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Regaining Your Dream

By Rhana Pytell April 2008 issue of Skin Inc. magazine

What attracted you to the spa business? Was it the industry’s dedication to beauty, the possibility of transforming clients, or perhaps the desire to create an environment of peace and relaxation?
       Most spa owners, directors and estheticians enter the spa profession with the desire to live a better life and help clients do the same, while becoming a voice supporting a conscious approach to wellness.
       In reality, however, many have seen their aspirations marginalized by the demands of a business that leaves them burdened by financial management, inventory control, regulatory compliance, facilities management, complex equipment maintenance, hiring, training and repeatedly solving the same problems. They are left wondering, “What happened to my dream?”

Bringing back your dream
       If you’ve felt burdened by the operational side of spa management, the road back to your dream is not as long as you might think. The key is to establish operational systems and share them with your entire team. As you design and introduce these methods, you’ll notice a reduction in repetitive problem solving and manager reliance, as well as an increase in the ability to consistently deliver a higher standard of service.

       What are systems? Systems are sets of operations or procedures that are supported by materials, such as work sheets or checklists that you and your team members can routinely use to produce a consistent, desirable outcome. The most successful spas have systems for all aspects of spa management, from treatment room setups, compensating service providers and rewarding referral clients, to inventory management. They are important because they provide a new level of control throughout operations, and free up your time to focus on the strategic and revenue-generating areas of your business, such as retaining your top clients.
       In the August 2007 issue of Skin Inc. magazine, author Frederic Holzberger noted that day spas need to maintain a 70% client retention rate in order to succeed, compared to much lower numbers for destination spas, which can rely on a continuous flow of guests arriving daily. To achieve that rate and meet financial goals, it is important to plan and work differently. The International SPA Association (ISPA) industry report documents nearly a 20% decrease in revenues to day spas from 2005 to 2006.

Making systems work for you
       Take a moment to consider your business and identify its weaker points. In order to develop systems for your spa, select an area on which to focus, such as spa operations, marketing, leadership and management, or finance. Most owners must attend to all of these areas, but few perform equally well across the board.
       In addition, when you engage in this process, take it slowly. Your goal is not to make the weakest area the strongest; it is to address the deficiency so that it is no longer a liability to your organization. Keep it simple and meet the minimum requirements. Then, as you experience success, continue updating and refining the area.
       Once you’ve identified an aspect of your business to work on, consider your ideal outcome. This will be your goal. Next, carefully review the changes, processes, accomplishments and methods that will deliver this result. Also, be sure to keep all of your team members engaged in the process so that they can share in the creation, implementation and reward of your dream spa and its new systems.

       Example No. 1: retail operations. Although all areas of your business cannot be addressed in one article, following are a few examples about how to set up systems to get you started.
       It’s common for spa owners to neglect the retail side of their business; when short on time, they attend to clients first. However, some spas excel in retail operations and use their proficiency in this area to heighten profitability.
       For example, it is important to know how to utilize inventory controls to minimize shrinkage and loss, or the amount of dead stock that accumulates on the shelves. In addition, you must create ordering processes that stay in sync with clients’ needs.
       In the retail area of your business, it makes sense to focus on sales. Other systems that are necessary for a profitable retail business include the following.

  • Weekly inventory counts and shrinkage records for your key product lines
  • Instructions about how to record shrinkage and policies regarding what to do when inventory is disappearing
  • Mark-down systems to continually eliminate dead stock
  • Ordering systems that combine historical sales data and sell-through goals
  • A method for introducing new products and their benefits to team members and clients  

       By implementing these strategies, you will dramatically improve retail profits. In addition, when documenting these systems, you will simultaneously buffer your company from the impact of employee turnover. With clearly documented procedures and well-defined accountabilities that are understandable to all team members, you can train new hires and watch them become productive within days or even hours.

       Example No. 2: leadership and management. In many spas, owners worry constantly about employee turnover and its potential impact on the business. It is important to realize that no matter how much you’ve invested in making your facility a wonderful place to work, turnover is inevitable—people move, go back to school, have children and pursue career changes. It is important to minimize its impact by strengthening hiring and training practices.
       In order to enhance training and orientation methods, create a CD for each new team member as a welcome to your organization. It could include:

  • A PowerPoint presentation that states the company’s mission, along with a few marketing materials that reflect the spa’s intended look and feel, client testimonials and management philosophy.
  • An organizational chart that lists every position in the company, even if some are currently vacant.
  • A job description outline for each position.
  • A complete job description for the new employee’s position that includes the checklists, policies, work plans and forms that correlate to each item on the description. For instance, a concierge or support team member may have “Opening the Spa” as a line item. Checklists used when opening the spa each day would be included, as well as any problem-solving information that is necessary with these procedures.
  • A training checklist that corresponds to this job description.
  • Policies regarding reviews and compensation.
  • Compensation guidelines for the new employee’s position, along with a potential career path.  

       If you are new at this, ask your team members what information they would have liked to know when they began working for your organization. Involving your staff in systems documentation can make the process much less daunting for everybody. Ask them to document their activities so that when they leave—and they eventually will—you’re not left reinventing the wheel.  

Systems work: a personal approach
       I recently resolved an issue that, although minor, threatened to become a recurring problem that could drain my time and energy from other areas of the business.
       About a week ago, I came across a couple of team members who were communicating emotionally and negatively with one another. It is important to remember that in order to deliver an exceptional client experience, everyone must work together in harmony. These individuals lost sight of this larger goal.
       If this continued to occur, I would be dealing with their negative impact repeatedly. I conducted a little research, wrote “Guidelines for Interpersonal Communications,” and put this into a company-wide e-mail. I also added the file to each of the employee job descriptions under the heading “Teamwork” and within our training checklists to ensure that each new employee understood the expectations regarding the clarity and professionalism of their communications.
        One of the guidelines I passed on originated with leadership guru Stephen R. Covey: Begin with the end in mind. In our case, I stressed that one of the necessary results of interpersonal communication is mutual respect. When my employees read this, they had an “a-ha” moment and realized that their tone and word choice would be quite different if they consciously conversed with this outcome in mind.

It works for clients, too
       Once you’ve begun to establish spa management systems in the areas of operation, you’ll soon notice that you have more time to devote to other projects. When this happens, it is important to turn your attention back to clients in order to achieve the target 70% client retention rate that almost guarantees business success.
      To boost retention of your most profitable clients, create a client retention or client loyalty-building system that could include:

  • A list of policies and expectations regarding your staff’s level of client service and professionalism
  • Training in rapport-building skills
  • Staff rewards for client retention
  • An acknowledgement and referral program
  • A VIP retail pricing program


       Whichever processes you select, be sure to document the employees responsible for executing these processes; the accountabilities of each position in the area of client loyalty building; and measures to help you to evaluate each team member’s performance within a certain position.

A wealth of resources 
     If you get stuck in the process of designing and developing your systems, you can turn to a wealth of resources. The Society of Human Resource Management is excellent for helping you to develop ideas and processes for training and personnel management. Alternately, you could turn to ISPA and its retail management tools to gain control over your inventory management.
       In addition, there are new technologies and tools being developed every year, ranging from software that helps you focus your marketing budget to Web-based management systems that help you quickly build, update and share operational systems with your staff.
     Tools such as these are becoming increasingly affordable and available and, with a small investment of time on your part, could help you disentangle yourself from the most burdensome of operations to achieve your profit goals, and live the dream of wellness and balance that you so enthusiastically provide for others.

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