How Incorrect Assumptions Can Hurt Your Business
by Douglas Preston

In a down-turned economy that’s stubbornly refusing to permit recovery, and where competition in the spa market is as thick as thieves, business operators can ill-afford to overlook unnecessary expenses and miss revenue opportunities. Every bill, every lost man-hour, and every passed-over sale chip away at your financial foundation and can draw you slowly but inexorably toward a disaster. Today, too many spa businesses teeter on the brink of failure as unsolved challenges overwhelm an owner’s ability to accurately identify and reverse them. And while a shrinking job market and a profusion of new spas may be impossible forces to stem, the last thing you want is to aid the enemy by accommodating costly management assumptions. They’re lurking in your operations, they’re immobilizing employees, and they’re draining away your business’s potential. As a spa business consultant I must root out costly client assumptions like you would weeds in a garden: leave them alone and they’ll take over. The end result isn’t a pretty sight.

Here are 7 of the most common incorrect spa business assumptions that every manager should be looking for, and banishing:

1. Midday, midweek appointments are hard to fill
Is that so? Just because most of your clients request weekend and evening appointments does it mean that they won’t accept your slower-selling slots? Many spa therapists and receptionists simply assume that these appointments are hard to fill since they’re usually not requested; therefore, they don’t offer them as choices when clients schedule or reschedule. In other words, it’s pointless to ask a question to which you believe you already know the answer.

Try this: whenever a customer calls or arrives at the counter to schedule an appointment, offer your slowest time first, without asking the client what time he or she prefers, and certainly without referring to those appointment slots as “slow”. If the client asks for another time then suggest something else that still falls into the “slow” section. Only offer premium appointments when clients specifically request them, even if you have plenty of them available (remember: these are the premium last-minute call in request times, too!) You’ll be amazed at how well those empty hours will fill!

2. Estheticians and body therapists are poor at retail sales
What? Have they been genetically engineered to fail at product sales?
You’ve had vendor reps conduct product knowledge classes and offer sales tips but to no real benefit, right? And some of your employees have flat-out told you that they think “pushing product” on customers is unprofessional! Nagging doesn’t work and sales commissions only seem to excite one or two people on your team. It’s easier to just give up than to keep struggling in a losing battle, wouldn’t you say?

But, have you provided your team with truly skilled sales training, and regularly? Do you require employees to perform retail sales at a set level as a condition of continued employment at your spa? Do you faithfully monitor the sales results, reward when they’re met or exceeded, and take corrective steps immediately when underperformance is detected? No? Then your assumptions are incorrect and the problem can be remedied if you want to remedy it. Tolerating poor retail activity is one of the most expensive of spa management neglects. It’s a homegrown problem that can be fixed, permanently, but the first step is to abandon the idea that the goal is either hard or impossible to achieve.

3. Business is slow because I think our prices may be too high
Do you know for a fact that your prices are too high? Have clients told you this? How many, and how often have you heard it? I will bet that it was only a few at best—not the reason that you’ve entered a sudden or gradual downturn in appointment sales. Besides, some customers will always feel that your prices are too high. In my opinion Starbuck’s Coffee prices are too high but I’m still in there twice a day fully willing to pay for what I want. I can certainly buy a cup of coffee more cheaply, but not their coffee. And I want their coffee.

Before you go slashing prices ask yourself the following:

Instead of a blanket giveaway, spend time looking for waste, poor client rescheduling habits, overlooked retail opportunities, and customer call-in service upgrades. There’s money lying around everywhere in your business, available but untouched. Go after that and leave your prices alone!

4. More product lines will attract more retail sales
Probably not, but they will certainly take more of your cash out of circulation. Many spas simply carry far more retail product than they should. Other than a few gift or luxury items most of a spa’s product sales are those that have been recommended by an attending therapist, not stimulated by the manufacturer’s advertising or reputation. And, since your average day spa has more of a recycling rather than a rotational clientele, customers do not require deep variety in skin and body products in order to become and remain buyers. By adding more product lines you’ll likely be paying for heavier inventory just to offer more (and redundant) choices for the same number of customers. The result? Static sales revenue but with lower operating profit.

5. You can’t put makeup on a client after a facial, so makeup is hard to sell
Absolute nonsense! While there are situations and treatments where the skin is better left makeup-free (high-efficacy peels, microdermabrasion, acne extractions, etc.) in most cases it is perfectly fine to apply a little color following a facial. Our spa did just that in countless thousands of appointments without the slightest negative effect, and a lot of good. Some mascara, a little eye shadow and liner, a pretty lip color—all can make the client feel better about their public appearance (we all know what we can look like post-facial!) and introduce them to your cosmetic products. Our makeup department worked so well because we required that all estheticians in our employ be skilled in the service. Have that talent already? Great! Need training? Fine, we’ll train you! But not doing makeup wasn’t an option in our spa—the service and the income was too important for us to overlook. It’s true for your business, too. If you want it done, see to it that it gets done. Leave nothing to chance or chances are that you’ll be left with nothing!

6. We give away spa services because it brings in lots of new customers
Whenever a consulting client tells me this, I ask them to do one simple thing for me: prove it. Show me through client records just how effective the service giveaway campaign has been. So far no one has been able (or willing) to do it. This huge and expensive assumption will most certainly consume time, products, and labor—all in addition to whatever marketing dollars you’re shelling out. And a darker problem usually develops in this type of business promotion: resentment on the part of employees forced to perform “free” services. I’ve almost never visited a spa where management and employees agree on the personal obligation or value of complimentary services. Employees often feel taken advantage of or devalued as professionals when their talents can be doled out to the public like cheese samples in a supermarket. How good could a massage or facial be when performed by a technician who is unhappy about having to do it? The message will come across to your prospective client.

While there have been a good many spa managers that abused the free service expectation among their employees, the real problem lies in the assumptions about how such a promotional strategy works. Typically, it goes like this: the recipient tries the service, likes the service, and then reschedules the service. Brilliant, huh? No. You need to do more in order for this method of marketing to yield a reasonably good result. I’ve had plenty of these treatment samplers and I can report that, almost without exception, one key piece of the plan is always missing: the selling. I go into the spa, am taken to a treatment room, am treated, thanked, and then a shy receptionist may sheepishly ask me if I want to reschedule. Well, no I don’t. Where was the unique experience? Where was the over-the-top care and concern on the part of my therapist? Where was the education that should accompany the treatment that helped me to understand why I should want to repeat the experience? Nowhere to be found. The entire “service” is conducted as an obligatory chore by a resentful employee lacking company training in service sales, the professional passion to impress me without an employer’s edict, or both. If you don’t or won’t make the effort to train employees on how to make the most of service sampling, that is, to really sell it in touch and language, do not engage in this it. This will backfire!

7. Medispas are going to take over my business!
Stay tuned for my article on this important subject in next month’s issue!

I’ve said throughout my business career: failure is a goal, something you work on every day to achieve. Ignore the above and you, too, may be well on your way to a losing business. Check our every assumption carefully before authenticating them as facts. That blind actions can lead to hazardous consequences is one assumption you can count on!

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