Spa Advisors

Gift cards and gift certificates-How to run a successful program

Spa Advisors — Mon, 09 Nov 2015 17:02:38 +0000

Gift Cards & Gift Certificates-

The Do’s and how to’s of a successful program

By Spa Advisors, Inc. www.spaadvisors.com

Overview

In 2014, the gift card business in the United States surpassed $124 billion dollars! What is even more astonishing is the fact that ten to fifteen percent of that total will go unredeemed. Why should your salon or spa not be a beneficiary of this massive business opportunity?

No matter where you go, whether your local grocer, pharmacy or even office supply store, gift cards are front and center, available for purchase at any time, from a number of retailers. You will find their store brand gift cards along with a plethora of cards from fast food establishments to Nordstrom and Bass Pro to Toys R Us. Why? There are substantial profits made by both the retailer offering the cards for sale and the retailer issuing the card. Those cards are convenient for shoppers, an easy gift for hard-to-buy-for individuals and normally usually appreciated by the recipient. They have become a staple in most retailers and many dedicate high traffic end caps to them.

If you have not already, start today to prepare for this upcoming surge. Yes, spas and salons need to class those retailers as competition. Why? The answer is simple: because they are potentially taking your gift card and gift certificate businesses away when you do not make your statement as pervasive as theirs. Over the next week, make the sale of gift cards or gift certificates a top priority. This takes pre-planning, marketing, strategic marketing, dedicated space within your facility and a sales goal by day.

This article is short and only touches on each topic. For more in-depth discussion, call us.

Why are they important?

Traditionally for most salons, spas and retailers, certain times of the year are slower than other times. Those months include the summer months in areas where summers are extremely hot, the month after students return to school, usually August and September, and January, when most people are recovering from holiday spending. The elation and highs brought on by higher-than-normal holiday spending evaporate with a seemingly instantaneous drop in revenues usually beginning right after New Year’s Day. The modest surge in momentum brought by Valentine’s Day sales cannot counter pre-holiday selling. Gift card sales help during those times! Focus on the sale of gift cards before the holidays and the redemption of gift cards after!

I have heard two schools of thought on gift card sales over the years. The first: “We don’t care if the gift cards get redeemed. We have their money.” Many problems with this train of thought which we would discuss later. The other, “Let’s get those gift certificate recipients into our facility now! They will likely spend additional money, perhaps purchase product and if we do everything right, we have a new customer!” This is what I feel is the correct attitude toward gift card sales and redemption.

Gift cards and gift certificates are a pre-payment of services or products. The sales of these cards or certificates allow your customers the ability to give the gift of beauty to a spouse, relative, teacher, coach, friend, or significant other. Normally salons create a minimum purchase requirement for the gift card (we suggest $25 as a minimum, perhaps $50 in higher end facilities).

So why are they important?

Their receipt from the gift-giver markets your business to potential new clients
Sales of gift cards bring clients into the facility during slower times, post-holiday when business is not as robust
Sales of cards can assist with cash flow on the short term
When redeemed, guests normally spend over and above the price of the gift card. This can range from as low as five cents on every dollar to as much as fifty cents on every dollar. This means your $100 gift card sale likely represents $105 to $150 in sales
A staff busy with appointments generated from gift card revenues are happier and less likely complain
They are a low-cost sales item. Requirements differ by facility; however, normally the sale of a gift card is a nominal expenditure
Assists in the branding process of your facility
Gift cards are a silent marketing tool, understood by all, and are ageless and timeless gifts

How can you compete effectively? Promotional ideas

Now that you understand you are competing for gift card revenues against every retailer selling them, you can look at your local area competitors to see what they are doing to drive those sales. Grocery stores, a large seller of gift cards, normally offer incentives in the form of bonus points during their key selling times. Retailers such as Sam’s and Costco offer gift cards at reduced prices. Gift card purchasers often expect an incentive to purchase. Here are a few ideas:

Offer incentives for purchases over $100. Do not discount and sell for a lower price, such as “A $100 gift card for $80.” Instead, offer a separate $10 or $20 certificate, with appropriate disclaimers, in addition to the gift card. You can limit their expiration and should have an expiration date. We will explain below.
Pre-print certificates/coupons valued at $10 and $20. (See above) These are not gift cards and do not have monetary value like a gift card. Make sure you place disclaimers on them as follows: These coupons do not have monetary value and not redeemable for cash. This can be used towards services or products valued at $20 or $40 respectively. This coupon expires on______. __________reserves the right to cancel or suspend this program at any time.

Check with your accountant and/or legal counsel for appropriate wording of these items.

Dedicate one-half of your advertising budget to the sales of gift cards.
Plan your social media attack! Plan your gift card sales by day and plan your social media marketing by day too. Determine when you will post, when you will email and when you will tweet, by day! Make sure your database is up to date.
Use Social Media to educate your clients about your gift cards. Place a promotional box on your home page.
Sell online. Make sure you are set up to sell gift certificates or gift cards on-line. If not, at least have a place where a guest can send an email to place an order.
Denominations sell best. Suggest $50, $75, $100, $150, $250, $500 and $750 card values
Understand that you need to make it easy! Let them call their orders in and pick them up later. Allow them to order on-line or e-mail. Have a beautiful presentation available or, offer giftwrap for them. Be ready to ship them if needed.
Be clever in your marketing in-house! For example, “Would my wife rather have a family dinner with an Olive Garden gift card or, a massage at ______________?” Easy answer!
If creating packages, offer the best selling services in your packages. If you developed your menu properly, you have a basic service in each category, with a lower cost of goods, driving the predominance of sales in that category. Do not create new services just for gift certificates. Create packages using these services. An example: Signature Deep Cleansing Facial-$85, Swedish massage $85, Spa Manicure $25, Spa Pedicure $55. Total Regular price for these services purchased individually is $250. It is perfectly acceptable to offer this package at no discount. If you feel that incentive is needed, perhaps offer a light snack and a $20 certificate to be used towards products or additional services (the one mentioned above), bringing the value of the package to $295, for only $250.
Create three packages: use a good, better, best philosophy. Fit them into price points, acceptable for your demographic.

The reason I recommend printing certificates or coupons to use in addition to the gift cards is simple: These do not fall under Unclaimed Property laws and if not redeemed, they have no value. If not used by a certain date, they can expire, unlike gift cards in several states that by law have no expiration. You must check your state for specifics.

How to plan for a strong holiday selling period

If you want to have a successful gift certificate selling period, you must plan for it. Your facility must look like you are in the gift card business. You have to start today to assure you are ready by Thanksgiving. Here are some ways to accomplish this:

Set your sales goals. To start, your goals should equal five percent of your total service and retail sales last year. This means, if your salon’s revenue was $250,000 last year, your goal should be $12,500 in gift card sales. Most successful operators sell in the range of ten to fifteen percent of total sales.
Replenish your stock. Order cards immediately. It is okay to have one basic card and one seasonal card. They are not expensive. Better to have too many. They should work with your electronic POS system. If you do not have a supplier, call your software provider and they will recommend one. We have listed a few below.
Replenish bags, tissue paper, and boxes. Everyone has a different presentation for gift cards. Some simply place them in an envelope, while others place them in a beautiful box, with a card insert describing the services, then into a bag with tissue. Whatever you do, make sure it is special.
Make the process time efficient. If you have the ability to sell electronic cards, do it. Paper gift certificates are labor intensive to make out for each guest, easily lost and more expensive.
Target men! Make sure you have focused at least of your marketing on men. They tend to buy closer to the holiday. Ease of shopping is very important to them. Be ready to make a suggestion based on their budget and offer complimentary gift wrapping services or packaging for their card purchases.
Create a contest within the salon or spa.
Make recommending gift cards part of the culture during the holidays.
Make it easy. Have collateral materials created to make it easy for your receptionist to sell cards over the telephone or to guests.
Create a gift card displays throughout your facility. It needs to look like you are in the business to sell gift cards! This means that every area in your salon frequented by guests should suggest a gift card. The cash wrap, the styling area, every treatment room, the shampoo area, the relaxation room, the waiting room and even the restroom.

Setting Goals

Create a spreadsheet to track and recap goals each day. Understand the sales become stronger and stronger every day with the strongest sales happening on December 23! You will find a spreadsheet to help you track.

Launch in a big way. Make this event a big deal within the facility. Make sure they feel part of the planning and the event.

Track sales by staff member. Let them know how they are trending against their goals. Congratulate their successes. Inform your staff daily of your achievements. Make it fun.

Make sure they understand WHY the sale of gift cards is such a focus. Being busy after the holiday is something they may not be thinking about now.

Look for ways to improve. Your initial plan may need modification. Figure out what is working, what is not and adjust.

