http://www.spas2b.com/blog Leslie's SPA Blog Tue, 18 Jun 2013 12:30:49 +0000 en-US hourly 1 http://wordpress.org/?v=3.4.1 http://www.spas2b.com/blog/2013/06/12-most-breathtaking-stories-to-tell-your-customers-re-blog/ http://www.spas2b.com/blog/2013/06/12-most-breathtaking-stories-to-tell-your-customers-re-blog/#comments Tue, 18 Jun 2013 12:30:49 +0000 Leslie http://www.spas2b.com/blog/?p=4290   We’re BIG believers in story-telling at Spas2b, and you may remember our 2-Part blog titled Your Story, Their Journey earlier this year. Modern business requires that we build relationships through engagement and story-telling. When I came across this blog written by Doug Rice, I had to pass it along, because it is a fantastic guide to telling your story in a way that really does build the relationship and engage the heart of the listener, and it carries the important message:  ‘Always be the hero of the story you’re telling’   12 Most Breathtaking Stories If you know anything about me, you know that I am huge proponent of applying the notion of storytelling to business. Continue Reading...]]>   We’re BIG believers in story-telling at Spas2b, and you may remember our 2-Part blog titled Your Story, Their Journey earlier this year. Modern business requires that we build relationships through engagement and story-telling. When I came across this blog written by Doug Rice, I had to pass it along, because it is a fantastic guide to telling your story in a way that really does build the relationship and engage the heart of the listener, and it carries the important message:  ‘Always be the hero of the story you’re telling’   12 Most Breathtaking Stories If you know anything about me, you know that I am huge proponent of applying the notion of storytelling to business. I’m not the only one. The “story” concept is hot right now.  Advertisers, while not necessarily using the word, have been using the concept of stories to sell products since the early 20th century. Why all the hype? Stories help us understand something about ourselves. When you tell people a story, they process it in a way that relates to them — in a way that helps them make sense of their lives. In business, when you tell a story, you are positioning yourself in your customers’ minds. You are conveying something magical; you are telling your customers how you relate to them. Now, the concept can be rather convoluted. “Story” is kind of an abstract notion when applied outside of the realm of business. It can mean many things. It can be synonymous with “branding.” But, to give the concept some distinction, let’s think about it in a slightly different way. Let’s think about it as a series of narratives you can use to convey what you mean to your customer. 1. Who we are This one’s all about characterization. Talk about the leadership team. Talk about your employees. People want to know that a business is made of people. What are their names? What are their passions and interests? And what is the common denominator in all of them that shapes the character of your business? 2. Why we’re here This, in a nutshell, is your mission statement. Why do you exist? I’m not talking about, “to maximize profits and return to shareholders.” I’m talking about the place you serve in the market. What need do you meet? Why are you in the particular business that you’re in? How would the industry be different without you in it? 3. What we do Don’t confuse this one with, “What We Sell.” (That’s the next one). This one’s all about how you improve the lives of your customers. In other words, what are the benefits of what you sell. If you are a chiropractor, “what you do” isn’t fixing people’s backs. It’s helping people live a more natural, pain-free lifestyle. What are the benefits of what you sell? What difference do you make? What do you do? 4. How we do it This is where you talk about your product. This is what you sell. And it’s important to use as evidence to convince the skeptics. It’s easy to make the promise that you help people live a more natural, pain-free lifestyle (what you do), but the claim has little substance until you explain that you’re a chiropractor (how you do it). How do you create value for your customers? What features give birth to the benefits of the products you sell? How do you do what you do? 5. Where we’re from This one’s about setting. As we all know, place is a huge part of story. What would Avatar be without Pandora? What would To Kill a Mockingbird be without Maycomb, Alabama? Setting is powerful. Where does your business come from? What aspects of the town, city, or region in which it was born gives it definition? 6. Who we’ve helped This is a place for customer testimonials. It’s your story — told in third person by your customers. Use text. Use pictures. Use video. Whatever the medium, if your customer conveys satisfaction about having done business with you, you are telling a powerful story. What customers have you convinced to tell your story for you? 7. Who we’ve worked with This one’s about collaboration. It’s about heroes uniting. It’s The Avengers. It’s The Fellowship of the Ring. It’s NKOTBSB. (Okay, maybe that’s pushing it). But people love this kind of story. It’s about characters setting aside their differences to work as a team for the greater good. Who have you partnered with? What joint ventures have you formed? 8. How we’ve changed the world This is a story about a higher purpose. What has your business done for the greater good? Beyond your customers, how is the world better off by you being here? How have you “put a dent in the universe?” What’s your legacy? 9. How we started Everyone loves a good origins story. This one is about how it all began. The place, the time, and all the circumstances surrounding your birth. Who was involved? How did they end up forming your organization? How does it relate to who you are today? 10. Challenges we’ve overcome What’s a great story without conflict? You need a hero that has faced struggles and overcome them. What struggles have you faced? Maybe they’re ethical dilemmas. Maybe they’re problems with team members. Maybe they’re economic downturns. Either way, the story of overcoming challenges is one that resonates with your customers. 11. Where we’re going This is the cliffhanger. It’s the story that gives your customers an inkling of what’s to come. What’s your vision? What are your plans for the future? What are you developing? What’s the sequel? 12. Choose your own adventure Somewhat of a combination of #6 and #11, this one’s about outsourcing where you’re headed to your customers. Do surveys. Get feedback. What are your customers telling you? What are their ideas? How can you incorporate them into the next chapter of your story? When it’s all said and done, there is one thing that all of these stories have in common. You are the hero. That’s the kind of story you want to tell. Yes, you may come from humble beginnings, and you may face inner struggles that challenge your resolve. But, in the end, you always emerge triumphant. Against all odds, you come out on top. People identify with the hero. They see themselves as the heroes or heroines of their own lives. All the better if they see you in the same light. Always be the hero of the story you’re telling. What’s your favorite story to tell your customers? Featured image courtesy of Thomas Hawk licensed via Creative Commons. ]]> http://www.spas2b.com/blog/2013/06/12-most-breathtaking-stories-to-tell-your-customers-re-blog/feed/ 0 http://www.spas2b.com/blog/2013/06/how-focus-defines-our-life-re-blog/ http://www.spas2b.com/blog/2013/06/how-focus-defines-our-life-re-blog/#comments Mon, 17 Jun 2013 13:39:01 +0000 Leslie http://www.spas2b.com/blog/?p=4277   You will recall that in many of our blogs, we talk about ‘FOCUS‘ … Focus on your goal, market it repetitively and aggressively, and never deviate from it.   