The 5-step Competition Formula

The 5-step Competition Formula
Douglas Preston
competition formula
Yeah they’re everywhere now. New day spas are springing up like toadstools after a rain. Seems that all you need to get in on parade is a water spigot, some paint, and a stencil to add the overused title to your business’s sign. Voila! You’re a day spa!

The sudden profusion of plush or “me too” spa facilities has produced sentiments among the more established players that range from annoyance to panic. Spa owners find themselves jealously sizing up the threat that each new operation seems to present, looking for their flaws and faults–any way to discredit the legitimacy of a claim to the day spa distinction. And to make matters worse these “unscrupulous” competitors sniffed out your business while planning their own, and even managed to lure away a few of your formerly loyal employees! How could people be so sneaky and unethical? Forget about it.

Look, you don’t have to love your new neighbors but wasting time fretting about the effect they might have on your own operation won’t help you address the real issue at hand, that is, how to be the best on the block. And despite the coming competition the good news is that it’s easy to shine in the crowd–you just have to be willing to focus on the parts of your business most others will often choose to under-develop or ignore altogether. It’s not the spa that has the deepest pockets that’ll prevail over the others but rather the one that knows what spa customers want most, and then delivers it to them consistently. Now you really have something!

Before you spend too much energy circling the wagons to defend your spa business let me share with you the surest way to keep your customers, your employees, and your cash flow healthy and happy. If you follow my advice you’ll avoid wasting time and money reacting to perceived danger while building a better and more competitive business.

Lesson #1: Keep your cool.
It started with a rumor but now you have the news; a big luxurious day spa is under construction uncomfortably close to your own. Details pour in: they’ll have more treatment rooms, more locker facilities, that juice bar you couldn’t afford when you were building and, dread of dreads, are offering a higher pay scale than you! And it gets worse: they’ll have a meditation lounge, more wet rooms, and even a day care facility. You’re dead, right? Customers and employees will be flocking to the new spa faster than day traders to the next IPO, won’t they? You can see it now, appointments canceling, checks bouncing, all because your spa is suddenly out of fashion with the local market. Do you borrow money to remodel, give suicidal raises to employees, drastically lower your prices? Or give up? Hang on.

If you’ve done a good job pleasing your customers and staff, that is, really understanding what’s important to them and investing in the quality of these values you will have little to worry about. I’m talking about the things your business can and should provide that they look for most in patronizing and working for you. For customers it’s overwhelmingly consistent service quality and personalized attention. They want to be received and served by a genuinely friendly staff who makes them feel at home and appreciated. They don’t want uneven quality, self-centered spa professionals, or anonymity. Clients want to belong–to feel safe, cared for, and valued.

Employees have very similar values as customers do. Poll after poll demonstrates that employees value education, growth, recognition and appreciation far more than their income potential. They want an ethical and understanding boss who is both consistent and forthcoming with positive feedback about the good work of their staff–something so inexpensive to supply and yet typically spooned out on rare occasions. And while most spa owners and managers I meet rate their performance in these areas as excellent, interviews with employees and a sampling of the service programs regularly paint a strikingly different picture. I’m talking about the communication problems, uneven treatment procedures and timing, heavy-handed or weak management styles, and poor staff training if any meaningful training exists at all. It’s time to take stock of where your company stands in the crucial areas of genuine performance quality and see to it that you stand head and shoulders about everyone else in your local spa market.

Lesson #2: Be the most consistent in everything you do.
How would you rate your spa’s service and hospitality quality compared to o around you? If you believe you’re the hands-down winner you will be blind to performance deficiencies customers and competitors will find easy to spot. How often do you or someone you appoint shop your own business for a quality check? How else can you know if the reception staff is following the proper procedures or if therapists are short-cutting on services without it coming from a client complaint first? Are your employees thoroughly and uniformly trained on all spa service and sales procedures, or customer service techniques? Are you absolutely sure?