Attitude is everything!

Make sure everyone understands the importance of selling gift cards and is onboard. Do not let one negative individual ruin your chances for success.

Place importance on the recommendation of a gift card. Everyone has a hard-to-buy-for friend, spouse or even a teacher or coach whose hobbies and preferences are unknown. Offering in denominations of $25 or more make them affordable for most.

You may choose during the holiday time to decrease the minimum purchase to $15, making it affordable for teacher and coach gifts.

Know that the momentum builds everyday as you approach Christmas. Women traditionally purchase earlier, men later.

Focus 365-Not just the 90 days between thanksgiving and valentines day!

Focusing your attention now on holiday gift giving is key; however, you should keep this going throughout the year! Birthdays, anniversaries, graduations, baby showers, bridal showers, and thank you gifts can happen throughout the year. Make sure you “plant the seed” throughout your facility, year round.

Keep a gift card section as a small part of your retail space. Change the way it looks by using different display bags and signing.

Gift Certificate Redemption

We talked a bit about the right and wrong attitudes to have relating to gift cards. Redeeming gift cards gives you an opportunity to sell those recipients additional services, products for perhaps another gift card for someone else. Here are a few suggestions:

“It’s time to redeem those holiday gifts!” is a great way to engage guests via social media. Remind them via a Twitter, Snapchat, Instagram, and Facebook to come in to relax, refresh, and unwind after that busy holiday season!

Ask technicians to continue their recommendations throughout the year.

When a guest calls in for an appointment, they may mention they are redeeming a gift card. Ask if the recipient has been into your facility before. Ask if they have any questions. Make them feel welcome.

According to a source cited below, “60% of gift card recipients spent and additional 38% over and above the value of the card. What does this mean for you? Yes, additional sales! Recommend products! Make sure your facility is well maintained as those redeeming gift cards are ready to buy!

See how effective your redemptions have been. When a gift card is redeemed, track how much that guest spent overall. You can see for yourself how important this strategy can.

Remember, you must check Unclaimed Property laws and laws relating to gift cards by State. Do no assume that money is yours if the recipient chooses not to redeem their cards or certificates.

Gift Card Merchandising

MAKE A STATEMENT. MAKE IT APPARENT. MAKE IT APPEAL TO MALES AND FEMALES.

Identify five locations within your facility. Make a gift card statement in each location, whether a poster, a framed sign or, a display with bags and tissue, make sure it is impactful.

Show your gift card presentation to your guests.

This presentation is from a company called Nashville Wraps. www.nashvillewraps.com. If you do not have custom bags, tissue and boxes, you may choose to use something like this, utilizing gold or colored tissue to accent and pull your salon or spa colors into the equation.

If your focus is natural, organic and renewables, you may choose to purchase reusable bags, such as those pictured above with the gift card inserted along with menu or card with the web address, allowing the guest the ability to peruse the menu online.

Track and plan for next year

If this is your first year really focusing on gift card sales, recap your successes and failures. Pull this out next year to assure you are better prepared. Ask the following:

What worked?
What did not?
Was the process easy?
How could it be better?
Could I have sold more?
Did my staff understand the importance of gift card sales?
What are some other promotions that could compliment this effort?

unclaimed property laws

By now, every business owner must understand the fact that revenues generated from the sales of gift cards are Unclaimed Property in most States. It is imperative for every business owner to understand what this means and what your long-term liabilities may be. Many states do not allow gift cards to expire while others range in duration from two years to five years or more. Once they expire, there is a process by outlined by each state. Check with your Accountant or one of the numerous online services for more information.

These laws protect the gift card owner from unfair business practices. Statistically, you could end up with fifteen to twenty percent of your gift card sales going unredeemed.

References

http://www.prnewswire.com/news-releases/2014-gift-card-sales-to-top-124-billion-but-growth-slowing-300007306.html

http://www.marketwatch.com/story/750-million-in-gift-cards-will-go-unused-in-2014-2014-11-29

https://www.cebglobal.com/exbd/financial-services/tower-group/gift-cards/index.page%3F

There are many gift card suppliers. We use Vanguard ID. www.vanguardid.com. Gabi Terrell 800-323-7432 or gabi@vanguardid.com

Spa Advisors, Inc.

480-460-7727

The post Gift cards and gift certificates-How to run a successful program appeared first on Spa Advisors.

SPA HOLIDAY GIFT CARD PROMOTIONAL PLANNING

Spa Advisors — Thu, 05 Nov 2015 21:27:12 +0000

Spa Holiday Gift Card Promotional Planning

Gift Cards & Gift Certificates-The Do’s and how to’s of a successful program

www.spaadvisors.com

Overview

This article is short and only touches on each topic. For more in-depth discussion, call us. This article will help you run a highly effective gift card or gift certificate program in your salon or spa.

Why are gift cards important?

So why are they important?

Their receipt from the gift-giver markets your business to potential new clients
Sales of gift cards bring clients into the facility during slower times, post-holiday when business is not as robust
Sales of cards can assist with cash flow on the short term
When redeemed, guests normally spend over and above the price of the gift card. This can range from as low as five cents on every dollar to as much as fifty cents on every dollar. This means your $100 gift card sale likely represents $105 to $150 in sales
A staff busy with appointments generated from gift card revenues are happier and less likely complain
They are a low-cost sales item. Requirements differ by facility; however, normally the sale of a gift card is a nominal expenditure
Assists in the branding process of your facility
Gift cards are a silent marketing tool, understood by all, and are ageless and timeless gifts

How can you compete effectively? Promotional ideas for gift card sales

Offer incentives for purchases over $100. Do not discount and sell for a lower price, such as “A $100 gift card for $80.” Instead, offer a separate $10 or $20 certificate, with appropriate disclaimers, in addition to the gift card. You can limit their expiration and should have an expiration date. We will explain below.
Pre-print certificates/coupons valued at $10 and $20. (See above) These are not gift cards and do not have monetary value like a gift card. Make sure you place disclaimers on them as follows: These coupons do not have monetary value and not redeemable for cash. This can be used towards services or products valued at $20 or $40 respectively. This coupon expires on______. __________reserves the right to cancel or suspend this program at any time.

Check with your accountant and/or legal counsel for appropriate wording of these items.

Dedicate one-half of your advertising budget to the sales of gift cards.
Plan your social media attack! Plan your gift card sales by day and plan your social media marketing by day too. Determine when you will post, when you will email and when you will tweet, by day! Make sure your database is up to date.
Use Social Media to educate your clients about your gift cards. Place a promotional box on your home page.
Sell online. Make sure you are set up to sell gift certificates or gift cards on-line. If not, at least have a place where a guest can send an email to place an order.
Denominations sell best. Suggest $50, $75, $100, $150, $250, $500 and $750 card values
Understand that you need to make it easy! Let them call their orders in and pick them up later. Allow them to order on-line or e-mail. Have a beautiful presentation available or, offer giftwrap for them. Be ready to ship them if needed.
Be clever in your marketing in-house! For example, “Would my wife rather have a family dinner with an Olive Garden gift card or, a massage at ______________?” Easy answer!
If creating packages, offer the best selling services in your packages. If you developed your menu properly, you have a basic service in each category, with a lower cost of goods, driving the predominance of sales in that category. Do not create new services just for gift certificates. Create packages using these services. An example: Signature Deep Cleansing Facial-$85, Swedish massage $85, Spa Manicure $25, Spa Pedicure $55. Total Regular price for these services purchased individually is $250. It is perfectly acceptable to offer this package at no discount. If you feel that incentive is needed, perhaps offer a light snack and a $20 certificate to be used towards products or additional services (the one mentioned above), bringing the value of the package to $295, for only $250.
Create three packages: use a good, better, best philosophy. Fit them into price points, acceptable for your demographic.

How to plan for a strong holiday gift card selling period

Set your sales goals. To start, your goals should equal five percent of your total service and retail sales last year. This means, if your salon’s revenue was $250,000 last year, your goal should be $12,500 in gift card sales. Most successful operators sell in the range of ten to fifteen percent of total sales.
Replenish your stock. Order cards immediately. It is okay to have one basic card and one seasonal card. They are not expensive. Better to have too many. They should work with your electronic POS system. If you do not have a supplier, call your software provider and they will recommend one. We have listed a few below.
Replenish bags, tissue paper, and boxes. Everyone has a different presentation for gift cards. Some simply place them in an envelope, while others place them in a beautiful box, with a card insert describing the services, then into a bag with tissue. Whatever you do, make sure it is special.
Make the process time efficient. If you have the ability to sell electronic cards, do it. Paper gift certificates are labor intensive to make out for each guest, easily lost and more expensive.
Target men! Make sure you have focused at least of your marketing on men. They tend to buy closer to the holiday. Ease of shopping is very important to them. Be ready to make a suggestion based on their budget and offer complimentary gift wrapping services or packaging for their card purchases.
Create a contest within the salon or spa.
Make recommending gift cards part of the culture during the holidays.
Make it easy. Have collateral materials created to make it easy for your receptionist to sell cards over the telephone or to guests.
Create a gift card displays throughout your facility. It needs to look like you are in the business to sell gift cards! This means that every area in your salon frequented by guests should suggest a gift card. The cash wrap, the styling area, every treatment room, the shampoo area, the relaxation room, the waiting room and even the restroom.