This blog post from Jonathan Wells, Advanced Life Skills ‘Recreating Your Reality’, gives us a really interesting comparison between life and the camera lens.   Continue Reading...]]>   You will recall that in many of our blogs, we talk about ‘FOCUS‘ … Focus on your goal, market it repetitively and aggressively, and never deviate from it.   This blog post from Jonathan Wells, Advanced Life Skills ‘Recreating Your Reality’, gives us a really interesting comparison between life and the camera lens.  Pay special attention to the “Application” paragraphs within each of these 3 points. How can you apply these important points to your SPA LIFE?   How Focus Defines Our Life by Jonathan   Photography is an amazing way to learn about focus. This is because the very act of viewing life through the lens of a camera can help us develop a truly empowering skill.  We call that skill focus, and learning to use it properly can transform our perception of the world around us and the people in it.I believe that the power to change your reality is equal to your ability to focus your attention in the most beneficial direction at any given time.   3 Things Photography can teach us about Focus 1. The higher the magnification, the narrower the field of vision. This principle is what allows you to use a telephoto lens to pick out a single face in a very large crowd. As you focus in on that one subject, the rest of the crowd disappears from view. Why does that happen? Because your field of vision narrows until the entire frame is filled with that one face. When you take the picture, the crowd is excluded. It doesn’t mean that there is no crowd. It simply means that you don’t see them in the picture because that is not what you were focused on. Application: Your perception is determined by what you focus on. This means that we can use our ability to focus our attention in a way that causes an empowering shift in our perception. It doesn’t matter whether we are looking at a person, situation, or an experience. We can control what our picture looks like by controlling what we choose to focus on. If you focus intently on the positive aspects of any person, place, or thing, the negative aspects will fade into the background. They will still exist, but they will be outside of your field of concentration, and will have little or no influence on the picture you see.   2. Lighting has a huge influence on how you see things, and your ability to focus. If you set your camera on a tripod and focus it on a single object, the lighting will determine how you see that object. Imagine that you have decided to photograph a magnificent tree that is standing alone on the top of a hill. If your camera remained stationary, and you took one picture every hour from sunup till sundown, what would you have? You would have twelve (or so) completely different photographs. Why? Even though the subject remained the same, the variation in lighting changed its appearance. Application: The degree of value we choose to assign to anything we focus on can be compared to lighting. If it is something of great importance, we put a spotlight on it so we can see every detail. If it is relatively insignificant, we dial down the light so it doesn’t distract from the things that really matter. If we assign too much value to (shine a spotlight on) things of little importance, they will overshadow the more valuable aspects of our life. By assigning increased value to thing like gratitude, relationships, health, and honesty, we bring those things front and center in our life. This means that they move higher on our list of priorities and capture more of our attention. As a result, less empowering aspects of life will be relegated to a lower priority and receive less attention.   3. Shutter speed affects the quality and clarity of any photograph. Under glaring conditions, exposure time needs to be reduced to avoid overexposing the picture. When the lighting is poor, a slower shutter speed allows enough time for the available light to properly expose the image. If you use a fast shutter speed in a low light situation, the image will not register. Your picture will be underexposed and worthless as a result. Using a slower shutter speed when trying to capture an action shot will give you a blurry picture devoid of details, also worthless. Exposure time needs to change to fit the requirements of each situation. If it doesn’t, then quality and clarity are compromised. Application: In life, we need to make choices about what we are willing to expose ourselves to, and for how long. We only have so many hours in a day. Learning to manage the time available is really a process of deciding how much time we spend on each activity. If you stay too long at unimportant activities (overexpose yourself), you will end up underexposing yourself to the really important ones. Once again, exposure time needs to change to fit the requirements of each situation. We also need to acknowledge that some things are not worth exposing ourselves to at all. Making positive changes in the quality of our life requires that we assign meaningful amounts of time to meaningful pursuits. If we don’t control our time, mundane activities will expand to fill the time available. By managing your time and adjusting your exposure, you will be able to give greater focus to activities that make a solid contribution to the quality of your life.   Auto focus, is it good or bad? For most of us, photography is a point and shoot process. Automatic cameras require very little skill to produce fairly nice pictures. Truly exceptional photographs however, still require a skilled photographer to manually control the focus and shutter speed, and to recognize or create the perfect lighting. High quality photos are still produced by those with enough skill to make the best use of the tools available. They want above average results, and they consider it worth their time and effort to develop the necessary skills. What kind of results do you want? For a lot of people, life is just an average experience, it’s a point and shoot affair. Generally, this is not because they don’t want an exceptional life. It may be because they haven’t taken the time to develop the life skills required to produce exceptional results. Or perhaps, they never had an opportunity to learn those life skills in the first place. Whatever the reason, the skills are available for anyone desiring to live a truly exceptional life. How about you, is average good enough, or do you want exceptional? When you look at your life, what kind of picture do you want to see? ]]> http://www.spas2b.com/blog/2013/06/how-focus-defines-our-life-re-blog/feed/ 0 http://www.spas2b.com/blog/2013/06/2-no-fail-employee-retention-strategies/ http://www.spas2b.com/blog/2013/06/2-no-fail-employee-retention-strategies/#comments Tue, 04 Jun 2013 19:00:49 +0000 Leslie http://www.spas2b.com/blog/?p=4228   The available positions in a spa business are limited by the number of people who are required to do the job.  As you move upwards to the top of your spa organizational chart, the numbers of those who plan, manage and oversee the work, decreases.  Continue Reading...]]>   The available positions in a spa business are limited by the number of people who are required to do the job.  As you move upwards to the top of your spa organizational chart, the numbers of those who plan, manage and oversee the work, decreases.  But in many cases, those at the top of the organizational chart, are not only managing the work; they are also doing the work… and it can be pretty challenging getting all that work done. And as you move downwards on the spa organizational chart, the number of those who do the work, increases, and this consists primarily of service staff and some administrative staff.  Some of them are happy doing just exactly what’s on their job descriptions, but there are many who are not. So, here we have management who are unable to finish all of their job assignments, and staff who are looking for greater job assignments  What spas really need, are service staff who can do their jobs AND help management complete all other pressing job assignments that don’t require management skills.  