrontar la crisis en un spas

    • Muchas gracias por publicar nuestro artículo en vuestro blog.

      Próximamente, sacaremos diez posts profundizando en los diez principios básicos que indicamos en ‘Estrategias Correctivas para los Centros en Crisis’ para ayudar los spas y centros de belleza durante estos tiempos difíciles.

      Un saludo,
      Sonal Uberoi
      Directora, Spa Balace Consulting

  2. Pingback: Estrategias Correctivas para los Centros en Crisis: Parte 1 – Calidad | Spa Balance

  3. Pingback: Estrategias Correctivas para los Centros en Crisis – Parte 10: El rol del consultor | Spa Balance

Join the conversation

*