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Game Changer: Keeping Your Business Relevant and Growing

Something happened in mid-2007. We started paying attention to the economic news because it affected us. It affected our guests and I feel it profoundly affected our industry in several ways.

Our Guest/Clientele changed in the way they viewed spa services and how (if) they were willing to pay for them. Seemingly overnight, the security of a growing income and house values changed. We were rattled and our financial futures felt uncertain.

If we were a day spa, we started seeing our guests less frequently. If we were a med-spa, we saw guests less apt to buy the higher priced services and series. If we were a destination spa, we started seeing cancellations and our hotel occupancies dropped. 

Our clientele found themselves in uncomfortable territory: those with jobs and those without, those with money and those having to make difficult choices on their personal spending. With the spa and wellness industries catering to an image conscious and active clientele, this was pretty difficult to deal with. If you want to get a sense of how the Wall Street collapse affected our industry, ask a spa operator in downtown Manhattan. Their clientele may have been working for one of the financial giants.

What happened to the psyche of our clients was much more profound. Suddenly, they were forced to evaluate their lifestyle and spending. The opulent lifestyles of the insurance moguls were viewed with aghast. People immediately became conscious of how conspicuous spending would appear to those who might be in danger of losing their jobs or homes. If people were to spend on luxury items, they didn't want to be obvious about it.

Fast forward to the present. We're seeing signs of recovery, there is job growth, and according to the statistics, the economic recovery has begun. Although we are recovering, we are different now. Our industry is different and as operators, we have had to make changes in the way we do business.

Game changer. In the resorts and hotels, the spas were an image booster. It helped define the quality of the resort. It generated big dollars and helped promote the overall resort. You've seen the statistics and read how profitable the spa is supposed to be. 18 percent, wasn't it? Then that darn economy thing happened and the rules changed. Occupancy declined, there were fewer guests and the spas were not just an amenity anymore. Now they are expected to be more profitable. How?

We have done a great job getting clients to fall in love with our services. Had that economy thing not happened, there is a good chance we would still be experiencing some level of the meteoric growth we had become accustomed to. But, as much as they would love to have services, they can't rationalize the expense. So what happened? Groupon, Living Social and other coupon sites happened. Wow! They can still have their services and pay less than they were before! What a deal! Sign me up! They are back in droves at a fraction of the cost. Now instead of getting your Blissful Facial for $90, 160 people (at last count) were buying a Microdermabrasion Facial with a one-hour massage on the Seattle Living Social page for $57! So Living Social gets $9,120, the spa gets a nice big check for $5,472 and has to schedule and pay their staff for 240 hours of spa service time. The only way this works for you as a business owner is if you can sell a whole bunch of retail and re-book them. But that economic thing is working against you. 

Another very important factor to consider in making this a successful campaign is to involve your staff from the beginning. Their compensation for the discounted service needs to be discussed. Perhaps they can receive a fee per service or their normal compensation if the client re-books or purchases a defined dollar amount of retail product. You want to make sure that the clientele coming to your business as a result of the coupon deal receives the same excellent service and level of caring as your regular clientele. You don't want your staff treating the new clientele like "coupon people". Spa services are viewed as truly a luxury item now. If you are going to do a coupon like this, make sure you have a comparable service your clientele can buy that is a gradual step up from the coupon price. Don't make me pay full price for the next few services. Price is an issue and if I don't like your pricing, I'm looking for the next coupon somewhere else. Groupon is wreaking havoc on client loyalty. Game changer.

Our clientele will make room in their budget for spa, fitness, health, and wellness if they are getting results. It is important for us to gain a wider perspective of what is happening in and around our industry. One of the next game changers is the cost of health care. As health and wellness professionals, we have a unique opportunity. The fusion of spa and medical/wellness is upon us. Physical and mental health leads to inner confidence and personal wellness. If we merge preventive treatments that address stress reduction, weight loss, pain treatment, and cardio health into our businesses, we are creating services that our clientele wants and needs. We've built the facilities and are providing many of these services already. Now we have to re-invent, re-engineer and re-market our businesses so that we remain current, relevant and slightly ahead of the next game changer. 

Want to talk about how prepared operationally and financially you are for the next game changer? As always, the first call is free. Use it.


Call 888.727.5489 or e-mail us atMonte@WellnessCapital.com.


ProKnowledge Workshops from the Day Spa and International Medical Spa Association 

I'll be presenting "Budget Intensive – An Advanced Business Planning Workshop", "Good Debt, Bad Debt. Know the Difference" and "Using Consumer Data to Deliver What Your Clients Want NOW!"

I am also honored to be seated on a panel discussion called "The Fusion of Well Being: What the Future Holds" with my colleagues Dr. Tamyra Comeaux and Alfredo Carvajal.

To learn more about the ProKnowledge Workshops, visitwww.ProKnowledgeWorkshops.com. I hope to see you in Nashville, Minneapolis, or Portland!

Wellness Capital subscribers get a 25% discount for the Nashville Event by entering the number 25 under "Source Code" on the online registration form.