This way, our spa professionals have a chance to enjoy more fulfilling and varied career paths; and management can get back to strategic planning, managing and overseeing.  So wouldn’t it make great sense to integrate stretch experiences and succession planning into your staff job descriptions to grow their expertise, retain their loyalty and help you stay on task?  First steps Begin by identifying which jobs never seem to get completed within the spa.  Then, identify those staff who fit into one or both of these categories:  Those who are showing a distinct hunger for greater job satisfaction; and Those who are your most competent.  These two personalities are the ones that continually command your attention and whose talents you can’t overlook.  They make you feel compelled to take a role in the development of their career paths, so that they will remain with you forever.  Recognize the traits that stand out the most in these employees, and moving forward, always aspire to hire those who can emulate those characteristics and keep your talent pool full of quality candidates.    1.  Stretch Experiences for (happy) developing spa professionals When your culture supports an environment where stretch experiences are valued and accessible, you are better able to inject excitement into otherwise dormant job descriptions; you can actively challenge your staff’s current capabilities; and transform disinterested employees into enthusiastic, multi-faceted superstars!  In fact, in today’s economy, this cultural shift may be just as much a business necessity as it is an employment opportunity.  Seek out those employees from the two categories we mentioned above, as they are the two personalities who are your best candidates.  They will often be learning-oriented individuals who show interest and competency in new skill and behavioral development.  1st Example:  You need to install numerous policies and procedures into your SOP Manual, but time just does not permit you to keep on top of it properly.  You have an employee who you know has a keen interest in researching what’s current and trending.  She is analytical; works systematically; and is respectful of business processes…all good indicators that she has the potential to become your chief policies and protocols developer.  Why not present this stretch opportunity to her?  Now the skip has returned to her step and the weight has been lifted from your shoulders.  2nd Example:  You are the current event planner for the spa, but it’s very time consuming and keeps you there after hours whenever there is one approaching, which is often.  You have a great little Spa Attendant who has been looking for more responsibilities, and has also shown a real interest in this area.  You could begin having her shadow you during all event bookings, until she is fully capable of taking over this important business task from your ever expanding job description.  Now she’s happy, and so are you.   2.  Succession Planning for Management & Leadership Roles  Succession planning is having a ‘talent development mindset’, and in the spa, can play an important role in continually developing top tier employee candidates into Spa Managers and Directors.  Recognizing that staff will not be with the business indefinitely and having a good plan in place that addresses those changes, while at the same time creates career opportunities, is an important component of strong HR planning.   This kind of mindset can effectively serve many aspects of the business, including: Providing the company with service continuity if faced with the loss of a major player Improving staff retention by meeting the career goals of existing employees Reducing the costs of external recruiting Reducing the costs of management training Strengthening the core of the business to prepare it for expansion OR forming a solid exit strategy should you wish to sell your spa in the foreseeable future. In this case, we want to identify those most competent employees and develop their knowledge, skills and abilities to prepare them for advancement into management and leadership roles.  Gradually involve them in: Strategic planning Finances, budgeting and purchasing Market positioning and promotional initiatives Staff recruitment, leadership and performance evaluations Customer service processes and business building programs Operational  strategies and monitoring systems. If you have more that one exceptional candidate, continually rotate them into these more challenging management and leadership roles and assignments, so that you effectively guarantee you will have someone on hand to fill the position when the need arises.  Your proactive succession planning may mean you will never have to hire someone in desperation again.  Sound good?   ]]> http://www.spas2b.com/blog/2013/06/2-no-fail-employee-retention-strategies/feed/ 2 http://www.spas2b.com/blog/2013/05/5-hard-skills-spa-management-cannot-ignore/ http://www.spas2b.com/blog/2013/05/5-hard-skills-spa-management-cannot-ignore/#comments Mon, 13 May 2013 13:43:14 +0000 Leslie http://www.spas2b.com/blog/?p=4178     Whether you are currently in a spa management position, or are an aspiring Spa Manager, these core competencies are 5 of the skills considered to be among the most important ‘hard skills’ a Spa Manager needs to possess, as revealed in a 2012 Report on the state of Spa Management education worldwide.  Continue Reading...]]>     Whether you are currently in a spa management position, or are an aspiring Spa Manager, these core competencies are 5 of the skills considered to be among the most important ‘hard skills’ a Spa Manager needs to possess, as revealed in a 2012 Report on the state of Spa Management education worldwide.  But although very important to the spa management position, at the same time, they may be among the most difficult to find.  Some of this training is certainly available within the spa industry sector, and some of it you will have to look outside of the industry for, because it may not currently be considered a vital part of a spa management course’s mandate.  But whether you are able to find spa-specific courses, or more generic training that is considered suitable for many industries, choose carefully and know that anything that you do learn on the subject, can be adapted to your needs at the spa, and developed ongoing.   Although our description overviews are not exhaustive, our goal here is to provide basic outlines for each of the skill sets, to help you identify the knowledge that a future employer might hope their Spa Manager/Director would possess.  But never be afraid to ask what they expect. 1.  Strategic Planning Skills Strategic Planning is the opposite of Crisis Management.  When a spa spends too much time catching up (reactive), there is no time left to anticipate (proactive).  A strategic plan is the process of envisioning what the business environment will look like in 3-5 years based on forecasted trends, and then developing a workable plan to manipulate those forces to your advantage.  Your strategic planning will force you to look into the future and therefore provide a better awareness of needs, which affects your mission, changes your focus, provides a clear direction, optimizes staff and leadership roles, applies standards of accountability, and gains control of future outcomes.  In other words, a strategic plan means sustainability. 2.  IT Skills With the technological revolution, many companies continue to play catch-up, and spas are certainly no exception.  For a spa to catch up, they need staff who can keep up.  This list cannot be a Spa Manager/Director’s lone responsibility, but demonstrating acceptable levels of expertise in at least a few of these areas, is an important asset.  