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Don’t send a “theme” to do a Vision’s job

Successful business visions must be built to last. Whether your company is a startup or you are repositioning an existing business for future growth, the last thing you want to do is create a “theme” when you actually need a vision. While this has always been true, during this recession the need for a powerful and unifying vision has never been greater.

So what’s the difference between a theme and a vision? A theme is superficial at best, and vulnerable to whims and frequent changes of direction. Themes are bright, shiny objects that may briefly attract attention. Visions inspire your guests as well as your internal customers–your employees and other vital stakeholders in the organization.

Visions can’t be created by outsiders, no matter how talented a consultant is. A vision is an organic expression of the shared creativity and dreams of the people within the enterprise.

However, there is a process that ensures that your vision can be birthed and articulated. It’s called a Strategic Vision Session.

“Oh, brainstorming,” you say. “We did that.”

Brainstorming is just one step in the Strategic Vision process–an important one. But what comes before the brainstorming dictates the quality of the brainstorming session. Have you planted the right seeds? That storm may be watering the wrong crop.

What comes after brainstorming determines whether that deluge of creativity can be channeled into appropriate action. Which will benefit your crop more, a flash flood or an irrigation system?

An SVS includes a progression of specific processes, each one building upon the last. It begins by helping the group articulate the current reality and “conditions on the ground,” as well as the organization’s strengths and potential threats to its success. The outside facilitator helps participants get past habitual thinking and enables them to overcome roadblocks and even taboos. A good facilitator orchestrates participation from the group, preventing stronger contributors from dominating the session, and bringing out the creativity and insights of less-bold individuals.

Whether you’re a new spa, a turnaround project, or even a vendor, a Strategic Vision Session ensures that your efforts will not be forgotten with the press release. The product of an SVS is a Vision Brief, which guides the work of the entire team, across every function. Because it is co-created by your team as well as skilled facilitators, everyone has a stake in the outcome. It’s not “his idea” or “her idea,” but “our ideas,” powerful, distilled concepts that represent the DNA of the business. A Strategic Vision is not just the flavor of the month.

You may be surprised at who makes profound contributions to a new vision. We were in a session for a relaunching hotel spa in which the head chef made one of the most remarkable and powerful contributions of the entire day, something that grew into one of the key vision elements. This is why we insist that companies include as many of their stakeholders as possible. This usually annoys them–it’s not convenient to pull people away from their work for a day or even two (larger groups usually require longer sessions.) Sometimes more powerful players don’t see the value of including representative (or all) frontline employees. But the more participants, and the more time committed, the richer the outcome. The work that’s done during this period can guide a company for years, not months. It’s well worth the effort.

In new and relaunching spas, the Vision Brief guides the work of everyone from architects to marketers to hiring managers who choose the therapists and support staff. Everyone, literally, is on the same page, but they’re expressing the Vision through their particular function. The Vision touchstone is the place to return when conflicts or confusion arise about priorities, because that happens in all projects. At that point, the parties involved pull up their copy of the Vision Brief and looks for a way forward that honors the work that has been done together.

Not surprisingly, the Strategic Vision Process is one of the most satisfying and morale-boosting experiences employees will have in a company. Nothing creates ownership like participating in the birth of an organization’s vision. An SVP  doesn’t always include an entire organization; it can be done for a group or team. We’ve just found that the more people involved, the better the quality of the output, and the more people with a serious stake in the outcome.

Not to mention, the more fun it is.

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The Voodoo Reviews Do, Part Two

“Search” and “Review” got married a couple of years ago, and “Searchiew” (Gesundheit!) is the new normal. Consumers don’t have to look for reviews any more–they’re everywhere. And the more reviews there are, the better it is for everyone–because accuracy increases when the sample is larger. It’s true that only a handful of customers have ever written a review, and only a fingerful write regular reviewers (like “elite” level Yelpers, who are chosen not just for frequent reviews but for being “tastemakers” and participating actively in the Yelp “community”.)

Review fatigue is a problem however; reviews are everywhere and so are solicitations to provide feedback. This has probably had a dampening effect on those of us who write reviews for the stuff we feel passionate about, but aren’t inclined to write about the local carwash, like those elite Yelpers–who seem to have an awful lot of time on their hands.