Setting Daily Goals for Gift Card Sales

Launch in a big way. Make this event a big deal within the facility. Make sure they feel part of the planning and the event.

Track sales by staff member. Let them know how they are trending against their goals. Congratulate their successes. Inform your staff daily of your achievements. Make it fun.

Make sure they understand WHY the sale of gift cards is such a focus. Being busy after the holiday is something they may not be thinking about now.

Look for ways to improve. Your initial plan may need modification. Figure out what is working, what is not and adjust.

Attitude is everything! Love selling Gift Cards!

Make sure everyone understands the importance of selling gift cards and is onboard. Do not let one negative individual ruin your chances for success.

You may choose during the holiday time to decrease the minimum purchase to $15, making it affordable for teacher and coach gifts.

Know that the momentum builds everyday as you approach Christmas. Women traditionally purchase earlier, men later.

Focus 365 on Gift Card Sales-Not just the 90 days between Thanksgiving and Valentines day!

Keep a gift card section as a small part of your retail space. Change the way it looks by using different display bags and signing.

Gift Card and Certificate Redemption

Ask technicians to continue their recommendations throughout the year.

See how effective your redemptions have been. When a gift card is redeemed, track how much that guest spent overall. You can see for yourself how important this strategy can.

Remember, you must check Unclaimed Property laws and laws relating to gift cards by State. Do no assume that money is yours if the recipient chooses not to redeem their cards or certificates.

Gift Card Merchandising

MAKE A STATEMENT. MAKE IT APPARENT. MAKE IT APPEAL TO MALES AND FEMALES.

Identify five locations within your facility. Make a gift card statement in each location, whether a poster, a framed sign or, a display with bags and tissue, make sure it is impactful.

Show your gift card presentation to your guests.

Track and plan for next year

If this is your first year really focusing on gift card sales, recap your successes and failures. Pull this out next year to assure you are better prepared. Ask the following:

What worked?
What did not?
Was the process easy?
How could it be better?
Could I have sold more?
Did my staff understand the importance of gift card sales?
What are some other promotions that could compliment this effort?

Unclaimed Property Laws

These laws protect the gift card owner from unfair business practices. Statistically, you could end up with fifteen to twenty percent of your gift card sales going unredeemed.

References

http://www.prnewswire.com/news-releases/2014-gift-card-sales-to-top-124-billion-but-growth-slowing-300007306.html

http://www.marketwatch.com/story/750-million-in-gift-cards-will-go-unused-in-2014-2014-11-29

https://www.cebglobal.com/exbd/financial-services/tower-group/gift-cards/index.page%3F

There are many gift card suppliers. We use Vanguard ID. www.vanguardid.com. Gabi Terrell 800-323-7432 or gabi@vanguardid.com

Spa Advisors, Inc.

480-460-7727

www.spaadvisors.com

The post SPA HOLIDAY GIFT CARD PROMOTIONAL PLANNING appeared first on Spa Advisors.

Why is a business plan an important first step in salon or spa development?

Spa Advisors — Wed, 12 Aug 2015 15:48:27 +0000

An entrepreneur by definition is “a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.” The raw definition does not describe the desire to be successful in their chosen market, nor does it touch on the amount of work and research needed to be successful in any industry. According to Entrepreneur Magazine, September 9, 2014, there are a number of reasons for businesses within the beauty industry to fail. Here is an excerpt from the article:

There are many reasons for these failures: outside market conditions (such as new competition or unexpected increases in the cost of doing business), financing problems, tax-related issues, poor planning, mismanagement, and a host of other problems.

The SBA Online Women’s Business Center offers these additional common causes of failure:

Inadequate cash reserves.You need at least a six-month cash reserve as a cushion to carry you through until you start making money.
Failure to clearly define and understandyour market, your customers, and your customers’ buying habits.
Failure to price your products or services correctly.The SBA says you can be the cheapest or the best, but if you try to be both, you will fail.
Failure to anticipate cash flow adequately.Some suppliers require immediate payment when dealing with new businesses, which can quickly deplete your cash reserves. Add in the months-long wait for reimbursement for anything sold on credit, and you could be seriously cash-strapped.
Failure to anticipate or react to competition, technology or other changes in the marketplace.When you are busy, it is easy to look the other way while things around you are changing. However, just imagine trying to cater to a young, trendy crowd in a community where the population is aging. It will not be long before you find yourself in trouble.
Believing you can do everything yourself.The SBA says one of the biggest challenges entrepreneurs face is being able to loosen their hands on the reins and start delegating to trusted employees. You cannot do it all yourself—you must rely on those who have proven they can handle responsibility and make things happen, and then trust their judgment.

Many individuals deciding to open a salon or spa have worked within the industry. Many who decide to open a salon or spa have not worked in the industry, and may only have an understanding from a customer’s point of view. Others come with tremendous acumen but little understanding of the business, how it works, employee remuneration, service development, operational and technical issues, just to name a few. Many technicians come with an in depth understanding of their trade and guest service standards but little knowledge relating to what it takes to operate a business, all of the accounting and reporting issues, and often, an unclear picture of what the venture will cost or, whether they have the ability to be profitable.

A Spa Business Plan, Medical Spa Business Plan, or Salon Business Plan is such an important first step in the process on your quest to open your own facility. Streamlining your ideas into one document serves dual purposes. First, it forces one to streamline and organize their thoughts. Second, it is a working document for the bank, in the event you need financing. If you have not done this before, we highly recommend hiring someone who can help you with aspect. There are hundreds of tasks to compete before you open your doors and many expenses and needs you likely have not thought of or, need to determine their importance in the bigger picture. If done property, this document should do the following:

Identify the type of facility, types of services to be offered, square footage and space allocation
Research available space in the area and determine cost per square foot for lease along with common area maintenance, taxes, and insurance for the space
Research businesses for sale
Thorough understanding of the lease
Cost of tenant improvements for the space along with allowances
Architectural, Design and Engineering fees
Planning and Permitting fees
Realistic opening dates
What must be included in the space plan to assure the facility is workable, comfortable and efficient
Thorough competitive analysis for the area including pricing, services, products used, look of competitors facilities and more
Overview of the Beauty Industry in the United States and in your State
List of services to be offered and pricing
Thorough demographic study of the area
Revenue assumptions for at least three years
Detailed budgets by year
Cost of financing factored into cash flow
Cash flow analysis for years one and two
Detailed equipment list by room
Identify specialty equipment
Weigh lease versus equipment purchase
Detailed operating supplies allocations and listing
Detailed budget allocation for retail items to be sold
Detailed budget allocation for supplies to be used in services including disposables, tools and products
Compensation for employees
Renters versus employees-which works best
Recruiting
Estimates for renovation of the space selected
Marketing budgets
Beginning work on branding
Breakeven point

Business Plan Templates

Business Plan templates usually are not specific to this industry, nor do they provide an effective way to project revenues. We use our own specially designed template, customized for the beauty industry. We have an in depth understanding of revenues within a facility, how they are generated and more. The business plans we develop serve as your operating budget, estimate every conceivable expense item, and allocate funds accordingly.

Research, Demographics and Competitors

No matter where you look, you will find hair salons, nail salons, day spas, and at times, resort or destination spas in or around the area of choice. Can you compete? Is the market over-saturated? Is your concept unique, marketable, and enticing enough to move a client from their current salon or spa to yours? How will you get the word out about your facility? How will you get technicians to want to work for you? How will you make your employees understand the importance of guest service? What should you look for in lease negotiations? How much cash will you need for your first year or two?

So many questions are in need of answers during this process. Let us simplify the process and develop the working tool you need. Although there are no guarantees for success, fewer surprises and more information make the process a bit less daunting.

Knowing your customer and being able to identify them is important. Also, are there enough of them to keep your revenue streams where they need to be. Are you in a seasonal area? How much do tourists affect your business?

Equipment and Services

If you “Google” Spa Treatment Tables”, hundreds of pages are revealed. They can range in price from $100 to well over $7500. What ones do you need? Who are the best equipment manufacturers? What functionality do you need based on the services you will provide and the types of technicians? Warranties? What does your architect need to know about your choice?

