With the biggest job loss in five years recently announced, and the continuing stream of other bad economic news, it is clear that all small businesses need to prepare for a possible recession. While many spa and salon clients may be conservative in their spending, an economic downturn does not necessarily mean that all clients will suddenly disappear. Smart spas, however, can adjust their management practices to get down to the basics.
Changes to money and staff management are clearly top priorities. Cash flow and cost reductions must be managed closely to maintain the lowest overhead. If your business doesn't have a trusted financial adviser such as a bookkeeper or CPA, the money spent on their services today can save you from costly mistakes in the future.
Maintaining staff morale and keeping the lines of communications open is especially important. Spa directors need to squash rumors of layoffs or other negative gossip to ensure that employees are focused on providing a positive experience for clients. Spending more time on training during this time is a good strategy as staff is less likely to jump ship with the job market so competitive.
Knowing what to do about marketing expenses can be a tough decision during business slow downs. On one hand, there is a logical compulsion to advertise even more to bring in clients. On the other, the high cost of advertising could break the bank. Since I'm not a fan of print advertising anyways, you can probably guess that I would advise ...in most cases... against spending on advertising for the sake of awareness.
Here are four changes to consider in your spa marketing strategy during changing economic times:
- Change the Message. While your highest profit services such as hair color, facials and body treatments are commonly featured in marketing messages, a focus on health, quality and safety should take main stage now. Hair and nails require monthly upkeep, but are often subject to price wars during tighter times. A higher end spa or nail salon that provides sanitary manicures and pedicures needs to shout this from the roof tops. Your quality hair cuts are customized by experienced stylists that guarantee clients will look their best. Massage is still the number one spa service and appeals to men and women. It should be very clear in your marketing message that your spa offers massage to manage stress and aid a healthy lifestyle. Because you offer quality service, consider a satisfaction guarantee if you don't already have such a policy in place. A guarantee can make paying for your quality services easier for conservative spenders.
- Increase the Frequency. How often do you reach out to your client list? If you are doing it less than once a month, there is a risk that they will simply not think of you when they are ready for the services you provide. Whether it is a monthly email newsletter (my favorite), a thoughtful card, or a mailed postcard; each communication supports a memory of your business. Don't forget to use the phone either! Sometimes just picking of the phone to say hi can be the most cost effective way to market your business.
- Strategize Word of Mouth and Buzz. Also called guerrilla marketing
, word of mouth marketing is hands down the number one way that new clients find a new spa or salon. Your clients talk about you. Even people who aren't your clients...but maybe are in the neighborhood... talk about you. People who receive an unredeemed gift certificate talk about you. While logic may lead one to believe that you don't have any control of what they say, the marketing reality is that businesses have an enormous amount of influence on their buzz. Jay Conrad Levinson
- Reset expectations. It is easy to focus on marketing expenses as a long-term investment. This is because high dollar branding activities such as advertising in print or radio are exactly that...an investment. However, if your top priority is filling up your book fast, these long term investments are not your best bet. Reset your expectations and focus only on the short term impact. How many new clients will that referral bonus for your VIP clients bring in? Will a joint marketing event at nearby boutique or complementary business get some TV coverage? How many clients can you attract to slower days in the week by offering more value (e.g., complementary upgrades or no-cost add-ons)?
The positive news on a downturn in any economic cycle is that there are always opportunities for those businesses that are prepared to take advantage of them. Perhaps this means the option to purchase a competitor, or renegotiate a lower lease or find a better retail location. Having an optimistic attitude during what can be a stressful time can make the difference between just surviving and thriving in a recession.
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