As a minimum, the Spa Manager/Director must have the ability to identify current technological hot buttons and know when and how to make change.  May need to know basic code in order to modify the website Ensure active, up to the minute knowledge of online social and network status Understand and be able to act upon business analytics and sales funnel information Familiar with information security and safeguarding issues Aware of how to monitor quality assurance and uphold standards Mobile know-how, for example, the current importance of converting to HTML5 Knowledge of new operating systems as others reach EOL (end of life) VoIP-enabled communication options Cloud-based thinking (internet hosted) instead of being dependant on physical devices. 3.  Public Relations/Promotional Skills Normally, a public relations / promotional director is a multi-media expert and influencer, whose focus is to prepare and deliver relevant stories to the right people, at the right time.  To do that, they develop and implement promotional strategies; identify task outlines; create publicity opportunities and platforms; maintain a network of media relations; constantly build upon opportunities; and stay flexible enough to be able to welcome spontaneity.  To do that, there are certain qualities and abilities that are necessary:  People Person to a wide population and personality type Strong verbal communicator Skillful writer Computer savvy  Detail oriented and deadline driven Practice creativity until it becomes a habit Real-time opportunist able to identify ways to work themselves into the news. 4.  Revenue/Yield Management Skills This is zeroing in on the best mix of services and products to sell at given times, to generate the highest revenue and profit.  By applying certain business measures during fluctuating supply and demand and seasonal highs and lows, a spa is better able to position themselves to maintain a more consistent, predictable bottom line.  Adopting yield management strategies is a good plan for spas, to help stabilize the extreme fluctuations a spa can experience.  Just remember that although many of these points revolve around promoting and selling the most profitable services and products, your customer’s needs must never be sacrificed in the process.  Some techniques include: Strive to sell high margin services first, particularly during peak times Employ top tier staff to administer those high margin services Avoid top tier staff being booked with low margin services, where possible Cap the number of low margin services available during peak times Give high margin services premium real estate on the spa brochure Design all floor space with high margin services and products in mind Offer price advantages on unsold current and next-day timeslots Install tiered pricing during certain times of the day/week/season. 5.  Financial Management/Accounting Skills Developing your Financial Plan is the single most important thing you can do for the business.  Physically charting spa finances will aid in setting expectations; monitoring progress; and guiding decisions.  The Spa Manager who has the ability to design the annual budget and overall financial plan, is highly sought after.  It’s all about the numbers and how to take them from paper to profits.  Steady financial gains should be a Spa Manager’s goal, and in order to accomplish that, a strict focus on finances is mandatory.  This may include: Preparing the corporate budget Have a working knowledge of cash flow; profit and loss; and break even Develop financial reporting systems, based on needs and financial status Set up campaigns to increase Key Performance Indicators Create business and staff statistical reports to chart ongoing performance Have a thorough knowledge of staff compensation methodologies Know how to calculate service and product margins to increase profitability Base promotional and staffing decisions on service revenue per minute and per hour Apply these results to continually improve outcomes. Do you need to develop your Spa Management hard skills? Get started with the Spas2b Spa Management Courses today!       ]]> http://www.spas2b.com/blog/2013/05/5-hard-skills-spa-management-cannot-ignore/feed/ 2 http://www.spas2b.com/blog/2013/04/4-ways-to-calculate-client-value-and-grow-your-business/ http://www.spas2b.com/blog/2013/04/4-ways-to-calculate-client-value-and-grow-your-business/#comments Tue, 30 Apr 2013 14:20:35 +0000 Leslie http://www.spas2b.com/blog/?p=3961   Not all clients hold the same (potential) value when it comes to your business.  So it’s important to consider why you might be handling a client you only see twice a year, the same way you are handling a client that comes in every week.  Continue Reading...]]>   Not all clients hold the same (potential) value when it comes to your business.  So it’s important to consider why you might be handling a client you only see twice a year, the same way you are handling a client that comes in every week.  Developing service standards based on existing and potential client value is a logical thing to do, if you want to do more of what is working, and less of what isn’t.  In a nutshell, your client value plan might be to: Develop life long relationships with your best clients Continually strive to convert good clients into great ones Deplete clients who have low value and no upward potential.    What is your philosophy on VIP service vs. non-VIP service…have you identified that?   How can you maintain service excellence and still take into account that your client base is made up of 3 or 4 tiers of value?  Do you believe every client should receive the same perks, advantages, incentives and benefits, no matter what value they bring to your business? You may be saying to yourself ‘I don’t need to make this another plan, our clients grow with us naturally’.  But isn’t that like saying ‘I don’t need to know my garden conditions or fertilize my plants, they’ll survive’…?   These 4 models vary in their approach, but the ultimate goal is the same…know the value each client brings to your business, as well as their upward potential, so you can maximize greater opportunities for growth. 1.  The ‘ABCD’ Method We see many custom adaptations of this model, but it’s really just ‘marking’ your clients on their performance, just as a teacher would mark their students. ‘A’ Rank – This ‘bread and butter’ category is made up of your best clients.  They visit regularly and often; they have a mid to high dollar spend that is always on the rise; they use, recommend and purchase your products and services for themselves, their friends and their family; and they are not overly demanding.  These are the clients that you want to ‘lock in’ as life long clients with your spa loyalty programs.  They deserve preferential treatment and premium handling. ‘B’ Rank – This ‘growth’ category may hold the greatest opportunities. Their value in all areas is less than the ‘A’ Rank clients, but these clients are still very good and it is well worth your while to explore their upward potential.  ‘C’ Rank – This ‘watch’ category needs close monitoring, as they can toggle either way. They may appear less desirable, be more price sensitive and less appreciative, BUT…they could also be just getting to know the spa world, still needing to learn the ropes.   ‘D’ Rank – These clients are a plain old nightmare and should be de-activated wherever necessary.  Their demands may be disproportionate to their contributions and they may not only be damaging employee morale, they may be discrediting your business.     2.  RFM Model – Recency, Frequency, Monetary Value Just how likely is it that certain customers could eventually become among the highest contributors to your business?  The RFM model can help you determine which customers hold the most upward potential, based on current and historical data.  For example: Recency – A client who has come in this week may be ranked R1.  