This is just one minute set of questions to be poised for each area within your facility. Understanding how to first budget for the expense, and select the items later, works best. Let us help you outline and detail every space within your facility.

Developing a service menu can be overwhelming. There are number of ways to do it, but how can assure you have thought of everything? Did you do the math? Do you understand how Pareto’s Principle works and how it will affect your menu planning? What services will drive your business and entice clients? What product lines should I select? Why?

Look at our article titled “Writing an Effective Spa Menu” for additional information.

Facility Design, Décor, Layout

During the budgeting and business plan phase, you likely do not have a floor plan, nor do you have a detailed list of finishes, flooring, lighting, electrical, HVAC, plumbing, millwork expenses and so on. Estimating costs is likely the only way to begin. So much depends on the condition of the space along with the vision of the architect and designer.

Designing a new space is likely the most enjoyable part of process for the business owner as it is their place to imprint their tastes and likes. Make sure your architect, designer and spa consultants are clear on your vision and, that you have budgeted adequate funds to bring your vision to fruition. It is easy to underestimate expenses here and, finishes are often the areas cut when a project goes over budget.

Marketing

One of the most important pieces of new facility development relates to marketing. What should you do? How much should you spend? When should you begin? It initial phase of this is outlined in your business plan. Print versus electronic media versus social media-which is best? There are many questions to ask and answer. A one-year pan from two months before opening out to your one-year anniversary must be prepared and evaluated as each week progresses.

How do I touch my community? What organizations are important here, should I join and what can I do through them to get the word out? Community mailing lists-are they beneficial. What charitable events can we become part of in the community?

There is no substitution for good planning and tracking. Was the event successful? How much revenue did it generate in relation to what it cost?

Total Project Costs-Be Realistic

A good business plan paints a realistic picture of what a project will cost. Can you do it cheaper? Maybe. Should you? That is up to you. Do not be delusional thinking you are going to open a 5000 square foot facility with locker rooms, and exquisitely designed for $50 per square foot. Many getting into this business do not realize how much it costs just for the buildout and finishes. A project will likely cost between $125 PSF to well over $300 PSF depending on the condition of the space, finishes, equipment, pre-opening expenses, training and more. Having a good idea of what it will cost and how long it will take to recoup your investment should be one of the goals of your business plan.

Having someone else assist with your business plan could be one of the best investments you will make.

Summary

This step is so important. Let someone with experience in the industry assist with this process. What would take you months to do can be done in a short time and, answer most of your questions. This important step is the precursor to your success. Do not leave it to chance or guess.

Entrepreneur Magazine, September 9, 2014,

The post Why is a business plan an important first step in salon or spa development? appeared first on Spa Advisors.

Developing a Strong Web Page for Your Salon

Spa Advisors — Tue, 04 Aug 2015 19:24:39 +0000

Overview

Developing an effective web page is one of the most important marketing tools you will have in your arsenal. Your web page will be accessible 24 hours per day, 7 days per week, and 365 days per year. Potential guests can peruse your web site at any time and determine whether your facility is the right fit for their needs. For this reason, it is imperative that your web page makes a powerful statement to current and potential guests.

Have you ever heard the say “Garbage in, garbage out?” This saying holds true in the development of a web page. You must put the time, effort and research into the work to make sure your vision is understood. More and more individuals and businesses look to the Internet to do research, learn, evaluate and investigate. Making yourself easy to find and making a great first impression will lead many to your facility. No other low cost tool touches as many potential guests, educates and informs as does a well-done web page.

Where to start

The following is a list of tasks you will begin with during the planning process. Most are simple and take very little time. Again, be thorough and do your homework. The time and effort you put into the page planning, the better the outcome will be. Write everything down and be sure you can show strong examples of likes and dislikes. What image do you want to portray on your web site? What web pages do you feel portray a similar image? How did they do it?

Secure web addresses

In order to have a web page running on the Internet, you must secure web addresses. These are procured through a variety of sources such as GoDaddy.com, Dotster.com and many, many others. You can go to any of these or many other sites, type in a potential web address and see if it is available. If, for example, your salon name is Mary’s Beauty Salon, you might look for MarysBeautySalon.com. If that name is unavailable, you may choose to add your city. Next, try MarysBeautySalonScottsdale.com. You may want to get a few addresses, all of which would be a likely search. You will be able to point each of these addresses to your home page. You will pay a yearly fee for each address. You may want to shop around for rates.

Peruse numerous web sites related to the Salon Industry

Spend several hours looking at numerous salon web pages. Look at every local area competitor’s page along with successful salons across the country. What pages do you like? Why? Make a list. On one side puts “Like” and on the other page put “Don’t Like”. List each page under one category or the other. Add the ones you like to your computer’s favorites so you can get back to them easily. Look at photos, image portrayal, pages and tabs, social media presence, blogs, etc. Look at fonts and colors also.

Look at every competitor’s web page or Facebook page

Learn everything you can about your local area competitors on their web page, Facebook, Twitter and Pinterest accounts. Print their menu of services, look at their pricing, learn what products they use, do they employ technicians or rent space, etc. This is the beginning of your competitive analysis and the information will help you later.

Search other industries web sites too!

Do not feel that your guidance can come only from industry pages. Often you will find amazing web pages for restaurants and retailers that have a look and feel you like. You likely have a list of pages you go to on a regular basis. Why do you like them? Are they easy to use? Are they in anyway applicable to your web page development? Do they sell products on their pages? Do they ask for guest feedback?

Do it yourself or hire a web developer?

I am a firm believer in doing what you do best and leave the rest to others with the expertise you lack. If you have the ability to develop a strong web page and have the time, do so. It will save you time, frustration if you cannot communicate your thoughts properly, and money. If you do not have the skill and experience, hire someone. Many companies and individuals do just what you need; however, fees vary dramatically and often for the same result. You should develop a request for proposal or RFP to assure there are no gray areas and that everyone is bidding on the same scope. Your RFP should include:

Your business name, web addresses, logos and other information they will need
Detailed overview of the type of web page to be developed
# of pages
Start date and finish date for the project
Due date
Information on what types of images will be provided and what will need to be purchased
Will a logo be provided?
Information on colors, look and feel of page.
Social media interface needs.
Interface of salon software if applicable. Have they done this before?
Breakdown of pricing with a separate bid for on-going support
Make it know that you want to own the web addresses and have access to all Word Press, Google Analytics and other information at all times upon development.
Have they done salon or spa sites before? Have them give examples of their work.
Do they have a strong understanding of industry to assist with strong key words and links to the web page through organic, free searches in Google and other search engines?
Do you feel the web developer understands your vision? Is she/he easy to contact? Do they respond quickly to your needs? Do they listen? Are they creative?

Determine what look and feel you want for your web page before you hire anyone.

The preparation you put into this process, the better the end-result will be. For example, if you are opening a very high-end salon, you do not want a $99 haircut and color special banner on your landing page. The web person you hire may come up with much better options but be as prepared as you can be.

Create an outline.

Use the guidelines we are setting here and modify as needed.

Landing Page or Home Page

A landing page or home page is normally the main page, directing visitors to all the site has to offer. It should include a lot of general information. You will communicate some information via tabs located in one or two locations on the page, along with other information via boxes that are clicked on that expand and or send the visitor to another page.

The key to making this page effective is to make a strong image statement with your large visual image then keep the boxes and tabs neat, well-organized and logical. Make sure you have the right to use any images you may pull from the Internet. For example, if you carry Wella and there is an image of theirs you would like to use, get permission from their marketing and cooperative advertising departments to use the image.

We prefer clean, simple and targeted home pages. They must catch the visitors’ eyes, spark their interest with the content, then push them to click on the tabs to learn more. Think about the landing pages of the salon web pages in your “like” column. How do they entice you to delve deeper into the site?

Here is what we feel the home page or landing page should include for a salon:

Large image shot in the background which could be an amazing style or some other photograph or image that portrays the image you wish to instill in the visitor.
Tabs across the top of all categories of information. Most will likely have sub-tabs further organizing information and making the view easier. For example: “Our Services” is main with “Hair Services” as a secondary tab, then sub-tabs could be Color, Straightening, Cutting, Styling and Finishing, Corrective Services. It forces organization and allows the guest to look in more detail at each item.
Small tabs across the bottom with additional information likely included in the tabs above. Often, “Contact Us” and a direct e-mail link located here.
Link to a “Gallery”. This may be photos of the salon or styles created by hairdressers within the salon.
Box-Your address, telephone number and e-mail address should be present along with a Google Maps link or other mapping program that tells the visitor where you are located.
Link to your Blog and all social media tabs and links. Make sure you can be “Liked” or “Followed” through your web page.
Box-Features that are weekly, seasonal or holiday driven. “What’s Hot?” Here you may highlight a trend, a fad, a stylist or share great information. You may also choose to spotlight a new product and styles developed using the products.
Box to click on for a PDF of the menu. It is so important to make it easy for customers. Most salons create a menu. It may or may not have pricing. In many salons, prices vary by technician. Have a PDF of your menu created that a visitor can print. Many people want a print version. If they can print online, you do not have to send or e-mail menus to them.
If you have on-line booking, you should have a large box for that link.
If gift cards are available on line, there should be a box and link.

