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More Economic Influence

Stephanie Chwah, Owner, Touch Companies Inc.Wellness Center & Day Spa, Rosemont, Illinois

We use promotions more or less; we don’t like starting off with discouting services because sometimes when they see 10% it’s not a lot. Some services tend to bring in more money than others, so if someone is getting massage, we make more off massage than a mani/pedi, but they have to do both services in order to get the promotion. Both services get booked quicker, people are doing both services. If a client is in for a massage, we let clients know if there are openings during appointment reminders, we let them know that they got that service. Sometimes last minute clients, a lot of them will say yes as long as you offer it to them with an incentive of a promotion or discount, they accept it a little better. We still offer 10% or more off, but in a shorter amount of time.

We always have incentives for new clients, but we will offer 30% where they have a very limited time frame, if they don’t, then it’s just a reminder to get in. We do it for when we have a new treatment incentive or an upgrade or add on. And we do e-mail blasts when we are not busy. To fill up books, when most of our clients leave, we try to get them to reschedule right away. If they don’t schedule when they leave, they won’t schedule for months.

We give a chance for all of our therapists and technicians to promote themselves and their services more than we do when they’re busy. It’s good to bring in new clients and pamper those that they already have. It allows us to give them more tools to go out and use anything in the spa, mini manicures, paraffin, chair massages to allow them to utilize those. We’re in a fitness center, so when they see cross-traffic busy in the health club, they can go out and do half-off chair massages or free chair massages. We get corporate wellness centers that come in, and we have a corporate team building center, it allows corporations to come in and do trust building and go out onto the floor and give free chair massages and promote the spa. When there’s other clients getting nail services, most clients are open when other therapists will come in and talk to them and by the time that they leave they are getting in the appointment that day or scheduling for another week.

Sandra Donovan, Owner, Donovan's Serenity & Wellness Spa, Alpena, Michigan

We’re doing more addons as opposed to discounting, not taking away from the dollar amount we have coming into the spa. I’ve been spending a lot of time doing online classes; companies are doing more of that now which is really helpful about how to overcome the economic challenges we are facing. We want to offer value instead of discounting. We focus on increased value, so with a facial, we’ll do an LED hand treatment for free. It doesn’t cost us any money, it doesn’t cost the technician more to do and introduces them to a new element of hand care.

We’ve been looking to add a new service. Just this morning we decided to use Breakfast in Bed spa day where you offering facial, massage, manicure, pedicure with coffee scrubs, orange oils, egg whites, as a different type of promotion and we will put them in as a new intro to get people excited. We went to our clients and asked what they thought sounded really good this year. That’s adding a new service to what we’re doing. We’re working with our downtime with the staff working on DVDs and CDs from Eric Fisher, gleaning strategies.

We are being more progressive about cross-selling. For our facial clients, we are moving into hair a little bit more, with a facial client we will be offering a referral card to her friends and give 20% off on their color. Trying to work more efficiently on cross promoting. We’ve always done well between massage and facialists, but we’ve not done the hair area.

The economy is affecting us. Last year, sales were down about 3%. Michigan has been hit extremely bad. We are in a small nontourist area. The manufacturing companies we have have laid off a lot. Our clientele consists of professional working women, doctors, lawyers wives, so we’ve not felt it as much as some businesses. Our December sales were very good; we were up 2%. September, October and November. When things are tough, because of what we do, we focus on having a peaceful, serene environment. In stressful times, people need that. We try not to discuss downward things and think about the positive. When people come here, they are focusing on themselves. We picked up a new product, but they’ve sold like hot cakes. Within two weeks, we sold our inventory of 12. Things are tough, but there is still money there for things that are new that people are seeing results with. You have to be more creative and take a risk. And we definitely are doing more of personal referrals. Customer referrals. Our clients, we always give them a $10 Donovan buck to use as cash. We’re being more dedicated that we aren’t missing any referrals.

We are making our decisions more carefully. You know those business classes that you took, you are using those now. The tough economy is making people better stewards of their money. Their clients are being more careful. That’s the good thing. It has forced individuals and businesses to think about whether or not we really need.People trust what we say because we would never sell something we didn’t believe in.

I don’t know if I’m seeing this or just something I’ve read about, people are really looking for results and value for their dollar. That is part of the trend. Service trends, there’s not a whole lot of that, other than stress. When they come here, their question is “Do I have to leave.” We have to focus on addressing the clients needs and looking at their stress levels, try to reduce stress and be focused on results because they don’t have money to waste.

Rayda Ireifej, Owner, The Brow & Skin Studio, Huntington Beach, California

We used to do seasonal promotions according to the occasion that was coming up. We focused more on one at a time. Since things have changed, instead of going for a series, we are doing three promotions a month and always have some type of a product on promotion. In the past, we would look at a product and choose a product that they are really into. We focus a lot on personal e-mails. We send a mass of e-mails and our clients receive that. We have a lot in local magazines and literature, but mainly it’s e-mail. Just discount those prices. We’ve been receiving all these clients for a long time and they’ve been generous, so we’ve said that it is our turn. We’ve been very generous and are creating new treatments, too. Rowena is a great esthetician and wax technician, and we create the treatments according to what our charts tell us and that is good promotions. And it’s helping us and helping the clients.

