(rerpinted from July 1, 2013, issue of Skin Inc. magazine)
Addition By Subtraction
By: Allie Hembree
Discounting is a widely debated topic in the professional skin care industry and holds various meanings to different people. To effectively discount, you first must have a plan. Consider the following tips when preparing your retail discounting strategy.
Do it sparingly
Karen Watson, spa director at The Essex Resort and Spa in Essex, Vermont, says, “Discounting can be used in a productive and positive manner as long as it is not done on a regular basis, and is done to fill appointment times that would not normally book. It is important to do it periodically so that clients do not sit and wait for the next deal to come around.”1
Spa Week, which offers a semi-annual and week-long discounting promotion, is one example of the value of periodic discounting. It gives consumers the opportunity to receive a $50 treatment from hundreds of day, medical and resort spas, as well as yoga and Pilates studios, fitness and nutrition centers and other health and wellness practices nationwide. Much of its success can be contributed to the infrequent occurrence of this special promotion.
Consumers respond well to skin care facilities that show a strong dedication to customer service and reward clients for their business. Data from the International SPA Association’s (ISPA) May 2012 Spa Consumer Snapshot Initiative showed that 94.8% of surveyed spa-goers indicated they belonged to at least one type of loyalty reward program, with grocery stores being the most common type of membership. Some of the most preferred benefits of this type of program include cash discounts, coupons and free samples.
Twenty-seven percent of spas in the United States are using daily deal websites, such as Groupon or Living Social, as an online service to increase revenue.2 When employing this online discounting strategy, be sure to have some form of measurement of the offer’s success to help determine whether it should be invested in again.
“My No. 1 concern with using deal-a-day websites is that spa owners and managers are not managing them properly. In order to effectively manage such a deal, a strategy should be implemented,” says Scott Vazinski, executive director of The Spa at Yellow Creek in Akron, Ohio.1 Make sure your team is prepared to handle the increased demand; if not, the discount could backfire.
Customization is key
Thoughtful gestures, such as birthday coupons and offering clients a drink upon arrival, may mean more than you think. Feeling like she is special is essential to a client’s loyalty. Fifty-six percent of spa-goers said they remained loyal to a brand because team members greeted them by name and remembered their preferences.2
Switch it up
It is highly unlikely that the marketing and discounting tactics you are using today will be the same ones you use five years from now. Peter Shehan, founder and CEO of ChangeLabs, said during the general session of the 2012 ISPA Conference & Expo, “When you think of the spa industry, it has had lots of success. That success is the single biggest barrier when trying to go to the next level, because what you have done in the past has worked. What got us here today is not what is going to get us to where we need to get to tomorrow. Do you have the courage to change and not go back to the same old strategies?”
Discounting is a unique method to get new clients in your door, but it is just as important that you are taking care of your returning clients to make it a successful strategy.
D Federspiel, What is Your View on Discounting, Flash Sales or Deal-a-Day Websites?, Pulse 22 32–33 (2012)
http://www.experienceispa.com/education-resources/publications-courses-studies/2012-us-study (Accessed Apr 25, 2013)
Allie Hembree is the public relations manager at ISPA, working with global media outlets as she promotes the visions and messages of the spa industry. She is a frequent contributor to Pulse magazine, the official trade publication of ISPA, and can be reached at firstname.lastname@example.org.