Making the most of what you already have can lead to a hidden revenue stream.
In the last issue, we discussed some of the basics of retail strategies for spas – but there’s much more to consider.
By now, hopefully you’ve recovered from what was likely one of the busiest times of the year. In the last few months, clients flowed in, spirits were high and now you’ve settled into a more normal pace of business. Now’s the time to take advantage of implementing best practices that can boost your retail and overall sales, and help keep your appointment books full.
First, a quick reminder about how important it is to have a retail mindset versus a product mindset (this was explained in the Fall issue). The difference between these two perspectives is everything in terms of selling products versus treating your space – no matter how large or small – like your clients’ home for expert advice on how to prolong the positive effects of the treatments they’ve enjoyed.
Shifting mindsets: Create a new January effect
The “January effect” is a term used by the financial industry to indicate a seasonal increase in stock prices during the month of January. In the spa industry, I like to use this term to do a shift in mindset that positions January as one of the biggest revenue opportunities of the year (along with July and August). November and December schedules are normally full, leaving little room to increase revenue. Months like January, however, are often lighter, leaving huge opportunities or capacity for revenue.
Traditionally, our mindset around January is full of negative stereotypes that lead to limited thinking: People have spent their money in December, clients have retail fatigue, people are too busy, everyone is in debt from the holidays, no one buys in January, or bargain-hunters need big discounts in January. Limited thinking equals limited outcomes. Instead, consider these facts: January is a time of renewal and a fresh start; most women report being gift-givers and welcome “permission” or encouragement to spend on themselves; and many clients are looking for downtime in January to make space for physical and mental restoration after a busy holiday season. How can your business support these universal truths? Think about what your client promised him- or herself for the New Year; chances are that they included more time for self-care, adventure and connection – things like a monthly massage or pedicure, trying new services and treatments, more “me time” or time with friends and family.
I have a client for whom we designed a loyalty program that allowed their clients to earn dollars toward future services with each treatment and based on the gift cards purchased. The business started promoting this offer in September, knowing the higher frequency of spending/visits to their spa between September and December. They specifically allotted these dollars for services or treatment between January 1 and February 15. This will be the third year that they’ve successfully created a successful January effect, filling their service providers’ schedules 60 percent more than before this campaign.
Better together: Bundles & kits
Want to get serious about increasing your per-client spend? One of the best ways to achieve this by using what you already have is to stop relying on your product lines for “kits” (and stop complaining that your product lines don’t create speciality kits year-round) – instead, create your own.
There are two simple ways to get products into your clients’ hands and homes, and to bring more cash to your bottom line. The first way is to remember that product lines are logically designed, with many products formulated to compliment each other or for using in succession with each other to maximize their effects. This means that you can customize what and how you sell a product line. How powerful would it be to tell clients that you’ve created customized kits for their home use? You already have the products, now you just need to decide what the kits will be.
The expert service providers reading this already know that, for example, a cleanser and moisturizer go together, so why not sell them together? Now consider masks and scrubs, serums and moisturizers, eye creams and lip products, shampoo and hair masks – the possibilities are endless. You don’t need a special bag, pouch or container to present these in, and you don’t need your reps’ permission, although their support is always appreciated. What you do need is a compelling name and be ready to educate the client on why and how these products are better together.
Some winning kit names include The Starter Kit, The Brightening Kit, Acne Defense Kit, Anti-Aging Kit or something that aligns with your spa, salon or clinic’s brand. If you like to bring in nature or a natural theme, use names based on the elements. If you like more glitter and sizzle, get creative with kit names like Glow Getter, Date Night/First Date or Me-Time. Kits that are designed and positioned as being “favourites” sell exceptionally well. Try asking lead staff such as a top esthetician to create a kit and add this description to the kit name, such as “Sarah’s Favourite,” “Top Seller” or “Most Popular,” and watch your staff engagement and sales climb.
Another option to increase per-client sales using your retail products is to bundle them. This is a more creative method of gathering products that may not be from the same line and go well together, by grouping them into a bundle that appeals to clients or gift-givers; for example, lifestyle products such as post-massage moisturizers with warm wraps and essential oils, or nail polish with cuticle oil and jewellery. Create a “Relax and Restore” bundle so that the products used for the massage your customers rave about can be enjoyed at home or whenever they need it. Somehow, while most shoppers may have been open to buying one product, when presented with a bundle, they often buy the larger package.
The average amounts that customers spend are compelling:
|Single product sales||Kits or bundles|
|Moisturizer: $55-$85||Starter kit: $130-$325|
|Mask: $65-90||Brightening kit: $150-$255|
|Serum: $90-$255||Anti-aging kit: $335-$520|
|Average total: $210-$430||Average total: $615-$1,100|
One commonly asked question is: Do I need to discount my kits or bundles? The answer is no, you don’t have to! Think how you can add value. Kits normally have added value, and bundles are normally discounted. For kits, if buying four products costs $325, you can charge the same price, you can offer a discount (e.g. save $25) or you can add in an extra product or a service. Be sure to note the value of the product or services you are adding (e.g. glycolic peel valued at $90, or complimentary essential oil valued at $70). Test pricing scenarios and add-ons to be sure you’re providing appealing incentives, without offering excessive discounts. Your staff will be more likely to sell kits or bundles that provide real value to your clients.
Pro tip: Use inventory you received from large product orders, leverage business building points or ask your rep for a few gratis products to use as value-added products.
A milestone is a meaningful date or event: birthdays, engagements, weddings, new jobs, anniversaries, reunions, babies, empty nesters and the list goes on. For some, every Friday is a milestone for surviving another week! What are your client’s most meaningful milestones? In the spa industry, birthdays are the most commonly recognized event. Some spas choose to collect major milestone information like birthdays and send a simple note of acknowledgement, while others provide an incentive such as a savings or a service. Both are effective. Think about the main birthday milestone, like turning 30, 40, 50 or 60 years old. How can you position your client message to help them mark their milestone and enter this new chapter feeling their best? Be strategic: Send these types of birthday milestone offers up to one month before their special dates.
Consider the couples market. Once a couple visits and enjoys your services together, you helped them create a ritual, an anniversary of their time together at your spa. Clients always appreciate that you take note of what we call their loyalty anniversary – the date or length of time they have been a client. Yes, it takes more attention to detail to track this data, but the returns are creating another opportunity to invite them back for a visit versus hoping they’ll return.
Pro tip: Asking key questions on booking calls (or intake forms) can provide valuable information. Try asking, “Are you celebrating any special occasions or anniversaries or coming in for some relaxation?” Customize the questions to suit your business.
Downtime can be learning time
There is a direct link between the number of learning/training hours you provide for your team and your revenue. If nothing else, use January and slower times to tackle the long list of tasks that you’ve been putting off, including doing some structured learning sessions, refresher sessions or advanced training.
Call on your reps to step in and offer training, encourage staff to use time to treat each other or at least observe services so that they can be better cross-sellers and be better advocates for services and products. It’s true: Spas, salons and clinics that provide more staff training, of almost any kind, also experience higher revenue.
Pro tip: Do the most difficult thing that you’ve been putting off first.