A client who came in this month may be ranked an R2, and a client who came in, in the last 6 months, may be considered an R3. Frequency – A client who comes in weekly may be ranked F1.  A client who comes in monthly may be ranked an F2, and a client who visits twice annually may be considered an F3. Monitory Value – A client who spends $500+ per visit may be ranked M1.  A client who spends $250+ per visit may be ranked an M2, and a client who is spending less than $100 per visit may be considered an M3. So your top tier client is an R1F1M1.  Your mid tier client is an R2F2M2, and so on.  By analysing this data, you can determine where your opportunities lie for cultivating better customers; or where your current system of ‘client handling’ may need to be re-assessed for better business outcomes.   3.  Data mining to find those ‘most likely to buy’ I read an interesting article that came to us through ISPA Smartbrief and Inc. Magazine titled “How to Find New Customers“.  This is a very worthy piece of the customer handling process, concentrating on self-discovery and who it is that you can really help the most. This could be a very useful exercise to help you gather serious/core clients, prior to launching a specialized treatment line or service regiment. 1.  Identify your customer – Your best customer is the one who feels the greatest improvement in their emotions when they purchase your products or services.  For example, is your ideal target the woman who feels more beautiful and youthful when she uses your skin care creams; or is it the woman who only buys the best, because she believes high ticket items must mean results? 2.  Define your ‘market differentiation’ – When you know who your ideal target is, consider your uniqueness.  Your ability to identify and convey your advantages to your ideal client makes it much easier to sell your offerings to them.  You have to remember that they could just as easily choose to go elsewhere to feel beautiful and youthful, if they don’t understand the benefits you offer. 3.  Narrow down your very best prospects – A tighter target is more likely to make more sales than a broad focus.  4.  Focus on your final list of prospects – Here’s where you concentrate your energy.  This list is now comprised of only those who feel the greatest emotional improvement and clearly understand the benefits.  They are therefore ‘predisposed’ to purchase from you.  4.  Segmentation by Client Lifetime Value (CLV) You can also base client handling decisions on the current dollar value of your clients, as well as what that might equate to if they were to remain a lifetime client.  Define client value by tracking their average spend per visit, multiplied by their number of visits annually, for example:  $250 per visit x 12 visits annually = $3,000 in sales annually.  To determine what CLV looks like, multiply the $3,000 by 20 years = $60,000 CLV.  Add to that what you expect from them annually in terms of referral business, gift giving, participation in special promos, cross-departmental sales, etc., to arrive at a final CLV amount. Then take this model one step further, and examine not just dollar value; but profitability.  As a naïve example; if this client is consistently purchasing a manicure, pedicure and basic facial during that $250 visit, 12x annually, you may be disappointed when you realize that her services all have low profit margins.  Her $ spend is good, but her bottom line contribution to the business is not.  Therein lies some very important data for the savvy spa owner/manager, to take action on.     Now, mobilize your Client Value Plan.. Develop a 3-step activation program:   Let your staff know who your top clients are Train them on how to sell more to your best customers Educate them on how to recognize those clients who hold greater potential.  Make increasing client value, a new way of doing business.       Is it time you join the 100′s of global Spa Owners and Managers who follow the Spas2b proven standards for success?     Register for your Spa Management Course Here   ]]> http://www.spas2b.com/blog/2013/04/4-ways-to-calculate-client-value-and-grow-your-business/feed/ 0 http://www.spas2b.com/blog/2013/04/rising-supplier-costs-raising-spa-prices-part-2/ http://www.spas2b.com/blog/2013/04/rising-supplier-costs-raising-spa-prices-part-2/#comments Thu, 11 Apr 2013 15:52:42 +0000 Leslie http://www.spas2b.com/blog/?p=3821   In Part 1 of this 2-Part Blog Series on Rising Supplier Costs, we talked about ’reflecting’, not ‘absorbing’ price increases, as well as the importance of setting standards for price increases in your business, ongoing.  In this Part 2, we’ll discuss the importance of cost containment in 3 vital areas; and how to increase your prices by using a spiraling method that will minimize the ‘shock wave’ and maximize your chances at profitability. Continue Reading...]]>   In Part 1 of this 2-Part Blog Series on Rising Supplier Costs, we talked about ’reflecting’, not ‘absorbing’ price increases, as well as the importance of setting standards for price increases in your business, ongoing.  In this Part 2, we’ll discuss the importance of cost containment in 3 vital areas; and how to increase your prices by using a spiraling method that will minimize the ‘shock wave’ and maximize your chances at profitability.   1.  Retail Costs and Commissions Paid  Let’s say if a jar of cream sells for $100.00, you have probably paid $50.00 (50%) for the cream; you may also be paying $10.00 (10%) staff retail commission on the sale of the cream; and your miscellaneous costs could be $5.00 (5%), which might include samples, testers, shipping, receiving, merchandising, etc.  This equates to $65.00 in costs for a gross profit of $35.00, or 35% on that $100.00 sale. Now, if the cost of that jar of cream increases by 5% over a period of time, but you don’t reflect that price increase back onto your selling price, you are now paying $55.00 (55%) for that $100.00 jar of cream; you are still paying $10.00 (10%) staff retail commission; and say in addition to that, your miscellaneous costs have also increased 1% to $6.00 (6%), so your costs are now $71.00, for a gross profit of $29.00, or 29% on that $100.00 sale.  **With these already slim margins, you may want to consider fluctuating staff retail commissions with costs and profit margins, so a consistent, across the board 10% retail commission may not always to be fair to the business.  For example: If you are discounting product prices by 15%, staff commissions might be discounted by 15% as well.  So 15% off of the regular 10% commission would equate to 8.5% commission paid.    2.  Skin Care Product Discounts Let’s consider again, that 5% supplier increase as mentioned above.  You absorbed that increase, yet you still decide to run your annual 15% spring discount on skin care products.  So, at the top, your product costs are now 55%; factor in the 15% spring discount; staff commissions of 10%; another 5% for miscellaneous promo costs; and your total costs to run this promotion are now at 85%.  This means you will make a 15% gross margin on any revenue that is generated from this promo.   An across the board discount of 15% on skin care is not a great idea to begin with, particularly if you continue this practice of absorbing price increases year over year.  Based on the above hypothetical situation, you only have 15% left before you start to lose money on your annual spring promo.  And a point not to be taken lightly, is that these are gross margins; you still have to pay your operating expenses and with these kinds of margins, it will eventually become impossible to profit.      3.  Service Pricing and Staff Wages In the spa industry, it’s very common to see staff being overpaid, even in normal circumstances.  But in addition to that, if you are also absorbing supplier price increases on products, rather than reflecting those increases on your treatment menu, you may now not only be overpaying your staff; but you could be overpaying them on under-priced services.  