The Importance of Marketing Your Spa Even When Revenue is Down
By Deborah Evans Parker Principal, Deborah Evans & Associates, LLC | July 14, 2013
The worst mistake I see as a spa consultant is the reduction or elimination of the marketing budget, as revenue starts to decline, especially evident in the new economy. Many business owners to include spa owners and operators felt this was the easiest way to reduce their operating expenses as revenues begin to slide down and most likely accelerated their decline even further. It has been the number one mistake on the fall downward for many spas, for some their doors are no longer open.
It is critically important to evaluate the reasons for declining revenue, whenever revenue and profit begin to fall and to carefully understand the reasons to maintain a successful business model. A true understanding is needed to be able to rebuild the revenue, adjust pricing, labor costs or other expenses relationally in a strategic response, not a knee jerk reaction. As the economy began to fall in 2007 and 2008, it was evident that the spa business model needed to be retooled to continue to operate successfully. Unfortunately, many did not adjust soon enough, waiting until the economy "turned around".
A planned and relational reduction in expenses is necessary when revenues fall with careful consideration of where to reduce. An initial starting point when revenue declines is to evaluate and retool the overall treatment and services offered to be sure they can still meet the market need. This is the core of what is offered and contributes the highest cost of operation, product cost and labor costs to produce the service. If a spa's price points are "perceived" as too high or no longer have value in the client's mind, they no longer purchase these products. A spa client's or potential spa client's need to escape, relax, unwind, take care of their health and well being has not decreased with the downward economy, if anything it has increased.
The creative spa business model addressed this continued need in several ways responding to the changing market and maintaining their client base. Some examples of successful changes made include the following:
- Adding value experiences to their client's needs such as complimentary infrared sauna, halotherapy in relaxation lounges, complimentary or low cost spray tanning or tanning beds, complimentary child care, massage or zero gravity relaxation chairs in the waiting area for use pre and post service. Be sure guests know they can use your facility pre and post treatments and increase the value of the spa experience.
- Reduced the length and pricing of treatments and services offered adding express treatments, mini-treatments, two in one treatments. If you cater to hotel guests and a local day spa guest, offer different pricing options as possible to build a local following to be competitive.
- Offering a reduced price for multiple services offered, adding value to the client and increasing your revenue per client.
- Selling gift certificates and rebating an amount to the purchaser for a future service. This takes some of the guilt out of conspicuous consumption and purchasing for oneself.
- Selling a shared experience with a girlfriend's getaway, gift for significant other or family member, so that the emphasis is on the sharing, not just the treatment experience.
- Starting a last minute opening list and use mobile technology to announce same day opening at a reduced, last minute price. I know of one spa that charged a membership fee for this service and were quite successful booking their same day open appointments and building a market for a more price sensitive client discretely.
- Consider a two tier pricing strategy, with lower prices for the early days in the week and your slow times of the day and higher pricing for nights and weekends. This way you have an opportunity to sell up or down to clients and have an immediate price offering for the price sensitive client without discounting.
Once your offerings are adjusted to the new market conditions there are many opportunities to market yourself with minimum expense and to continue to build your brand. If you are continuing to advertise, consider using tactical advertising as opposed to brand advertising. Add a timed call to action offer with an ending date to create an immediate and timed market response in your advertising and track results. Adding a code, using a mention this ad message, using a dedicated phone line with analytics, training your reservations team to ask how the caller heard about you work well. Make it easy for the user to take you up on the offer.