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Making the most of what you already have can lead to a hidden revenue stream.
In the spa industry, there are two ways to increase revenue and profitability: either make more money or save more money. Making more money means attracting more clients to your spa and selling more services or products. But there are ways to save, too.
Consider this advice from U.S. tennis pro Arthur Ashe: “Start where you are. Use what you have. Do what you can.” There may be some hidden value and simple efficiencies in your spa that will help you find savings.
Consider Your Equipment
Most spas and med spas have their favourite devices or technologies. That’s nothing new. But what top revenue-generating spas do differently is use each piece of technology to its maximum efficiency, taking full advantage of the functions offered by the device.
Unfortunately, some med spas are notorious for using only one to two main functions of a laser and then purchasing new equipment—even though the original laser offers the same treatment. A quick call to your sales rep will give you ideas for additional uses the device can offer, and you can learn what other spas do to maximize that machine’s capabilities.
For example, the Oxygeneo offers multi-use efficiencies. An informal survey of 10 med spas that use this device revealed that four of them invested in an affordable add-on called the Tripollar, a patented third-generation radiofrequency technology from Pollogen that works non-invasively to tighten skin and decrease facial wrinkles, including fine lines around the lips and eyes. With this add-on, these spas attract clients who are looking for a device-based facial and increase retention of more clients who already love their experience with this device but want to try something new.
As you search for savings, you need to objectively assess each piece of equipment you have and ask if it’s delivering the results that keep clients coming back. In other words, do you avoid or hesitate to recommend a service because past clients have been unhappy with the results?
Devices and technologies also need warranties, maintenance, or repair—and that costs. One spa recently decided that fixing a hydra-body treatment device just wasn’t worth it. After a review, the spa found that it was much more cost-effective to expand three of its top-selling services than to replace the one device.
During the first phase of the pandemic, fees for keeping warranties on lasers and other devices came as a shock to spa owners and managers, especially when they evaluated the equipment’s performance against the revenue it was bringing in. Many med spas that eliminated an underperforming device saw an increase in revenue within three months after “retiring” it. The revenue from the new service more than compensated for the decommissioned device.
At your spa, your most valuable asset is your staff. So, instead of hiring new staff, upskilling your employees within a culture of cross-functional training has been a long-standing, proven strategy for revenue growth. But having employees perform more than one job and contribute to two or three areas of your business means a shift in mindset and behaviour.
The benefits? It increases staff retention because people love doing work that gives them the opportunity to use their skills, talents, and passions. It provides coverage in multiple positions or areas of your business when there are staff absences or last-minute changes. Ask your team members if there’s an area of your business they could contribute to for two weeks and then return to their current role. Their answers may surprise you.
If you have the time and resources, book your staff for reciprocal treatments or services from teammates. Even if they’ve worked at your location for years, this simple activity instantly increases cross-promotions, organically promotes cross-credentialing without fake-sounding scripts, and boosts team bonding and morale.
Finally, don’t be afraid to eliminate products that continue to be your poorest sellers, and bundle your top sellers into kits or groupings. While reducing or eliminating entire product lines seems counterintuitive to increasing revenue, it has been shown to work. It keeps your selections clear and meaningful for your clients.
While strategically adding new product lines can increase revenue, it often requires a larger investment of time and money to achieve positive cash flow. Using your existing top-selling products is a more cost-effective, low-risk way to increase revenue. Determine if you can bundle these existing products to provide more value and better results for your clients. Identify your top-sellers and how you can feature them together to share their benefits with clients, and relegate the poorest sellers to the back shelves.
In the health, wellness, and beauty fields, there’s often a culture of looking for the “next best thing.” This pressure, along with a big dose of “what’s my competition doing”—thanks to social media—can be overwhelming for spa managers. The prevailing mindset is that we have to keep drastically adding or reinventing our offerings to stay competitive. But is that always the case? Before adding the next best thing, take a look at what you have or are using more frequently. You may be able to bring in untapped revenue more quickly, and easily, than you think.