If over the years you continued to absorb those increases, and still gave your staff the occasional wage increase, you could eventually be responsible for seriously crippling your business.   Ignoring some or all of these three situations has the potential to cause a substantial erosion in profitability.  Just as your suppliers have to increase their prices in tandem with their increased costs of doing business…so must you.       How to Increase your Prices One of the best ways to stay in line with escalating business costs, is to have continually escalating prices.   This method can lower price sensitivity, allowing business to continue as normal: Begin with one product line and one service category.  Slowly increase each product within that line and each service within that category on a gradual basis and in small increments.  Move to the next product line and service category, slowing increasing them on a gradual basis and in small increments, until you have covered all of your product lines and service categories; and then begin again This ‘spiraling’ method can be discreet and often go relatively unnoticed.  But you still need to ensure your staff understand your philosophy and can provide a clear and concise response to clients, should questions arise.   Staff and clients must know and believe that these increases are warranted and that you are acting in the best interests of the business, as opposed to just being greedy  If you make these perpetual increases small enough, they don’t need to be announced to your clients, but if you choose to make more profound increases, a short lead time announcement via signage may be a good plan.  **If you are currently paying your staff both product and service commissions and do choose to adapt this spiraling method, now may be a good time to consider other methods of compensation, because with commission, every time you have a price increase, your staff will get a raise whether they deserve it or not.  When you are handed price increases, it is the most legitimate reason for you to hand an increase down to your clients.  No one likes it, but it is a fact of doing business.  Remember that being a business owner is not for those who are afraid of the numbers.   Successful business owners MUST do their math.   Do you want to enjoy steady financial gains for the life of your career? Check out our Spa Finances Bundle!   ]]> http://www.spas2b.com/blog/2013/04/rising-supplier-costs-raising-spa-prices-part-2/feed/ 0 http://www.spas2b.com/blog/2013/04/rising-supplier-costs-raising-spa-prices-part-1/ http://www.spas2b.com/blog/2013/04/rising-supplier-costs-raising-spa-prices-part-1/#comments Tue, 02 Apr 2013 18:03:45 +0000 Leslie http://www.spas2b.com/blog/?p=3861   This Part 1 of our 2-Part Blog Series on Rising Supplier Costs will cover the importance of ‘reflecting’, not ‘absorbing’ price increases, as well as an introduction to setting standards for price increases in your business.      Running a profitable spa business takes experience and know-how It’s very important that you watch that thin line between profit and loss like a hawk.  Continue Reading...]]>   This Part 1 of our 2-Part Blog Series on Rising Supplier Costs will cover the importance of ‘reflecting’, not ‘absorbing’ price increases, as well as an introduction to setting standards for price increases in your business.      Running a profitable spa business takes experience and know-how It’s very important that you watch that thin line between profit and loss like a hawk.  As business costs rise, so must your prices.  Let’s say your revenue has been increasing year over year, but you are still left with a perpetual and mounting loss in profits.  As you think back over the last 12 months, you are reminded of the numerous increases in your operational costs that you chose to ‘absorb’ rather than ‘reflect’ back into the business, for example: your renewed lease payment increased significantly; utilities went up; you signed an expensive maintenance and housekeeping contract; your new webmaster is the twice the price of your old one; and payroll taxes continued to rise.    Not only are your fixed operational expenses demanding more and more from your gross profit line; your COGS are eroding that thin line too, as your multiple product suppliers continue to hand down price increases.   Let’s zero in on a very common oversight seen in spas, which is the choice to absorb supplier price increases, rather than reflect them back into the business.     Supplier Price Increases: Are you absorbing or reflecting? When you started your business, if the mark up on retail skin care products was 100% / 50% gross profit, you need to strive to maintain that, forever.  If product costs on your facial treatments hovered somewhere between 5 – 15%, you need to strive to maintain that forever, as well.   When your costs of doing business increase, as in the case of supplier price increases; you must proactively offset that increase to avoid ongoing gross profit erosion.  That means implementing price increases in both your retail products and your service prices.  If you fail to do this ongoing, you are effectively placing your spa on the extinction list.  And if you are absorbing rather than reflecting your supplier price increases, are you also still continuing to make the same business decisions you always have?  For example: Are you still paying 10% retail commission to your staff on those eroded profit margins? Did you still opt to offer that 15% spring discount on skin care products, on top of those eroded profit margins? Maybe you even raised employee wages on those now under-priced treatments suffering from the same eroded profit margins?   It’s critical that you maximize profits within your business, not just sales.  If you know your product and service margins intimately, you will recognize when you need to make changes.  Remember that price is only one of the reasons your customers buy from you; but if you believe it is the only reason, they will believe that too.  Regular price increases are a necessity Your costs of doing business will definitely rise year over year, and these increases must be reflected in your prices so that you can enjoy running a robust business enterprise.  Otherwise, what is the point?    Set your standards for increasing prices and make it a way of business As you contemplate increases, always calculate what the impact might be on the business and decide on an approach that ensures its success.  Do you need to implement new value incentives (real and/or perceived) in tandem with product and service price increases to turn a possible negative impact into a positive one?  A sudden “across the board” increase may not always be the best choice, as it can cause too much of a shock wave; but each business owner must decide what the best method is for their particular business situation.  If any of these points resonate with you, be sure to tune in for Part 2 on Rising Supplier Costs, where we’ll discuss the importance of cost containment in these three vital areas: Retail Costs and Commissions Paid Skin Care Product Discounts Service Pricing and Staff Wages We will also discuss how to increase your prices by using a spiraling method that will minimize the ‘shock wave’ and maximize your chances at profitability.   Do you want to enjoy steady financial gains for the life of your career? Check out our Spa Finances Bundle!   ]]> http://www.spas2b.com/blog/2013/04/rising-supplier-costs-raising-spa-prices-part-1/feed/ 0 http://www.spas2b.com/blog/2013/03/team-bonus-a-good-recipe-for-a-bad-idea/ http://www.spas2b.com/blog/2013/03/team-bonus-a-good-recipe-for-a-bad-idea/#comments Wed, 06 Mar 2013 20:30:35 +0000 Leslie http://www.spas2b.com/blog/?p=3603       I recently came across a really great blog written by Sally McKenzie of McKenzie Management; a dental management solutions company.  