By Madelaine Winzer
This article explains how to run a spa business well and assumes it is already set up and established. The investment in and setup of a spa is a big topic, and we plan to cover more in a subsequent article.
In essence, running a spa business is no different to running most businesses. It needs to follow economic principles and attract people who believe in its benefits and contribute their time and skills, so customers see their genuine enthusiasm.
Like other personal customer care businesses, it needs care, consistency, clear communication, and calmness.
Successful businesses benefit their customers so much that they want to come back, pay a fair price for the products and services they receive, and recommend them to others, and we will explore this further in this article.
Let us look at some of the key business questions for a spa manager or owner.
These fall into two groups:
Customers and spa offering
Who are my customers? What do I offer them? What distinguishes my spa offering from others? How do we ensure our customers leave feeling rejuvenated and recommend us?
Economics and making it a viable business
What is a fair price to charge customers? What are my costs, and how do I make a profit? What risks do we need to think about? What about administration, booking systems, treatment records and customer information?
Customers and spa offering
You are responsible for finding customers, retaining them, and marketing your business to new customers.
To attract customers, you need a 'hook' for them to choose your spa, and this will be such things as an advertised spa package, a personal recommendation, a review they have read, distinctive treatments, the quality of the products used, the atmosphere of the spa or the attentiveness of staff…some of the many reasons.
Our research shows that customers often come as part of a group or as a couple by invitation, and they love to share the experience and tell others about it. Groups add vibrancy to your spa and inspire a sense of exploration, so it is always a good idea to maintain a steady flow of groups and couples.
Spa reviews often mention words like 'escape', 'relaxation', 'rejuvenation', 'cleansing ', and 'detox'. Customers value the feeling that a spa day or treatment gives them and will most likely share their experience with others.
Most spa customers are women, and that will likely continue, but we suggest finding an appeal for men who are very enthusiastic when they first discover the joys of spa. Men's facials, massage, and hand and foot treatments are increasingly appearing on spa menus.
The average age of spa-goers is gradually increasing, and there is a growing market and appeal for those with the time, money, and inclination to go. Tailor your marketing to recognise this.
Customers remember small details that make the spa different, and perhaps more luxurious, than what they have at home. Think about those, as they will talk about them and are more likely to come back. This can be the scents used, the quality of the robes, cleanliness of the changing rooms, etc.
We also recommend investing in high-quality treatment menus, descriptions, and photos. People love to browse online, and you can whet their appetite to book treatments. A quality spa will generate at least 50% of its income from the treatments given.
Remember that customers need refreshing drinks to rehydrate and enjoy, and they look for healthy, cleansing options in the spa. Offer iced, fruit-infused drinks and some luxury fizz. Customers need to feel refreshed and hydrated.
This is true to a lesser extent for simple, nutritious food that can be ordered, and you can be creative with what you offer.
Economics and making it a viable business
Deciding a fair price to charge is one of the biggest questions for any business. The level you pitch at says something about your spa and your target customers, and it determines the viability of your business.
You need to spend time and research to look at price ranges and what the 'market' rate is. It is not rocket science, and you will want to consider affiliation with discount schemes like Groupon, membership deals, preferential rates for hotel guests, rates for a series of treatments, etc.
Bear in mind that you want to make maximum use of the facilities you have so they don't lie idle, and staff aren't underused when on duty.
We advise against underpricing your products to allow flexibility to discount for group bookings or for two or more treatments.
The general business rule is that one-third of your price should cover the cost of your product and staff, one-third for overhead (energy, building use, insurance, marketing, taxes, cleaning, maintenance, etc.), and one-third for profit. You can then safely offer discounts or deals of up to 15% without losing money and cover quiet periods.
Always leave scope and money for things going wrong and contingencies, and consider the business impact; these may include accidents, infections, damage from improperly done treatments, and loss of key staff.
Also, regularly check facilities for accessibility, health, and safety, and train your staff in these areas.
Information systems containing accounting data, customer information, and records of treatments taken are a vital tool for you not only as a responsible and compliant business owner but also to have data which is extremely valuable to understand the flow and nature of the business and what sells and how to then adapt your business for best success and service.
This article only scratches the surface, but it gives you insight into running a spa and some important questions to consider. We wish you luck, and if you're unsure, please take the advice; it will help you build a business that brings enjoyment, wellbeing, and escape to your customers.
