Can This Business Be Saved? – ‘Service, please!’

Q: I own a small spa where we specialize in facials, massage, waxing and assorted treatments. Lately we’ve lost customers, and I’m having trouble attracting new ones because our competitors practically give away the same services through Groupon and LivingSocial promotions. I can’t compete with those rock-bottom rates, yet if I don’t slash prices or do something dramatically different, I’ll lose the only business I’ve known for the last 12 years. How can I save this business, or is it time to give up?  

A: You’re not alone: Groupon and dozens of daily deals sites are forcing businesses in nearly every category to face price wars.

There are proven ways to compete in this discount-crazy world without destroying your business. While you may lose the battle for some customers who shop solely based on price, staying true to your brand and recommitting to exceptional client relations means you need not lose the war.

I asked two women in your industry—spa owners Lora Condon in New Jersey and Mindy Black in Florida—to weigh in on this challenge by sharing some of the ways they’ve successfully combated deep discounting among their respective competitors. They’ve emerged strong and you can, too.

“When it comes to their looks, people shop on trust, not price,” says Black, who owns Inner Beauty Skin Care in Sanford, Fla. “Customers don’t just bounce around from place to place to save a few dollars when it comes to their hair and skin. This is personal, which means relationships and trust will trump price.”

One way to rebuild client connections is to host a party, says Condon, owner of Magic Hands Skin & Body in Westfield, N.J.

“Invite current clients and ask them to bring a friend,” Condon says. “Have food, drinks, raffles and entertainment. Include a charity to help spread the word. Get complementary local businesses to join in, especially if they’ll invite their clients as well.”

Retraining staff in this discount environment is another must, the two women say. Your entire staff—from the front desk to technicians—must to be onboard and understand why doing business the same old way won’t cut it anymore. They should accept that customer service might not count as much in some industries where buyers can help themselves, but it’s Job One in the spa world, especially as you fight to keep the business alive.

Black says that a common mistake many spas make is having technicians perform procedures without speaking one-on-one with clients about treatment plans and follow-up visits.

“That leaves it up to a receptionist to close the sale, which is a huge letdown and disservice for the client and the spa,” Black says. “To leave a spa with a bag full of delicious products without direction, explanation and education will leave a client frustrated and neglected—a perfect reason for them to start spa hopping.”

Handwritten thank-you cards go a long way in the beauty industry. “If you have a strong bond with your customers, you will always win,” Black says.

This is also the perfect time to take a close look at your salon’s physical space and brand attributes. “Really think about what makes your business different from every other spa,” Condon says. “Assume everyone is good at what they do and then think, Why would someone come to me instead of the salon down the street?”

Walmart can get away with a cold, cavernous space because it’s in keeping with its bargain-basement pricing. But a retailer such as Neiman Marcus knows that to attract well-heeled customers, salespeople must be ultra-accommodating, the lighting soft and forgiving, the setting professional yet comfy. If you sense that your website, signage, furniture and treatment rooms could use some freshening up to mirror the prices you want to command, know that your clients sense it, too.

“Dirty is the No. 1 reason clients leave,” Condon says. Make sure your space is modern and classy—so inviting and comfortable that clients are in no rush to leave.

Condon also recommends offering a loyalty program that gives clients a reason to return. You can do this through exclusive Facebook specials for “liking” your page and by selling packages that offer discounts for prepaid multiple treatments. Add products or services that can’t be done at home, such as a custom-blended foundation.

Finally, if you can’t beat them, join them. Try Groupon or others, but do it strategically: not just to get someone in the door, but to keep them.

Condon ran a LivingSocial special on lash extensions for first-time applications. That’s a service that requires fill-ins twice a month, so she has been able to build a solid return client base. Had she offered a deal on a one-time service, such as a facial or massage, the discounted deal wouldn’t have done anything to build her business over time. When you choose wisely, discounts can—and do—serve a valuable role in building your clientele.

Bottom line: Don’t pack up shop. Revisit your strategies and recommit to educating people on the value of sticking with you. This is as true for the spa world as it is for most service businesses.


Tory Johnson is CEO and founder of Spark & Hustle, a weekly contributor on ABC's Good Morning America and a contributing editor of SUCCESS magazine.

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