FG Innovation Management Ltd

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Filling White Space – Do We Discount Prices or Add Value

As we visit many spa businesses the big dilemma is whether to discount treatments by creating daily, or weekly 'specials' or add value to the services offered.

Giving something ‘FREE’ does that turn potential customers into paying guests or were they going to book anyway?

First things first, discounting a facial or massage it a sure way of pouring money down the drain. Our clients have most probably experienced a massage or facial before and therefore this will be their ‘go to’ option when making a booking with you. However when was the last time you run a report to analyse what your top bottom three treatments were and why they weren’t selling?

Is it because:

- The treatment is not enjoyable for the client?

- The therapist finds it a messy or difficult treatment to do?

- People don’t understand what the treatment is?

- No one offers it to the guest when booking?

If your analysis is that the treatment is great, enjoyable and profitable then there is no reason why you shouldn’t be pushing it. Usually receptionists forget to offer the treatment because no one asks for it or maybe they don’t know how to describe it to sound tempting enough for the client to book.

Possibly we need to look at how we are promoting the treatment. When was the last time the therapists or reception team experiences this treatment?

Now rather than slapping 25% discount on the treatment think about this – why would I ever purchase this treatment at full prices if I only ever paid a discounted price for it? The best way to introduce these treatments in a promotion is to introduce the treatment experience in a promotion. As a rule of thumb we don’t offer a 30 minute facial or massage on any treatment menus. Now that’s not to say we turn guests away if they ask for these treatments but we don’t make it a visual offering on spa menus. It causes therapists columns to become easily over run with back to back 30 minute treatments causing burn out. However if you combine them as part of the monthly or weekly promotion; you are controlling how your therapists days are being filled, while creating professional stock rotation and introducing low selling treatments to potential full paying guests at a later stage.

This happened to a spa in County Clare in Ireland when they re-introduced the rasual treatment, this room which seated four people (a highly profitable treatment requiring little therapist time) and had not been sold in nearly one year. That is a lot of money and space being wasted with no one identifying there was an issue. Once we incorporate an introduction as part of the monthly promotion the treatment started to have requests as a stand-alone treatment because guests loved the introductory experience so much.

We often make assumptions about what we think our guests do and don’t want but we never give them the options.

We need to be the educators. The spa brochure is like a dictionary to them with words and sentences that are so complex they don’t know what they are reading quite often. It is our duty as spa professionals to educate our clients.

When we constantly discount prices we are devaluing the service or product, we need to add value to a service rather than take away. Your customer wants value for money not the cheapest deal because even with the cheapest deal they want quality.

A new salon recently opened in town and the prices were rock bottom we didn't know how they could afford to run at such low prices. We asked people’s opinions on the new opening and their first question was 'yeah it's cheap but are they any good?' So you can be the cheapest business in town running at a near loss to get bums on seats but your customer will not return unless you have a good quality product and service.

People have money to spend these days but they are choosier as to what they spend their money on.

So the next time you look at discounts and dramatically reduce your spend per hour rather look at added value for the customer without making a huge dent in your bottom line.

Why not book a 1 day business analysis in your spa?

One Day Business Analysis Program is purposefully designed to focus your mind on understanding the needs of your business as a whole, its’ strategic direction and identifying initiatives will allow your business to meet those strategic goals.

The business analysis day will include a mystery guest visit with full report and a meeting with key personnel to discuss any challenges or improvements they feel are inhibiting the business to grow further. Recommendations will be discussed to further boost revenue and reduce costs whilst perfecting the customer experience.

Examples of area of discussion and analysis:

· Customer experience

· Up-selling, re-booking services

· Increasing customer demographics

· Retail sales

· Retail shop area

· Traditional and digital marketing

Contact us today for more details ask@innovationmanagementltd.com