Tabs

There are a variety of or icons we recommend across the top and bottom of the landing page. Repeat them at the top and bottom of every page, not just the home page. This makes the page very easy to navigate.

Contact us – The page should show the telephone number and hours of operation for the salon. There should be a link to the on-line booking module and, a “send an e-mail” box that opens up an e-mail. A visitor can then type an email and ask their questions. Another recommendation is a “ Tell us how we did” section. There should be a questionnaire on this page for guests to fill out. You should also have a place to post the great reviews via links. You should change the names or delete the names of guests. Guests should be able to place a one to five-star rating, just as on Yelp. Many will not sign up for Yelp, nor do they want to be bothered. Have the same rating system within the web page.
About us – Here, you must sing the praises of the facility. “Our History” is the history of the owners, vision and other information. “Our facility” would include photographs of the facility, views if applicable, photos of well-designed and enticing treatment area, and so on. “Our Staff” a sub-tab here. Every staff member should be listed by first name and last initial only with a large group photo. Individual photos can be done also, based on staff preference. Speak about each staff member with a focus on their “expertise” as that must be what helps to set you apart from the rest. Another sub-tab, “Want to be part of the team?” This should link to an application that can be filled out online and submitted.
Location & Hours – Place hours of operation here but also stress that early and late appointments are available. Again, the telephone number and address of the facility along with the Google maps link should be part of this. Allowing guests to contact you with questions is very important. This allows them to feel connected from the start and they are able to have questions answered. List holiday closures if any also.
We are Social – Facebook, Twitter, Instagram, Pinterest, and other sites should all link to your main web page. Blog & Feature Articles-This is something that should be updated each week with information about a special for the week, featured product, new service, new staff member. Use all of these to communicate with visitors, post open appointment slots and give incentives during slower periods. The larger the amount of followers, the more effective your marketing efforts via the web will become.
Our Press – If you are interviewed for articles or on television, post links here along with the covers of the magazines. Have you created YouTube videos about your salon or commercials for your salon? You should also send out press releases when you launch new services and add new staff and include these here.
Private parties and special events – Many facilities are the perfect size for someone to rent for a few hours or a day. For a set hourly rate, many facilities find that renting themselves out for hours or a day is a great revenue stream on slower days. This is not an option for all facilities, but can be after hours for most. The price per hour should be calculated in advance so that information is available in the event potential parties call in for information. A comprehensive list of party types and pricing should be prepared.
Services – All services master categories should be sub-tabs such as Face, Body, Massage and Wax. Under “Face” list each service, the price and detailed information about the service, who it is recommended for, and so on. There could also be a link, based on the software that says “book it”. The guest should be able to click on each service for a more detailed description. This detailed description will inform the guest about the service, the results they can expect and more. There should also be a PDF of the menu and separate price list if you do not wish to publish prices on the menu itself. This should be able to be down-loaded from the web site, saving paper and enabling the guest to print it if they choose. It is not necessary to go into detail relating to every product used but you should have logos for each vendor placed on this page. The logos should be a link to an overview of the vendor, their products and so on. Packages will also be included on this page and will range from two services to a full day package and couples packages. Series will include three, six, or twelve like services. With a package of facials, discounts will increase based on package size.
Memberships – Memberships may or may not be a large portion of the business based on the facility type. Memberships are a great way to develop a regular business stream from individuals more driven by lower priced opportunities. I always recommend limiting memberships so there to create a sense of urgency.
Rewards Programs – Most software systems have the ability to create members and, to incent them based on purchases. In salons that ring guests centrally, this is highly recommended. It is not free and therefore the cost of the programs must be calculated into the financials. Guests will automatically become members unless they opt out. Every purchase will bring them closer to $5 rewards per $100 spent. Off days can also count as double point days, such as Tuesdays.
Spa 101 and FAQs – Many salons and spas have this on their web site and it is easy to create. This tells a potential client what to expect in their service and answers questions they may be uncomfortable asking. You will find there are certain bits of information that many guests require. Have the questions and answers there for them.
Our products – For now, this should just highlight the products retailed with a telephone number so guests can call to purchase. Eventually, selling items online should be a goal. For now, items such as new additions can be highlighted and the guest can call to purchase or, there can be a link to an e-mail that allows them to email the spa to place the order. The spa would then call the guest, get the credit card info, etc.

Key Words, Metatags and Limits

As soon as you begin your web page project, begin writing down key words, sentences or phrases that may lead a visitor to your page. Keep a list as you will continue to come up with more as you move forward. Let me give you an example using Mary’s Hair Salon again. I would also list every competitor in my key words so when they were searched, your page would come up.

Marys hair Scottsdale
Salon Scottsdale
Marys hair
Find a colorist in Scottsdale
Stylists in Scottsdale
Hair salon Scottsdale
Hair salon phoenix

You can sign up for Google Adwords and list a variety of highly pertanent search words and combinations that will lead a visitor to you. This can be very expensive if you do not set limits and do not understand how it works. This is where I highly recommend hiring an experienced web developer who is well versed in this concept.

You should also list all the lines you carry such as Paul Mitchell, Aveda, etc. and, specialty services that are known by their names. For example, Brazilian Blowout. I would list Brazilian Blow Out, add Scottsdale to it, etc.

Organic searches lead the visitor to you without paying. This is done over time in order to sort on page one or two of the search. You should make sure you do everything you can to exploit those options first as paying for every variable is very expensive.

Make sure you limit your search area also. For example, if you are in Scottsdale, AZ, it is unlikely someone in the Middle East, for example, will want information about your salon. Limit the search to the United States. Often vacationers want to find a salon or spa so I would try not to omit those who are looking for a salon or spa visit on a vacation.

Analytics

Most web page hosts have analytic software that can tell you how many people are looking at your site, where they go on your site, and more. They can tell you the time of day also. Check to see what words visitors are using to find you. Also, look at their recommendations for additional words to add to your list.

Your page as a whole

Once your page is up and running, go through each page, questionnaire, link and tab to make sure they are functional and whether there are modifications that can make the page more efficient, more logical or easier to navigate. Do you like the look and feel of the page? Check for typos, incorrect photos, links and so on.

Make sure you have the ability to make changes, blog and post information.

How does your new web page compare to your local area competitors? Make sure yours stands out in the wide array available in your area.

The post Developing a Strong Web Page for Your Salon appeared first on Spa Advisors.

Should you change your skincare line?

Spa Advisors — Fri, 24 Jul 2015 02:50:14 +0000

Overview

So you are thinking about taking making a change! Leaving one skincare line for another can be a huge step. You are likely wondering whether you have considered everything necessary to make an informed decision. If you are very loyal to your suppliers, you may be feeling guilty or apprehensive about taking a leap into the unknown. Should you stay with the company that you know or, opt for some adventure and take a chance on the unknown? Have you done your homework? Changing lines is expensive, time-consuming and likely requires retooling of a menu, pricing, product assortments and more. The more you know, the more research you perform, the more you familiarize yourself with your competitors, research which product lines are out there, develop your long-term plan and determine which of the many, many product line(s) marry up best, the more comfortable you will be with your decision.

Remember, the larger the facility, the more difficult any change can be. The next pages will enlighten you, stimulate thought, encourage you to take a long look at your existing business and, determine where you want your skincare business to be in six months, one and two years down the road. Do you want to venture into other categories not currently covered? If you are reading this article, you are likely contemplating a change.

Why do spas change product lines?

