Spa Update: Canyon Ranch Living, Liquidrom Spa, NY Times Article on Spa Facials, and an "I Need a Spa!" Marketing Campaign

Susie Ellis, SpaFinder Insider

I am behind on my blogging, with several topics piling up. I think it is the same problem everyone is facing...lots to do, limited time and feeling extra pressure because of the current focus on economic challenges. So I thought I would try something new: A short recap of four topics (that could each be their own blog) and my “bottom line” observations for each.

Canyon Ranch Living: Visited this new spa lifestyle real estate project that just opened in Miami. I was impressed with the size, style, and staff. It was more than I expected, with the full Canyon Ranch program integrated into this new setting. There are two towers where you can buy residences and one tower that is like a hotel. One of the towers is almost “sold out” and the other is around 25% sold I was told. Bottom Line: I like the concept very much. It just needs one thing - time. Time to increase occupancy and time for people to truly "get it" about this new living option.

Liquidrom: While in Berlin, Nicholas, my stepson, and I went to the famous Liquidrom where you float in a darkened space in warm salt water with music you can hear underwater. There are saunas, steams, cold foot baths, an outdoor Jacuzzi, a bar with fresh fruit, smoothies and snacks, and a few massage rooms. I literally fell asleep in the floating pool propped up by floating noodles. Our massages were excellent. (German therapists are highly trained.) Bottom Line: We both liked our experience. This seems to be a very successful business model similar to others I have blogged about including Centre Parc in the UK; Castle Spa, the Korean fun house in Queens; and Glen Ivy Hot Springs in CA. These places present hydro and thermal experiences as the primary focus and make good money by having volume attendance. They also provide a valuable wellness experience. 500 – 1000 people per day pencils out, even if few take treatments.

NY Times Article, "An Expression of Doubt About Facials": The same old saw: Doctors saying that facials are overpriced and spa therapists quoted as saying something that doesn't sound very intelligent. And then a side bar talking about what dermatologists consider valuable. (They mentioned exfoliation, microdermabraion, peels and extractions - the very things aestheticians at spas do!) Three things need to change in my opinion: 1) Aestheticians and spa professionals need to become more educated about terminology and research. They need to become more confident about the value of what they do. 2) Doctors would be well served to think of spa professionals as partners instead of adversaries. Spas do a lot to help people relax and de-stress, exercise, eat more healthfully, take care of their skin, wear sunscreen, etc. In fact, spas are places providing the very behavioral change doctors recommend to their clients. 3) Media would do well to realize that doctors have an invested interest in criticizing spa professionals, as many feel that spas might take away from their dermatology business. Bottom Line: Spas and medical practices are both important. Neither needs to discount the other and the media would be better served to take a more knowledgeable position these days. The consumer is way ahead of this old story.

"I need a spa:" This is a phrase we seem to be hearing (and saying) more often. In fact, Steve Kane, our Senior VP of Gift Sales, suggested we look at this phrase for our next marketing campaign and spread it out to our entire network of spas. He was inspired by what had happened to him that morning. A woman he knows was in a mad dash to make the train he takes into the city daily. Huffing and puffing she ran by him saying, “Boy, I need a spa.” Bottom Line: That pretty much says it all.
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(....this is the second time I am posting "Retail Sales at Spas are Good for the Customer and the Spa")
by Susie Ellis

I posted the Retail Sales post which follows last week and soon after the post went live, I received an email from someone suggesting that it wasn't a good idea for me to post it because spa consumers - not just spa industry professionals - might read it. In the post I was talking about the importance of retail sales for a spa's bottom line. Since I was rather busy and didn't have time to reread my blog to consider editing it, I asked my assistant just to pull it for now until I could take another look...which I did this morning. And have decided....I am posting it as is.

