Spa survival in challenging times

By Deborah Mangum-Copelli

I’ve been avoiding writing any articles related to a change in number of guest visits, number of treatment bookings and total dollars spent in our beloved salon and spa industry in Australia, as I’ve been in denial over the past year and in optimistic hope that it was short-lived and temporary. But in light of the recent Wall Street bailout, sub prime lending crash, and global credit crunch; I can’t really ignore it any longer.

As we are part of the Travel and Leisure sector; albeit at the upper end, our industry gets benchmarked, compared to and reviewed categorically like golf, cruising, gym, spa, retail, and box office tickets – which includes anything you have to pay for to attend as a spectator, for example, a movie. The key here is discretionary spend, it’s not a “need” activity; it’s a “want” activity. And with less discretionary dollars to go around, consumers must make decisions as to how, when and with whom they will spend their hard-earned dollars.

Perception: industry insiders like to think that “spa” is in a consumer “need” category and that treatments and skincare products reflect lifestyle necessities, not discretionary items. Reality: ask a handful of your friends and relatives who are not in our industry to name their top two necessary leisure activities and see what they say.

When looking at spa and salon activity across the globe, there has been a slow down in new spa developments amongst the top brand spas, hotels and resorts, but in comparison to the past 10 years, growth has been exponential. It is only understandable that investors would forestall until projected earnings and profits start to meet previous financial expectations. However, Healing Arts Guide’s latest reports indicate that Disney is still developing spas, Carlson Hotels has 129 new developments on their books and Hyatt Hotels is investing in refurbishments and new developments; but the star performer and soon to be number one with spas per capita worldwide is Dubai in 2010.

On a more satirical international note, and one with a bit of “foot in cheek”, was the story about AIG Insurance; October 2008 recipient of the recent 85 billion dollar US government bailout. AIG Insurance took their top executives to the spa at The St. Regis, Monarch Beach California “after” the bailout and the US government was outraged that $23,380.00 of bailout money was spent on spa treatments. That story most probably was not good PR for the spa industry, but then again, it was obviously a “top leisure activity” for executives of AIG.

US urban spas that are trying new post-crash survival tactics have some diverse offerings, discounts and specials running. In New York City, the spa at The Westin is giving “out of work” New Yorkers a 20 per cent discount from 10am to 2pm on facials. One is called the “Recover Anti-oxidant Facial”, designed to renew the skin and the spirit as you “face up” to those job interviews.

And Caudalie Spa at The Plaza NYC is going for a vintage point of difference by relaxing their clients pre-treatment while they view a grand floor-to-ceiling glass wine cellar stocked with fine French Bordeaux. Post-treatment, clients can enjoy a glass of Chateau Smith-Haut-Lafite. Meanwhile, the new luxe Guerlain Spa in the Waldorf-Astoria has a point of difference which sheds the traditional locker rooms for a more intimate spa experience where clients can spend more time in their treatment rooms dressing and undressing and applying their makeup, or better still, having the makeup artist apply it for them. And as it is Guerlain; top French perfume manufacturer and retailer, the “parfum” counter is tres chic.

At Exhale Spa in Chicago, management is trying to lure new and existing clients into their spa and wellness facility by offering free meditation and healing sessions from 12pm to 12.30pm weekdays. This is a great way to help stressed-out executives cope in uncertain times. They also have some significant discounts on certain treatments during slower times and days, like Tuesdays from 1pm to 3pm.

It seems only appropriate to try and shed some light on how we can overcome these challenging times and give the “doom and gloom” soothsayers the flick with some practical and tactical solutions. Obstacles can be great motivators provided your business is trading on solid ground with a firm foundation.

If the Australian financial analysts are to be believed, we’ll be facing a bumpy ride over the next few years, so it’s a good time to start marketing and operational strategies with implementation tactics in place to maintain and improve growth. is a great resource for more than just what’s hot, cool and trendy. It’s a website packed full of ideas you can translate into your own salon or spa business that relate to your clients in one form or another. So, after researching what companies and spas are doing outside Australia and reading over pages of latest trend-watching articles, I’ve come up with a list of tactics that could work for you. Some you might already be doing and others could be new and fresh or will spark an idea that works for your clientele and operation.

However you look at it, we are still living in a “time impoverished” environment with most people crying, “they don’t have enough time” to do all the things they have on their list. So, when they do have time and they choose to book into your business, then they want and need to be treated as unique, because they are – their DNA proves it. So how are you going to make them feel special?

Spa and salon is a service industry, so start out by “serving your clients” from the moment they arrive to the second they leave. A friendly greeting, an offering of water or herbal tea is a given. If you are not even doing this, then it’s time to begin. When the client is leaving, ask them if they were happy with their treatments and if they would like to rebook; this is also acknowledging them. And, of course, a “thank you” and wishing them a good day is key – so simple yet so often forgotten. Is your front desk operating to your standards and to industry standards?