When a spa or salon contemplates a change, it is often due to a number of reasons and not just one. Sometimes it has little to do with the performance of the vendor or the products themselves. Making any sort of change in a business is often difficult and can have an unintended ripple effect on seemingly unrelated parts of the business. Some of the reasons include:

Change of management/Spa Director
Menu change-change in direction, pricing structure, or change in the spa’s philosophy and types of products carried
Integration of new corporate program dictated headquarters
Over-saturation of a line in a specific area
Poor performance or decreased overall performance in the service and retail classifications
Deterioration of vendor support due to changes implemented by the company or management
Chronic out-of-stocks, shortages, shipping errors and other replenishment issues
Lack of interest by spa guests and lack of repeat purchases of retail items
No longer compares to the quality, technology or results of other products in the market
Lack of new services or new products to refresh service and retail assortment from vendor
Lack of an integral component needed to satisfy guest requests such as peels, medical grade service items and products
Change in direction by vendor
Lack of communication, miscommunication or no communication between spa and vendor

Questions you should asking before changing skincare lines

Making the decision to change a skincare line is one that should be allowed ample time for research, planning, testing, evaluation and preparation for a launch. This is a huge decision for any spa. If you are considering a change, please first yourself and your staff the following questions:

Skincare Line Modification Questionnaire

#	Question (Place a √ in the appropriate box.)	Yes	No
1	Do you carry more than one retail and service skincare line in your facility? How many? _________
2	Have skincare service sales utilizing this product line increased yearly for the past two years? Run sales for the past two years. If yes, how much? If no, how much was your increase (+) or decrease (-) for those years?
	List the amount of the increase or decrease here:__________________________
3	Do you feel this line is over-represented or over-distributed in your market? How many competitors carry this line? __________
4	Have other spas or salons within a five-mile radius added this skincare line since it was launched in your facility? If yes, how many? ________
5	Do you feel a change in skincare lines might revitalize your skincare business? Do you feel changing lines will correct issues within the facility?
6	Do you feel this line of products and their corresponding services are priced appropriately for your market? Too high? Too low?
7	Does this vendor limit the number of facilities carrying the line in your region?
8	Do you sit down for a Business Planning and Development Meeting with this line’s Sales Representative and Regional or National Sales Manager at least one time per year? Are they aware of the issues you may have with their product line?
9	Have you added new services or new products developed by this vendor in the eighteen (18) months?
10	Have you had complaints from customers and/or staff relating to quality, efficacy, or results relating to this product line? Explain.
11	Do you satisfy the predominance of your clients with this brand? Facials? Peels? Major skincare concerns such as anti-aging, hydration, hyper-pigment, etc…
12	Do you feel this skincare line is keeping up with the market changes? Is their science sound? Have they or, are they in the process of, removing harmful ingredients from their products?
13	Do you feel you have the background and expertise, knowledge and capital to launch a private label product line to replace one or more existing brands?
14	Is brand recognition important to your client base and to your staff?
15	Have staff members or clients voiced concerns over ingredients contained in this product line?
16	Have staff members or clients voiced their opinions relating to the need for additional treatments and products based on trends they have seen or heard about?
17	Do you know how much stock you have on hand from this vendor? If not, you must determine the actual cost value of the service items (open and unopened) and all retail items.
	Total $ Professional: ________Total $ Retail: _________ Total $ On-Hand with this Vendor_________________
18	Have you made a liquidation plan for your current stock in the event you change lines? If yes, what?
19	Have you begun the research process for an alternative line? If so, how many are under consideration? Have the vendors sent your products to try or, arranged a demonstration for you and/or your staff?
20	Have you attended National or regional tradeshows to see what products might be a good fit?
21	Have you sat down with the Sales Representative and National or Regional Sales Manager for each line to see what their companies offer?
22	Have you done a competitive analysis recently? If no, you must list every competitor in a five or ten-mile radius (day spas, salons and medical spas). You should have a copy of their menu and pricing and know what product lines they carry?
23	Can your skincare line be found on discount on-line websites for substantially less than what it is sold for at your facility?
24	Do discount on-line websites hinder retail sales of this product line in your facility?
25	Does your current skincare line offer training classes either on-line or in person to your staff?
26	Does your current skincare line send samples of new products at no charge to technicians and owner to try?
27	Does your current skincare line list you as an authorized dealer for their product? If yes, do you derive additional business through this exposure?
28	Have you thought about how you will communicate the change to clients loyal to that brand? Formulate a plan.
29	Do you have regular clients (appointments at least four to six times per year) that may be disappointed in a change or, perhaps move elsewhere?
30	Do you have a comprehensive database with email addresses, cell phone numbers, and addresses for all or most esthetic clients? Do you market to them using this vehicle?
31	Do you have a web page and a Facebook page for your facility? Do you use them to market new services and products?
32	Do you use Constant Contact or have another means to email clients?
33	Has shipping from this vendor been inconsistent? Continual out-of-stock issues?
34	Does your vendor assist with the liquidation of aged, re-packaged, or discontinued products? If no, how much of your inventory is represented in these categories?
35	Have you evaluated your service sales? What services should stay, which should be 35 replaced, what new services should be added?

Should your staff be involved in the selection process?

There is not a yes or no answer to this question. The decision to involve staff is an important part of the process and depends on the situation. Sometimes a decision such as this can cause unrest if not done properly. In a larger chain, it is unlikely more than a few staff members will be involved in the process. In a small facility with few technicians, input from them will be more critical to an informed decision. Making informed decisions as a team works best overall as long as everyone understands the rules and the process. Make sure you define the process and expectations clearly and well in advance. As a manager, you must understand that everyone will have an opinion and often there will not be a consensus. More often than not, staff members are not familiar with everything available to them.

When involving staff in the decision, use these tips as a guideline:

Let your staff know you are considering a line change and that you would like input from them over the next weeks. Be prepared in the event you staff is not receptive to the idea.
Determine in advance how many individuals you want to assist in the decision. You may choose to have only one or two represent the group. Consider not only their technical skills but also their ability to sell product.
Have a meeting to define the guidelines clearly and understand the process. Make sure they understand there are many factors involved in the decision from a business and financial standpoint.
Make sure each person selected is committed and will put adequate time and thought into the process. They must remain open-minded and ready to learn new things.
Set a deadline for the final decision.
Prepare worksheets with criteria to evaluate all elements involved in the decision-making process.
Ask each to submit a list of lines they would like considered and why? After you have evaluated your list
against theirs, make a determination of the three to six finalists.
Make them aware of all elements that go into the final decision.
Make sure the staff understands the decision is yours; however, their input is critical to the equation.
Listen to their thoughts and concerns. They will think of things you have not.

Begin vendor communication. Contact each line and set up staff demos if possible or, time your change around the time of a large skincare show. These allow technicians to ask questions and experience the products. Often skincare shows are an excellent way to experience new products and product lines, but many of the biggest and best do not attend smaller or regional shows.

Fifty Questions to ask every vendor and contemplate before you make a change:

Not all vendors will be able to answer all questions, nor will all apply. Do your homework. Remember, they do this every day. You do it occasionally. They will have the answers you need and most gladly provide them. Remember, a vendor is a partner. You are partners in success.

About the company:

How long has this brand been in business?
Do they have other brands within the spa arena?
Who owns their company?
What type of research and development facilities do they use? Do they develop their own products or place their own label on items developed by others?
Does the brand have international distribution?
What type of support staff will be available if we move?

Their competitors:

Whom do they view as their competitors in the industry?
What salons, day spas, resort and medical spas carry their products in your area?
How would they class themselves within the industry?
How do they set themselves apart from the competitors?
How does their technology differ from their competitors?
Are they willing to limit distribution of their products in your area or create an “exclusive” arrangement for your facility?
What lines do they find complimentary to theirs?

The numbers:

Do they supply a cost of goods analysis for all of their recommended services?
Pricing: Regular salon pricing (50% off retail) is standard. Are additional discounts or distributor pricing arrangements available?
Do they have programs in place to analyze performance of their brand within the salon or spa? What programs?
Are they willing to purchase the existing product line, dollar for dollar, in order to install theirs? If not, what can they do to assist in the liquidation process? How?
Will they allow terms of Net 30 or better on monthly orders?
Most vendors have a pool of funds made available to a facility based on purchases. How do they normally allocate those funds? Do they allow you to select how you wish to receive your incentives?
Once you have received the written offer, how does it compare with your skincare line and others in contention?

Marketing:

What type of consumer marketing is used by this brand?
What publications?
Ask for a copy of their yearly marketing calendar.
How do they normally launch new products or new services?
What types of collateral materials are available? Is there a charge for these items?
Does their Facebook page or web page have a place for customers to seek out salons and spas carrying their products?
Do you feel any of their marketing and collateral materials can be used in your facility?
Whom does this vendor see as their target demographic? Does that demographic mirror yours?
Are they willing to do special events to introduce the line to key guests within the facility?
Does this vendor distribute via infomercials, Beauty Brands, Ulta, and Sephora?
Do they have freestanding locations or, do they intend to have them?

Training:

Is on-site training available from this vendor? If so, for service? For retail?
Will they train customized protocols?
How much education will be provided yearly? When? Where?
What educational events does this vendor sponsor?
Do staff members have access to on-line, web and Skype trainings put on by the vendor?
Is there a charge for education?
Is retail selling incorporated into all trainings?
What types of training programs are available if the line is brought in?
Will an educator come on site for training? On-line education? No education?
Do they have training manuals and protocols available for their services that can be customized by location?