One thing I have learned about blogs is that truth is what people want. Trying to "look a certain way," "sell," or "promote" isn't what blogs are about. My blog is just a place for me to share my views, my feelings, my ideas....and given that I have been in the spa industry for 30 years, have a passion for it, have visited a lot of spas, have run my own spas and businesses and am in the loop on most spa happenings around the world, well, I guess some people feel that my thoughts are interesting and maybe even useful to them - both consumers and spa professionals. So I don't really think much about who the audience is but rather just write "top of mind" as someone suggested I do when I began. Blogs generally find their audience over time and I don't consider it my job to try and widen my blog's appeal. My job is to be transparent and truthful.

Regarding spa consumers...I have come to have a great deal of respect for them. They are bright, savvy people. Gary Walther, the editor in chief of Luxury SpaFinder Magazine, taught me this. He writes to his audience with a high level of respect and admiration. He doesn't "speak down" or treat an audience as if they are youngsters. I have really liked that approach.

Therefore, it seems just fine to me for spa consumers to learn that a spa needs to have retail sales in order to make a profit and keep prices of services reasonable. Since consumers are buying products (especially skin care products) somewhere anyway, there is nothing wrong with asking them to please buy them from us. Intuitively spa-goers know that when a trained aesthetician spends at least an hour working with a client's skin - and has trained extensively on whatever spa product brand they are using - it isn't such a bad idea to follow their advice. It seems more reasonable to me than going with what a salesperson at a department store recommends after a 2 minute conversation. And yes, aestheticians often get a percentage of the sale (usually around 10%) but consumers know that when they buy things like clothes, electronics, cars, etc. that the salesperson is likely to receive a commission. Well, it's the same thing for many spa product sales.

So....for the second time now, I am going to hit the "publish post" button and hope you don't mind the transparency.

Retail Sales at Spas are Good for the Customer and the Spa
by Susie Ellis

From my notes at the recent ISPA conference re the 2007 Spa Industry research study results: Retail Purchase Effect on Retention

• 0 spa products bought = 40% customer return rate
• 1 spa product bought = 70% customer return rate
• 2 spa products bought = 80% customer return rate

I thought wow! What a great thing to know…and what a smart thing for spas to teach their staff! This information should be spread across the spa world like wildfire.

Intuitively it makes sense that when a client purchases a product at a spa, it means they had confidence in the spa and will now stay more connected since the product will remind them of the spa every time they use it at home. It is also very possible that whatever products were bought (skin care in which the customer has been educated is the number one seller) has given them good results which brings them back to the spa.

Attaining a 70% or 80% return rate at a spa is no small feat. As we know in business, it is less expensive to get customers to come back than to attract new customers. And doing so by establishing a relationship through a product is a very positive way to do that. Spa therapists in particular will find this motivating since they do want to have repeat clientele. Even if they are not oriented toward product sales, they do want to see a client come in regularly, improve their skin, stress level, etc. And this is one very tangible way to do so.

When I later purchased the ISPA study, I could not find those statistics in there. Perhaps I missed it, or perhaps they are published somewhere else in an earlier study? At any rate, I thought these numbers were important findings and worth passing on. So spread the word!

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if you wish to be put on a list that automatically sends my blog posts to your email, just let dulcy.gregory@spafinder.com know and she will add you to that list. Thanks so much!

Creative Ideas to Re Energizer a Day Spa: Budget Massages, Express Massages, Yoga & Spa, Medical & Spa, etc.
by Susie Ellis

OK...one last blog about the recent research data and then on to more fun things...like meeting Chrisina Ong last night at a cocktail party at Donna Karan's....but first:

Let's take one last look at the S curve with emergent, growth, maturity, and decline phases for the spa industry. (Check previous blogs if you want to see the graphs.) Here is the key point - our spa industry as a whole is definitely not in a mature phase where there is a leveling off of the entire industry. In fact we are seeing a great deal of growth in many of the segments especially in the medical spa, spa lifestyle real estate, and in the resort/hotel sectors.