Just as the New York City Westin did with their “out of work” specials, we need to show empathy and heart to our clients. We do not know how tough it might be for them and how difficult a day or life they might have, so lend an ear and listen to your clients, sometimes they just need to vent. By just saying “I understand” you could turn their day around. You are also learning valuable information about what’s happening outside in the “real” world.

Perks and privileges – this is what we all really want from our salons and spas. We want professionalism, exceptional service, recognition for our patronage and to feel like we got a good deal. Look at all the “deals” out there at the moment, from mobile phone providers to a balance transfer on your credit card. Telephone providers are “giving away” plasma screen TVs to lure in new customers, banks are all competing for your deposits by giving higher percentage returns on term deposits, airlines are bundling hotel deals to get you to fly with them, hotels are giving away “free nights” and discounted weekends just to get you to sleep with them. Wine Clubs like Vintage Cellars gives you a “free” bottle of bubbly or wine with multiple purchases. And the list goes on and on.

Just like us, our clients want perks, privileges, freebies, upgrades and special deals for their business and their loyalty. And at the same time our clients want to feel like they are part of a bigger holistic effort, like charitable foundations such as breast cancer research or environmental initiatives like, Save the Earth. Clients want to take care of themselves, but they also want to be a part of something bigger than just them.

• Do some PR on your perks and your offerings and submit it to the magazine beauty and health editors; they love a good story and you might get some valuable press that costs you nothing but your time and gives you a high rate of return. Be sure to target magazines and newspapers and online publications that your clients are reading.
• Perks can give a facelift to your regular strong sellers; for example, a 15-minute free add-on to a facial or massage, and boost your bookings count.
• Show you care with your perks; tie-in your philanthropic pursuits or eco-friendly topics by giving your client her sponges after her facial. She can re-use them to apply the cleanser you are selling her. It’s good for the earth and good for your margins.
• Give your client an eco-friendly shopping bag they can re-use when shopping for groceries; it should be branded with your product supplier or your name.
• Create a product special or treatment special that only your loyal clients can purchase for a period of time; for example, for the first two weeks, and then you can open it up to your all your clients, just like magazines do for their subscribers (they get each issue before it hits the news stands). Be sure to advertise this to your loyal clients. And if you want to throw in the “evolved consciousness” mix, then make it a “hemp hand crème” or a “cancer-smart” sunscreen.
• You could promote priority bookings to your loyal clients, just like the airlines do with frequent flyer members. Of course, you won’t want to miss a booking, but just create a day like a Tuesday or Wednesday when you are less busy, for them to call to make their priority bookings for this Thursday through Saturday, for example.
• Shift your advertising dollars to perks and benefits directly to your clients through segmentation; for example, all massage clients get a free Traumeel anti-inflammatory homoeopathic crème for any massage of 1.5 hours or longer.
• When the economy is down, pregnancy is statistically up – figure that one out! But use it to your advantage by making the new expectant mum feel even more special with a perk for her. Maybe it’s a great rich moisturiser she can use to keep her skin more elastic and to avoid stretchmarks. Market and advertise this just to your pregnant female client segment.
• Segmentation is good, but not to the detriment of your regular but less frequent clients; you will be surprised how word of mouth spreads, so be sure you and your staff can explain which segment is getting what and for what reason, because if Mrs Smith is not getting what her friend Mrs Jones got, she will want to know why!
• Once you start a big campaign, like a loyalty program you will need to be 100 per cent committed, as you can’t take it away if you suddenly decide it costs you too much. So do your financial homework first and make sure you can afford loyalty-marketing. You can always update your plan, just like the latest Qantas Frequent Flyer Club and American Express campaign did.

This is just a short list of ideas to get you thinking about your business and how you are going to strive and survive through these challenging economic times. Do your research and look around at what is happening in other retail outlets. Check out what the rest of the travel and leisure sector are doing. Come up with your own list of tactics you think will work and test them out on friends and family in the age and demographic make-up of your clients you most want to attract to your business. And remember the old marketing rule; 80 per cent of your business comes from 20 per cent of your existing clients. So find ways to reward and recognise them and keep them coming back for more.

Deborah Mangum-Copelli is Managing Director of Cogum Enterprises Pty. Ltd., an International Spa Design, Development, and Consultancy Company, Owner-Director of Zen Day Spa Pty. Ltd., Sydney, Owner-Director of SpaFision, Inc., USA. Deborah’s experience spans hotel, resort and day spa projects in Asia Pacific, the USA and Europe. You can email her on:

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