Products:

Have the vendor supply a list of ingredients for each product.
Are Material Safety Data Sheets available for the products?
What sets their products apart from their competitors?
Where are their products manufactured? Where do the ingredients come from?
Do they have the ability to adjust stocks, trade out slow sellers, etc.?
Can testers be provided no charge three times per year?
Can technicians be supplied complimentary full size product for every new product launch introduced into the facility?
In order to avoid carrying the entire line, many vendors will ship slower selling, more specialty items directly to the consumer and bill the salon? Does this vendor have that ability?
How many items in each category? Face_____ Body______ Specialty and Peels________
How do price points compare to the line you will replace? Higher? Lower? About the same?
Is this line easier to recommend to clients and, is the guest more apt to purchase this line?
Can the vendor provide you with a list of their top twenty items per category? Their top twenty items overall?
Does the vendor take back open products returned by the client for reasons of allergies or other health-related concerns?
What is your opinion of their packaging? Well-done and unique or generic? Uniform in appearance or in the middle of repackaging? Easy to read and identify? Are all products boxed?
Are the bottle and jars enclosed equal in looks and appeal?
How would you class the line? Sea-based, Aromatherapy, Cosmoceutical, Certified Organic or Clean ingredients, Item-driven scientific.
Is there additional technology that must be purchased in order for the services to be performed and the results achievable? For example, Intraceuticals requires an oxygen generator for the administration of products.
Do new services have a quality and end result that will allow for a higher price?

Other considerations:

1. Do you feel you have a strong relationship with this vendor? Will they follow through on their arrangements?
2. Did you ask them to supply a written overview of the arrangement so there are no questions or gray areas in the future?
Have you called other salons and spas carrying their products in other parts of the country to see what they like, do not like about the line?
How often will a representative service your account?
Do you feel this new line will perform substantially better, will have more employee and
client acceptance, will generate re-buys on a regular basis, will address a greater assortment of guest
needs and is priced appropriately for the guests?
Are there issues that with the line that may be problematic? Could they adversely affect sales
long term?
Does the vendor reserve the right to drop the account at any time, for any reason or, no reason?
How should problems be communicated to the vendor?
Will it be worth the effort to make the change?

Branding and line choice

There are hundreds of skincare lines available to consumers. They range from mass market, opening price point products available at drug stores and bargain chains to high-end “couture” skincare with prices comparable to those of precious metals’ equivalent in weight and, everything between the two extremes. There are many amazing skincare lines on the market exclusively distributed to spas. The perfect line for your facility is out there. You must figure out what fits best into your facility for your clients, their budgets, and their needs. Remember, the decisions you make are for the guests and not for yourself. Choose a line with an image, price points, story, and philosophy amiable to your clients.

Image is important. Making sure the line is equal to or greater in reputation is so important. Make sure the lines you review will work well with your brand. Do you feel the brand’s image is equal to yours? Think about how this brand works not just today but with your plans one-year down the road.

Factoring in current costs versus projected costs in decision-making

Do the math. In order to make an informed decision, you must take into account every element that can affect profitability. Current costs and future costs are extremely important to the equation.

How do service product costs compare for professional sizes? Do they have a number of sizes of professional products available so small facilities do not have to purchase larger-than-required containers?
Do they require fewer items in their services? How many items are needed for a basic service? A specialty service?
Did you check the vendor’s math? For example, if you know one ounce of cleanser is normally used during a facial, their professional size is 32 oz. and they say 64 services can be completed with one bottle, their costs are likely off.
Did you add extra in for waste, over-use, etc.?
Did you add in cotton products, specialty sponges and other required items into your calculation when calculating the cost of goods for these services?
If the prices are substantially higher, meaning a higher cost of goods and higher service prices, is the end- result better? Will the higher be justified in the client’s eyes?
If the prices are substantially lower, do you feel the quality of product will meet your clients’ expectations. Would you lower your service price?
The disposition of existing stock is one of the biggest considerations an owner faces. How will the new vendor assist in this process?
Does the vendor require representation of the entire line?
If the cost of goods for each service will be substantially higher, how will you offset these expenses? Higher service prices? Lower commission rates?
Will the vendor ship retail items directly to the customer or allow special orders to avoid carrying every retail item in their line? Many vendors now ship direct to a customer and charge the spa a higher cost of goods for this service.
Are fewer items required for services? Does this make a difference in the costs?

Pareto’s Principle

Everyone has heard about Pareto’s Principle (The 80/20 Rule), but may not apply it to every aspect of their retail and professional skincare business. In essence, every product and every service does not perform equally. When you look at your own numbers, you will see this. You want to look at both your retail sales and your service sales. If you can run them by category, that is even better. If not, you may need to do some data manipulation in Excel.

Most software does not run the report exactly the way you need. You must export to Excel. Sort the data two ways:

By total sales in descending order
By total units in descending order

You will find that very few items and very few services represent a disproportionally large portion of your sales. For example, in most spas, their basic deep cleansing facial is normally their best seller. This is true for a number of reason ranging from price to its appropriateness for the most individuals. Look at the number of items on the report. For the purpose of this piece, we will use 400 as the total number of retail items. If you look at your top 80 items, it is likely they represent very close to 80% of your business while the other 320 items represent only 20% of your sales.

Do the same thing with services. Again, run the reports. If you have 100 services including all wax services, facials and other related services, you will find the same holds true. Twenty of those items will represent very close to 80% of the total sales.

Everyone’s first instinct: I only want to carry the top twenty percent! Use this information when formulating orders, reordering and when launching a new line. Likely, there will not be much difference. Often times higher vendor minimums and case, packs create some of these problems but not all of them. This exercise will make you a much smarter operator.

Your product mix-Can you anticipate every need?

When you are evaluating each new line along with your current line, how many specialty items occupy your bottom 80%. Most salons and spas have this issue simply because instinct is to make sure we have whatever is required to make the guest happy and sell product. This is great in theory but can tie up many dollars in inventory that may not perform as expected.

Look at the services that drive your business. Review your assortment. You will find the basic opening price-point service may be the best performing but others may be close in importance. For example, anti-aging facials and facials that focus on hydration may perform better than one for acne, problem skin, rosacea, and other conditions.

Look at the skincare products that drive your business. Are they cleansers, moisturizers, serums, eye products, sunscreens? In each of these product types, what are best performers? Next, look at your potential new vendors top twenty percent. How do these relate to your product types? Can you use their information to make informed decisions regarding your new assortment?

After your technicians have been trained and understand the products, find out which products they will recommend. This is so important. You will find most recommend a very small percentage of a product line, even though so much may be available. Look at each of the following categories to make sure you have these categories covered first, and then add additional items.

Cleansers: Anywhere from one to three based on lotion, cream, gels
Toners: One or two. Are they also makeup removers?
Eye: This is the most undersold category in the spa industry and needed by every client. Have one to three based on what they do
Moisturizers: One to four based on skin. Make sure to have at least one that includes a sunscreen.
Serums: Usually underperforming in spas, as these are normally expensive, not well understood and are layered under products. Special order these items to avoid slow selling stock.
Sunscreen: Something everyone should use but likely does not. Make sure you have a moisturizer and a lotion with sunscreen. Limit the number of SKU’s here. Two SPF’s for face, one SPF for body.

After you have made sure you will cover eighty percent of your existing sales, layer in additional items the staff feels will be key. You may also choose to carry kits if available for conditions such as acne, hyperpigmentation and more. These are normally more reasonably priced and do not force you into five or more items in a category that represents a small portion of your business.

Do not assume you can cover every guest’s individual requirements and do not try. When you are evaluating your services, look for information that will guide you in product and service choice. No one wants to miss sales because they do not have that one item a particular guest needs. If the sale is lost because you ran out of stock, shame on you. If the sale is lost because they require a specialty item you do not carry on a regular basis, make concessions for those “one-offs” in advance. Many vendors allow you to call in orders to be shipped directly to customers or, you can special order the items from the vendor and deliver it to them.

Should you carry more than one line? Chances are you may. There is no ideal number of lines to remain profitable. Every item on the shelf represents dollars that are not in the bank. Keeping your stocks turning three or more times per year is an important consideration. Each line is likely to decrease your stock turns considerably. Different technologies and results attract different users. Here is a good rule of thumb when deciding on the correct number for you.

Select your main product line. This line should be diverse, have strong products, brand recognition, capable of covering most professional skincare uses and has strong complimentary retail products. This line should have strong basics, quality ingredients, and price points in line with your market.
Adding a second line. Will the addition of another line increase business or cannibalize sales? Will the new line attract a different clientele? If a new line will allow you to layer on an additional business, definitely consider a second. If it does not, you may not want to make the investment.
Adding items. It is likely one of the most cost effective ways of adding to your assortment. Some lines allow you to cherry pick your assortment, while other will not. This is one of the most cost effective mean of getting key items into the facility without the expense of launching a full line.