Despite our review-centric society, many spa operators have not figured out how to harness the power of sites like Yelp, TripAdvisor and Google+. They’re still burying their heads in the sand, pretending that every bad review is fake, or arguing with customers online.

Here are the key points to remember:

1. Yes, some reviews are fake, or unreasonable. Get over it. Most consumers have read enough reviews to spot (and disregard) the haters.

2. An unhappy client who writes a review is no different than an unhappy client standing at your front desk complaining. Respond with compassion, respect and gratitude (yes, gratitude: only one out of ten people who has the same negative experience will ever tell you about it. They are the canaries in your coal mine.)

3. Don’t just respond to negative reviews online, respond to positive ones, too. (“I’m so glad you enjoyed your facial with Tiffany! We think she’s pretty special too, and it’s inspiring to receive such kind words.”) This shows that you’re engaging with your community rather than just performing damage control.

4. Print, post and share your positive reviews with your team. We put them in the staff break area in a fun, themed display that changes every month or so. This keeps reviews top of mind for your team, too. Sometimes they forget that their actions can have a very public reaction.

5. When someone has a poor service experience at your spa, the number one priority: Bring ‘em back! Get them in for the same service (if they’re willing; maybe you’ll never get to touch their brows again for botching their waxing, but they might be willing to have a pedicure.) Don’t ever suggest, ask, or demand that someone revise a review as a consequence of a do-over. Yelp is filled with outraged comments by reviewers who felt they were being “bribed” or even pressured to update or remove negative reviews. Remember, just like a complaining guest at the front desk! You wouldn’t demand that they return home to tell their family, friends and neighbors that you’re actually awesome, after all. Do the right thing, and generally they will, too.

6. Don’t waste money on cheesy “reputation management” companies that create reputation-spam, the Cheez-Whiz of the online review world, which any consumer can spot in about two seconds. Some of these companies rely on cheese-bots to generate (sometimes barely intelligible) copious positive reviews, which dilute and push down the baddies. Don’t embarrass yourself. Generally speaking, “reputation management” companies don’t have good reputations and can be very expensive to boot.

7. Inviting customers to write reviews is crucial to understanding just how well you’re doing. However, it’s important that you ask the right people to do this. Inviting non-reviewers to post on Yelp has, as most of us know, very limited impact. If they are not already a Yelper, that new account and single review is the algorithmic kiss of death; their warm words will disappear into the abyss  in 90 days or less. DemandForce generates “certified” user reviews following appointments that unfortunately largely go unseen and unfelt by non-customers. However, as a tool for managing customer relationships it’s still valuable and its suite of services includes much more than the review site. Customers are given a chance to provide private and public feedback. For example, on DemandForce Preston Wynne Spa has a 95.5% average approval rating, compared to 80% (four out of five stars) on Yelp, with close to ten times the number of reviews. At the time we signed up, Google was aggregating reviews. They have now plunged into the review market with Google+, and unfortunately this has made Google a less-useful reviewing tool for the time being. However, it is growing. Trackback, Inc., is a monthly subscription service that helps you you generate feedback from legitimate customers (using a contest as an incentive) and then distributes it in the form of new reviews to influential sites like Yelp and TripAdvisor. They have a clever way of inviting the Yelpers in your clientele to share their thoughts, making it oh-so-easy by providing a clever cut-and-paste interface. Love that.

8. Review sites provide rich and nutritious search engine food. They increase your website’s rankings. They drive people to your website for more information.

9. Searchiew drives customers into your business. Mobile apps like Yelp’s can deliver last minute business to spas thirsty for it. If you spend a lot of time worrying about yield management, spend some of that precious time brainstorming some smart Yelp “check in” goodies.

It’s time we all grew up and accepted that review sites do far more good than harm for a quality spa that is well managed!

 

 

 

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The Agent in Red

Last month I had the pleasure of participating in “Creating Raves,” a three day customer service intensive put on by Hospitality Quotient, the consulting and training arm of Union Square Hospitality Group. I’ve been an admirer of the company and founder Danny Meyer since the publication of his book, “Setting the Table,” which I think is the best book on customer service ever written. Creating Raves was customer service fantasy camp–three great days that were spent both in the classroom and in USHG’s restaurants, observing the company’s culture up close. It was exciting to see the core principles from the book in action, to learn from some of the company’s general managers, and from the Man himself!