I do think that when you look at traditional stand-alone day spas we are beginning to see flattening and it is becoming harder for them to make profits. The huge increase in the numbers of day spas has saturated some markets and now many traditional day spas are facing large numbers of competitors. These competitors include other day spas, resort, and hotel spas which are open to day guests (almost all of them), medical spas, and some new players like the highly discounted "no-frills" establishments, fitness clubs adding better spas, etc.

Critical point.....day spas that are facing this reality need to think about ways to begin a new S curve to breathe new life into their businesses. Here are some possibilities:

1. Narrow your focus and specialize in something that has growth opportunity and less competition.
2. Expand your offerings to include a segment which is in the growth phase.
3. Partner with someone (inside or outside of the spa industry) who is in the growth phase.
4. Turn the business over by selling it or even giving it away to someone who has the resources, energy, and vision to grow it again in new ways.

Here are some ideas of industry aspects that are more likely to be in a growth phase, which if incorporated properly, might help jump-start a flattening day spa:

• Express Services


• Budget Massages


• Budget Facial Treatments


• Mobile Spa


• Baby Spa


• All Men


• Party Spas


• Ayurvedic Focus


• Tween Focus


• Mobile Services


• Fitness Services (Yoga, Core, Pilates, etc.)


• Luxury Level


• Squeaky Clean Facility


• Medical Spas (the greatest opportunity might be here)


• etc.

Think of businesses outside of the spa industry that have made some changes which started a new S curve and thus re-energized their businesses:

Dunkin' Donuts began emphasizing lattes instead of their donuts.

Airlines that were threatened by the new low-cost airlines slashed their prices and then got creative to keep their customers.

McDonalds added playgrounds.

Movie theaters began letting you order tickets online.

Travel agents threatened with competition from online discounters began improving their service and changed their fee model.

I am sure you can think of other examples...in fact let us know by clicking on "Comments" and sharing them with us. This is a good time for us to help each other out with business ideas as it helps our entire industry to have strong healthy profitable businesses out there.

The destination spa, day spa, resort spa, medical spa and spa lifestyle real estate categories. Where they fall on the S-Curve.
by Susie Ellis

OK, let’s talk about where we think the spa industry falls along the S-Curve. (see previous post for a graph) To start with, let’s look at some of the different spa segments individually. Remember this is somewhat subjective and as pointed out by Rob Millard, it becomes clearer in retrospect. Here is how I see it today from my vantage point:

Spa Lifestyle Real Estate -- Emergent Phase
Medical Spas -- Growth Phase
Resort Spas -- Growth Phase
Day Spas -- Growth/Maturity Phase
Destination Spas -- Maturity/Decline Phase

Tomorrow I will share with you some of the reasons why I think these phases apply and most importantly talk about how maturity can spawn a new S-Curve which brings with it new opportunities at an even higher and possibly even more profitable level!

It’s rare to hit a home run the first time at bat, but that's what happened at our first Aspen Spa Day. The plan was to add on an extra day to the Aspen Center for Integral Health’s (ACIH) Healthy Gourmet Food Festival in which we have participated for the past two years. This extra day would be called Aspen Spa Day and it was the vision of Sallie Fraenkel, our Spa Finder COO.

The idea was to invite a variety of Luxury Spa Finder advertisers to join us as exhibitors in a large white tent in the middle of Aspen on a busy summer weekend – and invite the public to join us for all the spa-related festivities. They would be able to walk through the tent sampling various spa treatments and spa food. It was a match made in heaven, Aspenites (who are affluent, into health and wellness, and love to travel) are the perfect match for our Luxury Spa Finder partners. We were hoping for 1,000 people, but had more than twice that many people, some of whom even flew in from other states. The buzz was so extraordinary that we think the tent needs to be twice as big next year! All the Spa Finder staff who attended (there were 8 of us) are walking around the office today with big smiles and fun stories - and maybe a bit tired from the return trip which got us into New York very late last evening.