Third Quarter Forecast 2012

Jul 10th, 2012

Make this year’s “summertime lull” a progressive time for your day spa.

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In the stock-investing world, summer’s mantra is “Invest it and forget it.” The idea is to simply put your money into some well-researched stocks and leave them alone until trees’ green leaves take on an amber hue. And typically, the slow, sweet tea-drinking doldrums of the third quarter bring little significant business movement—people are wrapped up in family vacations, barbeques and poolside lounging.

At this year’s midpoint, the U.S. economy is a mixed bag. The unemployment rate is still hovering just above 8% and interest rates remain at remarkable and historic lows. However, retail sales have been slowly—ever so slowly—inching upward. Kiplinger’s predicts an overall growth of 2.3% for the economy in 2012. Though this certainly isn’t the explosive growth we would like to see, things are at least trending in the right direction.

Two telling aspects of the economy during July, August and September are 1) gas prices, and 2) the upcoming presidential election. Not since January 2011 have prices at the pump dipped below $3 and, according to oil analysts, we’re not likely to see such a figure again any time soon. In fact, the summer months will probably bring even higher figures—we’ll likely top $4 per gallon. And, as for the election, now that candidates for the country’s top public office are solidified, aggressive campaigning will mount. The resulting flux in leadership created during such times typically restrains growth of the economy.

However, none of the above means you should ignore your day spa during this time. Many savvy spa professionals are taking advantage of this relatively slow season to buckle down on marketing and client retention efforts. They’re also trying out new trends and offerings that could help them stand out once temperatures drop and business picks up. Felicia Brown, business and marketing consultant with Spalutions! in Greensboro, North Carolina, even sees a potential silver lining for spa pros in this less-than-robust summer economy. “We’ll see an uptick in client numbers from those folks who are having shorter summer vacations, but still want to do something nice for themselves,” she predicts.

Since success in any quarter is built upon a solid strategy and game plan, DAYSPA consulted with industry experts to glean their top suggestions for making your third quarter a strong one.

Get to know your neighbors.

Since gas prices are going to be an issue during the third quarter (and probably beyond), it makes sense to target clients geographically. “Our philosophy,” says Allison Murphy, owner of Woodhouse Day Spa in Orlando, Florida, “is to keep our marketing close to home. We target guests living within a five-mile radius to the spa.” This strategy not only eliminates the burden of a long drive for clients, but it’s also less costly for you. You can easily spearhead an effective marketing campaign with well-placed signage, targeted inserts in the local paper and a presence at community events.

Brown suggests that spas work with other area businesses to market to potential clients collectively. “Consider ways to cross-promote services, or offer opportunities that help clients save time, such as a contest in which clients can win prizes based upon the number of participating stores on a block that they visit in a single day.” Another traffic-boosting idea is a “sidewalk sale,” in which businesses position staffed tables outside their doors—say on a busy Saturday—to educate passersby about their products and services.

Lisa Starr, a senior consultant with Wynne Business, advocates promotions that tie into your guests’ values and priorities. She suggests a campaign with a slogan like this: “Receive two services in the same day to reduce your carbon footprint, and we’ll put $10 toward the Clean Air Fund.” This helps clients feel they are doing something good while treating themselves. For more ideas on “micro-marketing,” become more involved with your local Chamber of Commerce; this may lead to valuable brainstorming sessions with fellow business owners.

Work on relationships with loyal clients.

Successful spa pros discovered long ago that it’s far more cost-effective to hold onto existing customers than to constantly try to lasso new ones. This quarter is prime time to renew your client retention efforts. “In the age of Groupon and Living Social,” Brown says, “customers are more willing to try new places and services than ever before. While this is inherently good for all of us, now more than ever, we must give our best to everyone who walks through our doors.”

Not only will top-notch service keep your clients coming back, but it will also encourage them to do your marketing for you. Positive word-of-mouth is the most affordable advertising available, and your best clients are also your best salespeople. They’ll tell friends and family about the incredible menu of services you provide and the outstanding attentiveness of your staff. So take a look at your treatment protocols: Are there ways your therapists could provide low-cost upgrades that could make your services better stand out in guests’ memories? Perhaps you could customize aromatherapy and soundtracks during massages, facials and pedicures, or offer a signature beverage or small treat to every guest who walks through your doors.

But first, find out what your guests truly think of your service. Murphy says one way to do this is via a focus group with randomly selected clients. Ask eight or more of them to join you one evening for a candid discussion about what your spa does well and what you might improve upon. In return, offer participants a $50 gift card. “Keep the evening fresh and exciting for guests, being mindful of how their time is precious in the summer months,” she advises. Limit this gathering to an hour, provide a glass of wine and some hors d’oeuvres, and remain open to what you can do differently at your facility. “This kind of information is more valuable than what you will spend on the evening,” Murphy assures.

Highlight wellness.

Many spas are already seeing appreciable numbers by shifting their marketing focus away from the pampering indulgence message, and instead emphasizing their wellness benefits. “The spas that will do the best this year are those that continue to add wellness-based programs,” Brown affirms. Murphy adds that marketing this aspect of the spa “focuses on the importance of having a third, safe place apart from work and home.”

In our challenging economy, families and individuals are monitoring their budgets more tightly than they have in decades. But they are also more proactive when it comes to preventive healthcare and achieving a balanced, low-stress lifestyle. Spas that successfully embrace this dual trend—healthier living and more careful discretionary spending—will find themselves riding the wave of forward progress rather than struggling to stay afloat.

Even if you’re already partnering with outside wellness providers such as gyms, yoga studios and life coaches, continue to explore health-related options during the third quarter. Could you host meditation or emotional support group meetings? Add energy healing services? Retail teas and supplements? Bring an exercise physiology expert on board? Focus on giving your clients reasons to seek your services and expertise more frequently and regularly.

Get experimental.

The third quarter is a great time to pilot new offerings. By trying them out now, you allow your staff to have them mastered by the time business picks up in the fall.
For example, this quarter Murphy is launching Young Woodhouse, a completely separate menu targeting guests aged six to 17. It’s a visionary move, too! “As the school year winds down and summer approaches, we can create a fun spa experience that provides an opportunity for moms, daughters and friends to bond,” she says.

Now is also a great time to think of providing clients with “spa-cations” (mini vacations that don’t require an overnight stay). “Stay-cations and spa-cations are definitely becoming more popular, but when doing them, it’s important to find creative, unique ways to engage your guests,” says Brown. Think about creating an escapist couples’ package with a day’s worth of services tailored to her and him, or an afternoon tea featuring elegant nail services that mothers can enjoy with their children. (Also check out “Meaning Well” on page 54 for out-of-the-box ideas for fostering fun summer wellness programs.)

The most important step you can take in the third quarter, however, is preparing for the crucial fourth quarter. “Planning themes and promotions for the holiday season should take priority,” Starr says. “Order bags and gift packaging, and decide on your retail inventory.” Be sure to purchase wisely though; Starr cautions that while you’ll always have a need for gift cardholders and retail bags, leftover holiday-specific items will just be a drain on your budget.

The third quarter is a time to stretch your comfort zone, too. Step back from the ”we’ve-always-done-it-this-way” mentality. Make this the summer that you truly focus on raising the bar for yourself, your staff and your clients. Because at the end of the quarter, that’s an investment you won’t regret pursuing.

Dr. Steven Austin Stovall is freelance writer and a management professor at Wilmington College in Wilmington, Ohio.

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