Sylvia started sensing what was going on. Every woman wants to be beautiful no matter what. She’ll cut down on buying jeans and sneakers; the beauty industry is very fortunate. You listen to the news and follow up with other stories and they lose jobs and businesses and homes and we started picking that up at that time. That helped up have the clients realize that we are considerate and focusing on the clients. My acne clients are teenagers and can’t keep up their products, so I did a program on my own and tell them this time I want you to try this for two weeks, give it to you and let me know your outcome. They feel like you are giving them something they can take home. We put it in plastic containers and applicators and they do good, and at the same time I feel like I gave a hand to someone who really needs it and has a serious situation. More than 10 clients I’ve helped like that. I pick it up from the shelf and give it to them. They turn around a give you a hug and you really see difficult situations.

We’ve been going green and we’ve changed lots of things, the lights, paper goodies, cleaning products and Sylvia is on top of things. We’re abou 50% green and continue doing so.

Lydia Sarfati, Founder/CEO, Repechage

Tell me about your Facial Bar Concept?

Especially it is very pertinent for spas right now, and I have been noticing the last three years way too many facial rooms that are empty, low occupancy at the mega spas and I thought "What is wrong?" I am tired of hearing that hair is the business to be in. Why is it when we do it, it works, when I am at the salon we sell retail, what is wrong? Basically there is nothing up front that says that that spa is engaged in that spa activity. It is either hidden upstairs or downstairs. The clients that go through the door don’t ever see skin care activity.

Skin care products are hidden behind locked door. This formula spells disaster and lack of sales. I’ve shaken the industry creating the Facial Bar Concept, which is the solution to the healthy skin care business. Show and tell and you will sell. We’ve been doing it in stages, now it is full blown activity that takes place in the front of the salon in a comfortable makeup chair that reclines. When people walk in they say “What is this lady having done? I want what they have." We’ve created express facials, OptiFirm Eye Contour treatments, deep pore cleansing mask specific for oily skin, these are all 15-20 minute treatments and then put together a facial on-the-go treatment that’s a 30-minute treatment that allows the client to experience a deep cleansing and conditioning. This immediately creates retail sales and delivers booking for clinical treatments in the back of the salon (acne, anti-aging facials). The bar is an appetizer and for the main course they go into the room. It will increase retail sales by 300% and increased booking for 50%. It rolled out in October, and we have 10 salons that are doing the Facial Bar Concept, and I hope that in 2009 we’ll have 1,000 salons. That’s my aim and goal and objective. What I really wanted to do in the last quarter of the year is to test the ground, have market tests, and we’ve tested the waters in the different regions. I wanted to do it myself. I had to go to the salon and see it happening, see results and reaction and success so it’s not just a figment of my imagination.

Kelly Swalheim, Operations Manager, Balance Day Spa, Greensboro, North Carolina

It is slowly picking back up because the season is coming back into play. Once Christmas is past, people are more easy to spend their money in the spas. We normally were slow, but we saw an increase in slowness. We use Web sites in our local areas. specials just for those days. If we see that tomorrow we’re slow, let’s go ahead and place an ad for a 60-minute massage for the price of 45. We would put specials outside of our spa board like all walkins get one service, get another half price. All our service providers are hourly.

Discounting, some people tend to react more to, we do add ons, like 60-minute massage, hot stone for $5. It was hard to get the word out about that, but we would call them and they would agree. That seemed to help, too, although our massage therapists didn’t really like it.

We are focusing more on our current clients. Since it’s the new year, our computer system creates points. So bringing a client in, you get points for that day, referrals receive service for half-price. Sending out e-mail blasts. It’s a way to reward them and still get someone new in through the door. Marketing through the holidays, we haven’t really pushed anything. We won’t push that much for Valentine's Day but will wait more for Mother’s Day we do more for gifts card sales. Valentine's Day is a one weekend thing and they want to book a couple’s massage.

The biggest change happened in June 2008 when we went from commission based pay to hourly based pay. We marketed the clients and gave them to the service providers. Now as hourly, they have more time on their hands to help out around the spa, send out welcome cards, miss you spas; going hourly helped the team focus more on helping out. Especially with the economy, a lot of them are thankful that they are on hourly pay.

We are in a week-by-week day-by-day process. We’re just trying to see; if something’s slow, we’ll call an online marketing company.

Jane Wurwand, Founder, Dermalogica

We’ve long been a proponent of demystifying what skin care is all about and we pioneered this idea in 1989 when we opened our first concept store in Los Angeles. It was too early, it wasn’t successful. It was too early, the timing wasn’t right. It’s always been a pet project of mine because for me skin therapy has nothing to do with luxury, it has to do with skin health. We’ve never spoken about pampering or luxury or relaxation spa approach; it’s been our point of differentitation. It’s a necessity, a part of health and well-being like fitness or nutrition. It doesn’t require clients to be constantly in the dark and zen with whales singing, we’ve even had that as our mantra. Even through the dark days, I was about ready to give up. I’m actually excited about that economic downtown; it’s sounding the death knoll of the superfluous part of our industry.