One of my favorite concepts from the book and the workshop is that of “being on the guest’s side,” acting as their “agent” rather than a “gatekeeper.” This is one of the distinctions that Meyer makes so brilliantly, making his philosophy actionable–and teachable.

Even when a customer service professional is well-trained, the “gatekeeper” role may still be played–just more politely. It’s so easy to slip into, even–and it might be argued, especially–for employees who are highly competent. Just keeping the “on their side” mantra in mind shifts your sensibility in a subtle but powerful way. For example, when a guest calls for a massage and can’t get in, a spa reservationist will offer that guest the opportunity to be on the waiting list, and also express their hope that they can get in, after all. It’s just a matter of anticipating how that person is going to feel, and coming from a place of empathy.

Instead, many requests that can’t be fulfilled will conclude with a dead end. “My apologies,” the scrupulously polite gatekeeper says. “We are fully committed that day.” End of story!

One of my best experiences with an “agent” on this trip to New York occurred in the Rose Bar of the Gramercy Park Hotel, one of Ian Schrager’s famously sultry rooms into which a non-Beautiful Person wanders at their peril. I was tired but not quite ready for bed, and craving…chamomile tea. An exquisite cocktail waitress–a tall blonde sylph in a crimson jersey dress–approached me.

“Do you have chamomile tea?” I asked, noting that the tie-loosened Suits playing pool near me were quaffing martinis. I was ready for aloof scorn or even consternation (“Um, I guess I could get that from the restaurant.”)

No, she was an agent.

“Sure!” she gushed enthusiastically, as if she was thoroughly delighted that someone was not ordering a cocktail, for a change. When she returned with my tea, she brought me an enormous thermal carafe of hot water, and two tea bags, which saved both her and I the trouble of refills, and I sat on a velvet sofa like the grandma I am and contentedly listened to some fantastic live jazz. When it was time to leave, my server refused to charge me.

In a guest experience, each little “moment of truth” has the potential to become a disappointment…or a happy memory. I was expecting nothing more than tolerance, and I received enthusiasm instead.  This friendly young woman did more than just fill an order (or, for that matter, comp a pot of tea). By letting me know that she was “on my side,” she made me feel welcome, and that I belonged. (And now I’m telling you about it!)

“How’s that tea treating you, dear?” called the band leader, between songs.

I gave him a big thumbs up, thanks to my “agent” in red. And two nights later, I was back, this time for Champagne.

 

 

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New Year’s Resolution #1: Increase your gross profit in 2014

As we put the recession in our rear view mirror, the spa operators we know have pruned all the dead wood they can from spa overhead. The few tweaks we made at our own Preston Wynne spa in 2013–getting rid of excessive back office space, flattening our organization some more–will certainly help us out in 2014.

But real progress has to come on the “middle line,” gross profit, where there is still leverage.

Here are three key moves to increase gross profit:

1. Increase prices

This doesn’t have to mean an across-the-board price increase, but it can mean adding more high-end services to your menu…especially if you’ve had to reduce prices through discounting for less differentiated, entry-level services. Now that discounting has become the expectation, you may have to set your “rack rates” higher, just as hotels do, to enable you to provide a range of price points that fluctuate with demand.

Do clients push back at your prices? If you rarely get push back, it’s likely your prices aren’t high enough. And just because someone asks about a discount, it doesn’t mean your prices are too high. That is the new “consumer entitlement” that’s been created by companies like Groupon. Listening to your customers is important. Hopefully you closely monitor reviews (and actively solicit them). This is the most likely venue for commentary on your pricing. As well, searching social media for mentions of your company may turn up themes, like “expensive, but worth it.”

There has to be a “quid pro quo” for reduced prices, and that’s loyalty. (Sorry, Groupon! You’ve created a monster: the itinerant, discount-blood-sucking consumer who wears their utter lack of loyalty like a badge of honor.) Membership programs can actually help you improve gross profit dollars by stabilizing demand.