How change can impact sales and getting the word out to clients

Replacing an existing skincare line with a new line can adversely affect retail sales. It can also give them the boost they need to get back on track. Doing everything you can to make sure the transition is easy will pay off. Will you see a drop off in retail sales? It is a possibility. Making changes to a regimen that works will be difficult for some clients. Everything you can do to make the transition easier will pay off. Here are some suggestions to avoid a sales dip.

Launch everything at once: New services and new products.
Make sure you have evaluated every item in the current assortment and replace those that perform in the top 70% to 80%.
Launch the new line with a special event. Make it a big deal! Make it exciting!
Put the new product front and forward! Make sure the customers feel the excitement.
You have likely discovered that about 20% of your customers purchase 80% of the skincare sold in your old line. Work with your staff to identify these guests, invite them in to try a new service and determine their new regimen in advance.
Launch the new line with service and retail sales goals for each technician. Most individuals perform best when they know exactly what is expected. Check their sales weekly to see how they are trending.
Use the launch to establish or reestablish better practices relating to retail and rebooking. This is something that needs reinforcement on a regular basis.
Do a social media blast announcing the launch of new services and new products.
Do a section on your web page about the new line, features and benefits, etc. Highlight a different one every week.
Make sure your staff understands which new products are the equivalents for existing stocks. Perhaps a “cheat sheet” is order based on skin type and condition or, based on item. For example, if they use Line A Gel
Cleanser, their new product would be Line B Foaming Gel Cleanser.
Check sales daily. Try not to run out of stock but do not feel you must own large quantities of each.
Have a “Product of the week” within the facility. Make sure it is available to sample and displayed in an area visible to all guests. By deeply educating your staff on a different key item each week, within a few months their grasp of the line and their ability to recommend the correct products will improve.
If you are not adverse to occasional discounts, create gift certificates or coupons, given to the customer by their technician, allowing them to try the new product at a discounted price.
Have samples available if guests are having a difficult time with a change.
Use samples to allow them to try an additional product in addition to the ones purchased.
Use prescription forms and product recommendation forms. Keep a record of the recommendation and follow up with guest in a week to see how the new skincare is performing.
Compare sales at the end of every month. How is the new line trending against the old line?
Check with the staff daily during the transition to see if there are issues that need clarification, additional products that should be added, etc.

You cannot put too much effort into preparation. Anticipating obstacles and unknowns will all lead to stronger sales.

Introducing your new line

Great operators have developed a means of communicating and following up with guests in a number of ways. Print and electronic media is very expensive and out of range for many small operators. Here are the easiest and most cost effective ways to launch your product:

Develop an email campaign to engage your current clients. Give them an incentive to try the new products. If you have kept your database current, this should be easy.
Capitalize on Social Media. If you focused efforts in the growth of Facebook and Twitter within your facility, chances are you have established a substantial following.
Create an Evite and invite current clients to experience the products once launched.
Make sure clients who participate in the launch events and come in for an open house or launch party, with a small goodie bag of samples and a certificate towards a service or product.
If you have a frequent shopper program, incent clients with double points on the new line for a short time.
Utilize Facebook posts to communicate information about the products and special events.
Create a contest for existing and new clients on Facebook that rewards a few winners with products or complimentary services.
Invite key clients in personally to try the new products and services.
Print media can be effective but is can be pricy. Make sure you have a strong message that will entice potential clients.

Monthly follow-up with your new vendor partner

As you planned this venture together, you should also evaluate the successes and disappointments with them on a monthly basis. Run sales by item for retail and share this information. Evaluating sales together allows you both to spot trends, strengths, and weaknesses. Remember, they have access to information from across the country while you may only have access to your small area. Take advantage of their expertise and successes they have witnessed in other markets.

The post Should you change your skincare line? appeared first on Spa Advisors.

Why hire a spa consultant?

Spa Advisors — Fri, 08 Aug 2014 16:38:19 +0000

If you have not opened a spa or salon business before, the task ahead is large! Hundreds of tasks must be completed, in an organized manner, in order to take your vision from a thought to a functioning, profitable business venture. The spa and salon industry is unique! If you have not operated within the industry before you decide to open your business, it is advisable to seek out experts who have opened successful operations over and over. Those who are currently working in the industry will also benefit from sound business advice. The reason to hire a spa consultant is simple: to save considerable amounts of time and money by having an expert available to simplify the process and, give you valuable input in the decision-making process. The level of involvement by the spa consultant is up to you. They are available to run the entire process or, simply to advise you as necessary. Everyone has a different series of needs and different levels of expertise.

Would you believe the same steps necessary to open a 35,000 square foot spa are also necessary to open a 3500 square foot spa? Yes, only 10% the size but with 100% of the planning, development and preparation needed to open the facility. In smaller operations, very few personnel are responsible for this large workload. Important details can slip through the cracks and often owner who should be marketing, image-building and overseeing the project are left to execute time-consuming tasks. Let someone who has gone through the process time and again help you stay focused throughout the project, quickly handle large portions of the project for you and, save time and dollars.

Whether you are developing a small day spa or a large resort spa, the endeavors are equally challenging. Beyond the scope of traditional business development such as developing a business plan, securing financing, identifying a location, designing and equipping the facility, hiring staff and developing treatments, there are equally important matters relating to marketing, permits, licenses, computer systems and more. New spa development brings a whole new set of industry-specific issues not found in many other business ventures. Hiring an experienced spa consultant in the planning phases of development is a commonality among spas and salons that are highly successful. What you are buying is the experience and expertise of someone who has spent the time, energy and resources to learn industry nuances and has formed strategic alliances with a variety of professionals who bring quality work to the table. This ultimately saves you a tremendous amount of time and money by avoiding common mistakes and keeps your project on budget and on time.

Opening a new spa involves the services of a variety of individuals and resources. Architects for spa design and layout, space planners, designers, project managers, educators, marketing and PR experts, Concept and Culture Creators, experts in procurement, management and human resources are all individuals a new business owner will need or, choose to fill themselves. The job can be overwhelming. Our approach integrates the work elements from all of these experts into a clear, concise and concept-driven project model.

Successful industries attract a wide array of investors and operators. Sometimes those entering the spa or salon industries are investors but most often, they are entrepreneurs who recognize a need in a community and know they have a concept that will be successful. Over the past two decades, I have watched the Spa Industry quadruple in size. At that time, many had not experienced a true full-service spa with amenities, nor could they conceptualize a business environment designed not only for therapeutic purposes, but also for pure relaxation and stress release. Spas have become an amenity demanded by most hotel and resort guests. Resort spas have begun to focus not only on hotel guests, but local alike. Day Spas have created niches in their markets by creating enticing environments and, are priced much lower than their resort competitors. Today you will find not only relaxation and stress release; you will find highly effective treatments whose benefits last for weeks. This success does not come without comprehensive research, planning, space planning and design, service development, staffing, education, evaluation and leadership.

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New Spa, Salon or Nail Salon Development

Spa Advisors — Fri, 08 Aug 2014 05:57:02 +0000

Every great business began as a thought or a “What if?” It is for this reason carefully planning is so critical to your business’s success. Before you take the first step, speak with us first. If you already have a location in mind, we will incorporate that data into the compilation. Let us guide you through this process.

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Merchandise Planning, Procurement and Assessment Tools

Spa Advisors — Fri, 08 Aug 2014 05:54:07 +0000

Selection of product assortment and quantities
Vendor identification and negotiations for industry-best pricing
Visual merchandising and display
Total financial accountability tools including pricing strategies, inventory turn, profit margins, sales analysis, seasonal merchandise selections, etc.
Open-to-Buy analysis and guidelines

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Facility Design

Spa Advisors — Fri, 08 Aug 2014 05:52:14 +0000

Assisting architectural and design teams with regard to boutique layout, fixture selection, lighting, and other space requirements

Establish assortment mix and corresponding fixture placement
Plan and design visual merchandising and display elements
Select props and visual decor theme
Identify ways to build retail visibility throughout the facility

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Additional Services

Spa Advisors — Fri, 08 Aug 2014 05:49:15 +0000

Collaboration with specific vendors for creating proprietary or branded products

Creation of product recommendation matrix (a technician tool) to encourage skin care product sales
Vendor identification and negotiations for best pricing on all service-related products and guest amenities related to retail
Cross-referencing professional service protocols and products to ensure inclusion in the retail component of the spa
Staff training programs and curriculum guides that integrate the retail component into each service

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