Her article on Bonus Plans really resonated with me, so I’ve decided to ©SPAdapt her blog and target it to the global spa industry.  Continue Reading...]]>       I recently came across a really great blog written by Sally McKenzie of McKenzie Management; a dental management solutions company.  Her article on Bonus Plans really resonated with me, so I’ve decided to ©SPAdapt her blog and target it to the global spa industry.  I know many of you struggle with the whole team bonus model, and hopefully this piece will help you make decisions that are both sustainable and beneficial for everyone involved…  There are many moving parts to consider when calculating team bonuses.  So many in fact, that some spas simply opt for the ‘gut feeling’ approach and end up assigning bonus dollars to the team when it ‘feels right’… and in dollar amounts that follow fairly rough scales and thought processes.   It would be so easy to say all staff members will receive the same bonus once a campaign is over, or quarter-end numbers are in, but that doesn’t work in the real world.   Tiers of Seniority:  The first team bonus challenge Seniority often dictates scheduling and client bookings, which in turn can skew service and sales opportunities.  Because of this, it’s pretty fair to assume that the more senior positions will probably be in a position to attain higher level contributions and therefore realize higher rewards, more easily.  But then the question becomes, what is the criteria you used to award a staff member seniority?  Staff only deserves the benefits of senior status if they meet the highest tiers of criteria, but what criteria is that exactly?  Do you know? And will senior members come to believe that they are the main bread winners in the bonus campaign, demanding more and feeling disgruntled if they aren’t recognized and rewarded sufficiently for their value and results?  On the other side of the coin, are your junior positions enjoying fair play and opportunities?  Does a team bonus take away from metric monitoring?  If you’ve read our previous blogs or listened to any of our webinars on KPIs, you know we’re fans of tracking individual staff performance stats.  So if you have set up this quarter’s campaign to reward staff with a bonus simply by saying; ”If we make more money, you’ll get rewarded”, you’ve effectively just taken the focus off the real business performance indicators, and put it solely on the money.  You may make your goals for the quarter for any number of reasons, for example; retail sales were up because staff now have $ signs in their eyes (which is partly great), but what happens if at the same time this causes quality of service to go down and therefore causes a drop in client prebookings, service sales per square foot, referrals and retention?  Normally, as metrics improve, so does revenue, that’s the whole idea behind monitoring results; but in some cases and as with this (extreme) example, you can see that there is potential for the two to come in conflict.  Who’s really winning with the team bonus model? As Sally states in her blog, consider that staff get paid their usual wage whether sales are up or down, and they get their wage plus a bonus when sales are up – that’s a win-win.  Spa Owners benefit when sales are up, but they still have to pay base wages when sales are down – that’s a win-lose.  In the spa business, it helps if your pay structure is based solely on productivity (fee for service), but many spas pay a base hourly wage now, so that means you must either be able to schedule your staff through the eye of the needle to minimize gross profit erosion (paying staff based on no sales), or send them home during down times.  Neither of these scenarios are good business practices.  If you do find yourself between this rock and hard place, remember that if staff do stay on site without administering services, get them busy with Mini Marketing assignments that will help generate revenue in the future.   Delivering the (good or bad) results to your staff Keep in mind that a team bonus really should be based on profit, not sales.  So this means your employees should probably have some kind of understanding of how the formula works.  The problem is that Owners often hesitate to reveal financial information to their staff, and their staff don’t really care about those details anyways.  So when the quarter is over and everyone sees that sales goals have been met, how will you tell them that you didn’t realize a profit afterall?  In fact, this isn’t even your staff’s fault, unfortunately the responsibility for profitability lies squarely on your shoulders.  So if you continue to run your bonus campaigns based on profitability and never actually reach profitability, you may be digging yourself a very deep hole.  How do you know if Team Bonus is right for you? Experience tells us that ideally, staff wages should run somewhere between 20-35% of service revenue.  The lower end is best wherever it is fair, because don’t forget you still have payroll burden and any other staff expenses that must be added to your total staff costs.  But in many cases, we see wages running too high, at upwards of 35-50% of service revenue.  So the bottom line is if you are within an acceptable wage/service % ratio, you will stand a chance at profitability and therefore a team bonus may be feasible.  BUT, if you are out of bounds on this ratio, you probably need to reassess your staff compensation before you can even consider a team bonus.  Your COG may be depleting profits so significantly that a team bonus program is impossible for you to reap any benefits. Is your team bonus and your good intentions becoming an exercise in frustration, or even worse, a bone of contention among staff?    If you still want Team Bonus, what should you do before you push “GO”? Understand your numbers intimately so that you can develop a team bonus formula that really works. Create a participant ‘eligibility profile’ and know what your disqualifiers are, including everything from staff attitudes to actions. Educate staff on the very basics of the team bonus formula, eligibility and disqualifiers and make your tracking documents transparent.  Keep the program dynamic.  Make it clear to your staff that ‘they’ and ‘it’ are under constant evaluation and things may change…and probably will.  As you move through the process of determining if team bonus is right for you, we’d love to hear your views.  Do you consider it to be a work in progress, needing time to perfect; OR is team bonus the best recipe you’ve ever seen for a bad idea!   Whatever your situation, there will be no mistakes if you’ve done the math.  Enjoy!   Check out our Spa Finances Bundle and enjoy steady financial gains for the life of your business.   ]]> http://www.spas2b.com/blog/2013/03/team-bonus-a-good-recipe-for-a-bad-idea/feed/ 0 http://www.spas2b.com/blog/2013/02/continuing-education-are-you-self-propelled/ http://www.spas2b.com/blog/2013/02/continuing-education-are-you-self-propelled/#comments Thu, 28 Feb 2013 05:00:00 +0000 Leslie http://www.spas2b.com/blog/?p=88   “Self-Propelled” Professionals are a Businesses Best Asset Success overall, depends largely on your mind’s momentum I’ve heard it said that a truly motivated, forward-thinking business professional spends an average of 10 – 15 hours each month on continuing education. Over a 12 month period, that equates to 120 – 180 hours of boosting your knowledge base through: 1) Seminars, webinars and trade show presentations; 2) Participating in advanced courses of study; 3) Reading, internet research and data collection; 4) Car audio recordings and videos; and 5) Your choice of any of the mind-expanding resources that are out there and available to you. Continue Reading...]]