Time to Bulldoze your Salon Spa Concept?
Last year the owners of a large California retail-shopping complex ordered it bulldozed and completely rebuilt.
The remarkable thing about this is that the demolished complex was a still beautiful 20-year-old structure in located in a heavily trafficked commercial hub. But in all those 20 years of leasing and repeated economic swells the center was a stubborn failure. Why? Because the basic design of the complex with its labyrinth-like and confusing layout, and dark, difficult-to-reach upper floors simply tired shoppers of the challenge of doing business there. Lease incentives, free concerts, and massive advertising did little to help tenants survive the drought of customers. It finally made sense to simply destroy the building and replace it with one that a convenience-minded public preferred–a bland but customer-friendly strip mall. The center is now a thriving commercial success, fully leased even before it was completed.
The wisdom here is that it is ultimately better to abandon a money-losing investment rather than lose more money attempting to make it pay off. Each losing month merely adds to the depth that a businessperson must climb back from in order to realize some profit. But many spa and salon owners cling to certain products, services, and build-outs even though they can’t seem to make money from them. They remain focused and attached to the original cost of their investment and can’t bear to toss out the “valuable” feature in question. All the while its cost continues to rise.
Does your spa have a steam shower that gets little use? Did you plan a build a men’s locker room that’s 3 times bigger than you now know it needs to be? Is the juice bar just an employee watering hole? Do the ever-increasing sales of that product line fail to solve your cash shortages?
I know I’ve said this many times in my articles but it must be repeated again; a business has one primary purpose: to make money. Failing this little else will matter unless, of course, you have so much money that your business performs as a hobby or community service only. But that’s doubtful. Everything is secondary to the moneymaking capability of your business because your business will eventually die if it can’t support itself financially. I’m not pointing to sales, the mere bringing in of revenue, but rather the money you get to keep after the business expenses, all of them, have been paid out. Profit. When you take the time to analyze your spa business an interesting story will emerge: most customers buy singular, standard services such as a massage, facial, or nail care. Never mind that you planned and built your spa to deliver service packages, your customers think for themselves, and most don’t have the time or desire to get a regular “day of pampering”. Think about it, how often do you, the owner and chief promoter of day spas, spend the day lounging in one? Most customers are busy people with limited time. They will also most likely use a limited array of spa services no matter how much you pitch them. Sure, they’ll buy the gift certificate for friends and family but these new customer prospects are often unlikely to convert into regular customers, customers with time.
My point is that if you find yourself in a similar situation it might be a good time to make some important changes in the structure of your spa business. I have consulting clients who regularly argue the need to build out more massage and facial rooms while their wet, client consultation, and yoga rooms stand empty most of the time. My reply is to tear out the wasteful space and convert it to meet the service demands they have. But they’re horrified at the idea of discarding that beautifully appointed room everyone claims to love but never uses. There’s this idea that somehow the lonely space in question is partly responsible for the success of the spa as a whole. I say show me the proof of this but the proof never seems to be concretely available. What customers say and what customers do are often very different, and many spa operators really don’t know their customers well. But if you’re tracking your sales numbers carefully you’ll probably see that most of your income is found in single-services with strong retail links. Numbers don’t lie.
Your spa “concept” can become a costly attachment if it, in fact, has little practical meaning or value in the success of your business. What your spa is to you and what it is in practical terms to your customers may differ considerably. And conventional thinking, industry thinking, about what is needed in order for a business to legitimately call itself a spa is a ridiculous preoccupation in light of critical finances and proven customer demand. A lot of time is wasted on this question at trade and association events while many spa operators are looking hat-in-hand for a profitable sales strategy. Your experience may differ but after 10 years of marketing our hydrotub services at Preston Wynne the effort has not proven successful in sustaining client-initiated appointments. It simply makes sense to haul it off and convert the space for massage services that sell well. So next month out it goes. Are we still a legitimate day spa without the tub? Of course we are! Better dry than dead would be a good motto. We’ll still be a luxurious, rejuvenating retreat for face and body services, and better able to remain one in the future. We’ve survived the discontinuation of our nail services, two recessions, the 1989 Loma Prieta earthquake, and growing competition while maintaining a 20% average annual growth over the last 16 years. All this with a shrinking but better planned “concept”. Next on our hit list: those headache-prone spa packages.
It’s not the list of services or the opulence of your facility that will ultimately decide your business success. Rather, it’s the spa operator who best manages the customer experience on the professional level and keenly controls expenses that will be around the longest and the most rewarded financially. Question everything and be one of them!
Best of luck to you!