I bought Spa Lamar, a struggling Scottsdale, Arizona, day spa, in 2004, and it seems like I have been remodeling it ever since. The initial renovation was praised by local and national media, and happy clients flooded in. Business was good back then and, within three years, business tripled and the building expanded from 5,000–14,000 square feet. The second renovation in 2007 brought more rave reviews and all looked rosy until the economy started to slide in 2008. Selling a luxury service in a crashing economy is not for the faint of heart. If declining revenue wasn’t enough of an obstacle, two new challenges appeared on the horizon, creating the perfect marketing storm.
In 2008, Groupon introduced the world to 50–90%-off deals, which very much appealed to cash-strapped consumers. Other daily deal sites soon followed. This was devastating for day spas, training customers to believe that spa services were worth 50–90% less, when they had barely been profitable before. Then resort spas, which are prevalent in the Scottsdale area, started embracing the daily deal model, too, bringing prices down to the day spa level. Having to compete with resorts on price was only half of the problem. When budget-conscious customers discovered high-end resort spas, their décor expectations skyrocketed. Clients who have glimpsed a $30 million resort spa are bound to be a little disappointed when they visit their neighborhood day spa. If that were not enough, review sites, such as Google and Yelp, gave these disappointed divas a megaphone.
The custom Tuscan finishes that our clients loved a couple of years ago were suddenly being called dirty, dated and tired on a worldwide platform by young, trendy spa reviewers. Even though 98% of the spa’s reviews were stellar, the sting of any negative comments about cleanliness was potentially damaging to the business’s hard-won reputation. Spa Lamar’s staff of housekeepers works 100+ hours per week to keep things spotless, so cleanliness is taken very seriously. If the Tuscan faux paint with antiqued corners looked dirty to the untrained eye, it became clear that it was time to freshen things up. The challenge was to create the clean, modern look that our new clients craved without losing the casually elegant island ambiance our loyal clients loved. So, how is a day spa on a shoestring budget supposed to compete with multimillion-dollar resort spas? With impeccable service, plenty of paint and some well-placed “wow.”