>   “Self-Propelled” Professionals are a Businesses Best Asset Success overall, depends largely on your mind’s momentum I’ve heard it said that a truly motivated, forward-thinking business professional spends an average of 10 – 15 hours each month on continuing education. Over a 12 month period, that equates to 120 – 180 hours of boosting your knowledge base through: 1) Seminars, webinars and trade show presentations; 2) Participating in advanced courses of study; 3) Reading, internet research and data collection; 4) Car audio recordings and videos; and 5) Your choice of any of the mind-expanding resources that are out there and available to you. How’s it looking so far? Personal growth always translates into a business asset Those who consider education and self development as a top priority in their careers are often more confident; demonstrate greater potential; obtain higher salaries; and experience deeper rewards in both their business and personal lives. When you take initiative, you are taking control. When you are in control, you are afforded more opportunities. Well planned, decisive action on your part will always beat a spontaneous, reactive approach. Understand first that business is a competition no matter what level you are at, and also understand the importance of always having targets and goals. First moves and head starts allow you to reach your targets and goals at a faster pace in order to establish new ones. Education speeds up your mind’s momentum and that momentum is what determines your course. A well educated professional is able to develop personal strengths and then align those strengths with newly surfacing demands. They extract hidden opportunities from the marketplace that gain them slender, steady advantages for more profitable outcomes. Know your target AND their hot pursuits Who is your target? It might be a client; a potential employee; or a future employer. Whomever your target is, if you really want to win them, you must know their toughest challenges and primary goals, in other words, their “hot pursuits”. Once you know what those are, you can develop your unique advantage and market it specifically and graphically as the solution to those hot pursuits. Continuing education and deliberate self development are the two best ways to get noticed and rise above mediocrity into the upper echelon of quality spa professionals.   It’s a proven strategy no matter what line of profession you are in, start with something, and turn it into something bigger (and better). We are surrounded by hidden, untapped opportunities in this industry. Why not position yourself to enjoy them by expanding and diversifying your talents? And perhaps the greatest bonuses that come with education, are the soaring feeling of reassurance; and sense of camaraderie …things we all look for every day.   As you are fed with knowledge, not surprisingly, when opportunity is at the door, you will be the one in the driver’s seat. It’s all about supply and demand, and when you hold the solutions to answer to the demands of your target client; target employee; or target employer, the outcome will always be turned to your advantage. So, perhaps your strategy will be to attract more opportunities by packaging yourself not only as a resource, but as a solution.   Sound interesting? You can accomplish all of this by giving your career a solid, committed, forward thrust into the world of continuing education. See more on Spas within our Spa Business Management Education Courses & Training Tools   ]]> http://www.spas2b.com/blog/2013/02/continuing-education-are-you-self-propelled/feed/ 0 http://www.spas2b.com/blog/2013/02/should-60-minute-spa-treatments-become-75-minutes/ http://www.spas2b.com/blog/2013/02/should-60-minute-spa-treatments-become-75-minutes/#comments Mon, 11 Feb 2013 05:00:00 +0000 Leslie http://www.spas2b.com/blog/?p=54     A question submitted to Spas2b: We are just doing our menu of services and have always thought we should book on the hour and complete the service in 50 minutes to still allow for clean up, etc. within the hour.  Continue Reading...]]>     A question submitted to Spas2b: We are just doing our menu of services and have always thought we should book on the hour and complete the service in 50 minutes to still allow for clean up, etc. within the hour.  I have heard that some spas are adding 15 minutes to their service booking times to be able to give a full 1 hour service and still allow for clean up and sales.  Is this a good idea? Our Response: If you are going to add 15 minutes to each treatment, for each spa professional, you have to really understand the math; how this decision will impact revenue; and what you will do to compensate for possible lost revenue due to this increased time slot.  Those additional 15 minutes must supplement revenue that day and/or solidify business opportunities for the future…but ideally; both.   Let’s just take a quick glance at what the math might look like: Stats we used for this calculation: 1 Staff member works 8 hours per day, minus 1 hour lunch 7 hours = 420 available minutes per day for treatments $90 Average Service Price Math for a 60 minute treatment: 420 minutes ÷ 60 minute treatment = 7 potential treatments/day 7 x $90 Average Service Price = $630 potential revenue/day Math for a 75 minute treatment: 420 minutes ÷ 75 minutes = 5.6 potential treatments per day 5.6 x $90 Average Service Price = $504 potential revenue/day Lost Revenue from 60 minute to 75 minute treatment: $630 – $504 = $126 lost revenue/day $126 x 5 days/week = $630 lost revenue/week $630 x 4.33 weeks/month = $2,728 lost revenue/month $2,728 x 12 months/year = $32,736 lost revenue/year $32,736 x 10 staff = $327,360 total potential lost revenue/year.   *If each of your staff sold the equivalent of lost revenue each day, week, month and year, this extra 15 minutes may be viable  Example:  If your 75 minute treatment program is working, you should see your 10 staff members generating an additional $327,360 in retail/year…is that a realistic expectation for your business? AND / OR Significant increases in not only retail sales, but also client retention rates; staff productivity; and gateway treatment sales.     Also consider that your gross profit is further eroded by the fact that you are still paying wages for those 15 minutes of lost revenue. **Keep in mind these numbers are hypothetical and do not take into account the numerous business variables you will need to consider to produce the most realistic projections for your situation.      So, you can see that if you are going to add 15 minutes per service, per spa professional, per day, every day, it is essential that every one of the following boxes is ticked: Staff must reinforce the outstanding results from the treatment the guest just had Discuss goal setting to solidify an ongoing relationship Introduce and educate guest on new product & service considerations for the future Satisfy business needs by making a sale equivalent to lost revenue Satisfy guest’s needs by sending them home with a solid maintenance plan Suggest their next appointment booking Bid them a fond farewell Staff to do guest service paperwork Ensure the room is turned over on schedule Be ready for their next guest. If your staff can accomplish these 10 things in the 15 extra minutes being allotted, it may be worthwhile for both your guest and the business.  Remember:  With anything in life, when there’s give, there must also be take. In closing, I must share with you a question that Guy Kawasaki posed at a Spa conference a few years ago, that I thought was quite profound.  He said: ‘If spas really want to provide exemplary service, why do they advertise 1 hour treatments and only give the client 50 minutes on the table?’   Is it time to analyze if your services really are satisfying both your guests and your bottom line?  Our Spa Finances Bundle is your solution to better profitability and business sustainability.    ]]> http://www.spas2b.com/blog/2013/02/should-60-minute-spa-treatments-become-75-minutes/feed/ 0