Pampering and luxury doesn’t resonate, no consumer is going in that direction, it doesn’t feel appropriate now. We’ve been promoting this idea for bringing treatments out three or four years and now it’s really flying. I liken it to chair massage, when that started happening, it didn’t replace the one-hour massage in a quiet room, but it is in addition to that. Who would have thought that would ever happen? If people relate it to that. If you realize that massage is about muscle relaxation, it makes perfect sense that you would get that between flights. You can’t get into one of those seated chairs because they are packed. The seated chair massage hasn’t replaced the one-hour massage and the MicroZone, a 20-minute skin treatment outside of the room, doesn’t replace the one-hour in the room, it offers an alternative. It’s perfcect for this economic period.

Clients are reducing their spending on services. Dermalogica doesn’t sell to distributors, so we can talk to businesses about what’s happening with their business and we have a good barometer about what’s really going on. Services are down and in some as much as 28% from last year. The accounts that are heavily down, they are offering luxury pampering and indulgence. The accounts that are offering skin health, deep clean, those are still holding strong. The average spa is seeing drop in their services, the regular client who decided that they aren’t going to spend $100 on a treatment, they aren’t sure it’s doing anything for them. When they decide not to come in for a service, they feel weird about buying their products. Clients tell me that they feel strange if they are no longer going to that service provider, buying products. The end consumer doesn’t stop using the product, they look for an anonymous source to buy it from … we've seen an increase from our chain accounts.

As a manufacturer, we see this shift around where people are sourcing. Now this skin therapist is seeing a drop in clients and they aren’t seeing them buy products. You have to give clients the opportunity to come in and maintain their skin at a lower price point, a more results-oriented service and you have to give them permission to come in and buy product to maintain their skin at home. That brings us to the MicroZone 20-minute results-oriented treatment. Tell clients while they're cutting back on services, don’t let their skin go to hell; keep you exfoliation, extractions, hydration going, let’s come in for 20 minutes, have a MicroZone where you can focus on those aspects. It’s not a mini facial; we pick one priority and focus on that for 20 minutes. “You’ve invested so much in your skin, I would hate for your skin to suffer. Come in every few weeks and we’ll focus on extractions. Right now, let’s now let your skin circle the drain. If I have a more mature client , I would say you’ve done a good job on maintaining your skin, come in so we don’t have to rebattle back to that state in a year’s time. Figure out what is a client’s priority and eliminate all the other stuff that they don ‘t need.

If you do it in the open, you still have your rooms available for full treatments, but gives you an opportunity for a new service in a new area. Vidal Sasson was the first one to have an open plan salon and everyone else had a cubicle; in the 1960s it was unheard of. I remember people would say there is no way they will have hair colored in front of someone else. Then the concept of unisex was really novel. Pay attention to clients, and what they are doing for their well-being. They are having nails done at a nail bar, hair cut in front of everyone else, and as long as we keep hanging on to this idea that the relevance of our industry is luxury and pampering, it becomes less and less relevant to our client who is time- and money-pressed.

Anya Aderibigbe, Manager, A-Skin CareSalon, Arlington, Massachusetts

We would hurting be if we weren’t doing anything about it. We are doing so much to try and catch up with it, but we started preparing for it awhile ago. We are putting all of our efforts into making our spa work better every moment.

We have decided to cut back on discounting if possible because, from what we’ve been reading, it seems like a bad trend. Instead of that, we add on services for free. We try to pick things that wouldn’t be very time consuming to add on. This month we have a special where we do a free mini facial when a client gets a stone therapy. That’s easy to incorporate. You’re already massaging the client’s body anyway. It’s not hard to do that. For Valentine's Day, we’re having a special where we will have a free design with a Brazilian bikini.

We’re trying to get as many clients as we can, and we’re trying to tackle all aspects of marketing harder than before. We’re constantly reexamining our marketing strategies and revisiting our services and are trying to see how we can make our menu more appealing to people and seeing who we can collaborate with in order to attract more customers. We’re doing a collaboration with Edible Arrangements, just trying to come up with ways to get as many people through the doors. We are a small business, so we just hope that we know our clients well because we’re a small family owned business. Our town is not huge, but it is a pretty predictable clientele for the most part and brainstorm about what they might like and we try to add personal touches to what we do. We always greet them as friends and family because a lot of them are like that because they’ve been coming here for years and we write them personalized cards.

We’re really focusing on marketing, but we are definitely not lacking on keeping them. We just wrote personalized cards to a huge chunk of our clients and we provide really good service because they know that they can’t find an equivalent to us somewhere else. I think a lot of people might cut things out of their budget, but they will keep coming back for smaller things: facials, bikini waxing they won’t stop. We sell our own line of products and that’s one of the things that keep people coming back, too.