In order to be #1 in these critical quality areas you will need to put the following key steps into place:

• Know what you want. If your spa were a play production you would expect everyone on stage to know their lines, their places, the timing of their delivery, be in the proper costume, and to omit every emotion, attitude, and display of conflict not written into the script. A spa is in fact a play, that is, a place where customers are treated to a temporary escape from the real world, and where they are willing to pay for experience. Nothing else should be included. Begin by knowing exactly what this experience is supposed to be at your spa.

• Train everyone– again and again. Sure your performers know the script but it’s the frequent rehearsals that keep the performance crisp and consistent. Never expect that an infrequent training will suffice to prevent your service quality from drifting into undesirable “interpretations” over time. The effects of training are diminished by the day and must be repeated routinely in order to produce the results you want. This is the tedious but essential nature of business management–any business!

• Measure the performance for quality. Take a seat and watch the show. Look for weaknesses such as uneven sales between staff members, and client complaints about specific policies, procedures, or certain individuals. Spot-check the service schedule for efficiency or unapproved “line outs” by poorly motivated employees. And send in an anonymous agent to sample your services to look for the quality compliance you as manager cannot see. If your sleuth emerges from the facial cabin having learned more about relationships than skin care it is a sure sign that your team has gotten out of step! Only you can fix the problem.

Lesson #3: Price yourself higher than your competitors.
Okay, you think, now he’s lost it! But I’m dead serious here. The best spa must also be the most expensive–how else do you afford all that quality? If you plan to be different, hopefully meaning different in a better way than everyone else, you must also demonstrate that difference in your prices. Market realities dictate that quality isn’t free, and that you cannot and should not desire to be both the quality and low-cost leader. However, if you do elect to be in the upper end of the spa market you must be in the upper end of quality, period. It’s quite useless to seek the business distinction of being the same as but different than everyone else. It just won’t sell.

Lesson#4: Love your customers and your employees shamelessly!
I know I’m repeating myself but this point seems to need it in our business. If you want your loyal following to stick around then you must give them what they value most: attention, appreciation, and inspiration. This is something you won’t find on most drafting tables or business plans, and it’s also something all-too-often taken for granted. But the one thing your competitors can’t duplicate regardless of their startup budgets is the unique and rewarding relationships you forge between yourself, your customers, and your team. Business managers who truly take care of their people (those who value a structured and well-integrated environment, at least) will find them firmly disinclined to leave for the prospect of finding it elsewhere. And while a pie-in-the-sky promise may lure some away from you it will never be the ones who prove to be the most valuable as employees or customers.

In times of change the weak are frightened away but the steady will remain. You’ll discover in most cases relief in having lost certain employees who were never the most productive or cooperative among your team. We’ve seen competitors gloat over having stripped away some of our employees without knowing the productive quality or management compliance of these people, and this false confidence has even prevented them from conducting proper employee background checks. We have a saying at our spa that the easiest fruit to steal from a neighbor’s tree is that which hangs lowest to the ground. Just put it out of your mind.

Lesson #5: Love thy enemy.
Nothing gives more power to your competitor than outright hostility from you. Your exposed anxiety weakens everyone’s confidence that you have faith in the strength of your spa, and this perception can put into motion the idea, no matter how unfounded, that the pasture just might be greener over there. Retain all of your ethical fortitude. Don’t denigrate the new spa. Don’t raid their employees or pay too much to keep your own in place (let them go bankrupt first!). Avoid lowering your prices to undercut the new spa or throwing in more expensive customer perks when you don’t need to. In other words stick to what has worked well for you and then do it even better. In all likelihood the competitor will try not to be the same as you are which will make your uniqueness more appreciable.

Following this formula you’ll probably find that not only will your business continue to grow and prosper but you’ll save yourself a lot counter-productive worry and expense. New spas are risky ventures at best that come without any guarantees of success. You, on the other hand, have already passed the initial test of business survival.

You have experience and operating wisdom that the new spa will have to struggle hard to gain in an even more competitive market than you did. Just be glad it isn’t you, and get some sleep!

Best of luck to you!

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