2. Sell more profitable retail products

Many vendors cut customer service during the recession, forcing spas to become more self-sufficient as retailers. That makes private label value proposition more appealing. Spas already know how to “go it alone.” I’m fascinated by the industry convention of setting wholesale prices and MSRP in such a way that spas only receive a 50% gross profit. No other industry with this type of gross margin also has a punishing 10% sales commission as a “tradition,” too!

The gross margin on the typical branded product in a typical spa is 40%. I don’t know any spas whose overhead is 40% of revenues these days.

After years of being forced by the marketplace to discount their services, a lot more spas are grumbling about this somehow sacrosanct industry “tradition.” Private branding is the answer to “how can I realize a better profit on my retail sales?”

3. Revisit your incentive programs

Many spas are still paying commissions that are simply not sustainable. It’s not easy to re-tool a commission or incentive plan, but it may be unavoidable.

Kids, don’t try this at home! A comp conversion is fraught with emotion and the potential for staff loss is high. Engage a spa consultant who understands not just how to design a program but help you “sell” it to your staff. That individual can play “bad cop” to the spa owner’s “good cop,” as the new program is rolled out. We also recommend enlisting your team’s “thought leaders” in an informal task force to help you implement the program. Simply handing it down from on high probably won’t work.

Remember, as you consider the moves that will give you the best return, gross margin is something you can control more readily than overhead. You can make a decision to change vendors or prices and implement it quickly. Fixing a dysfunctional compensation plan is a bold move that can revive a struggling business.

Keep your neatly-pruned overhead in check and resist the temptation to “relax” as revenue improves. Don’t take off your “financial Spanx.” If you stay strong, those additional points of gross profit will create dramatically better financial outcomes for your spa in the New Year.

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Do what you love and…what happens?

As spa consultants, we spend a lot of time talking to clients about their dreams and vision for new spas. Not surprisingly, a lot of people who love spa-going believe that becoming a spa owner is their destiny.

We meet many impassioned would-be spa owners, but not all of them have the skills, knowledge and emotional intelligence to be successful spa entrepreneurs. Even businesspeople who’ve been successful in other industries frequently have a hard time making their skillsets “translate” to the spa world.

Most of us are familiar with the story of the talented home chef who believes that opening a restaurant is the logical evolution of their gift. But turning your passion into a business isn’t always a recipe for success. This great article from the Wall Street Journal explains why something that seems “meant to be,” is often better left as an avocation.

In our Spa Director’s course, in the financial management module, we tell our students that the phrase, “Do what you love and the money comes…” should continue, “…keep doing it and the money goes.” Love is not enough to create a sound business. Even robust sales are no guarantee of profitability, especially for stand-alone spas.

Creating a good business is lot like creating a good marriage. Passion may be an essential ingredient, but a relationship that is mostly about passion rarely lasts. This fascinating short video about the Sara Blakely, founder of Spanx and the world’s youngest female billionare, demonstrates that passion is sometimes where you find it. Blakely set out to become an attorney, but failed. Her company was Plan B.

Falling in love with a great idea, as Blakely has demonstrated, can be a more successful path than building a business around your love.

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Join Lisa Starr in South Africa for the High Performance Spa Workshop.

 

Wynne Businesss spa management education returns to South Africa this summer. Wynne Business’ Lisa Starr, Les Nouvelles Esthetiques, and TUV Rheinland are teaming up to present this information-packed, advanced spa management training course, presented in Johannesburg after the Spa Conference 2013. A one-day, abridged course is being offered in Capetown, an ideal program for supervisors you’d like to train, too.

Complete our online spa management course online, at your own pace.

Can’t make our South African program? Complete our Spa Director’s Management Intensive online, at your own pace.

South Africa’s rapidly growing spa industry requires attention to detail in every aspect.  Our training programs will give you the tools you need to improve your spa’s performance and profitability. They also provide a valuable networking opportunity.

Topics covered in both sessions will include:

* Advanced Financial & Operations Management
* Spa Marketing Concepts and Tactics
* Quality Management Best Practices
* Optimized Retailing
* Human Resource Strategies to Retain Top Talent
* Developing your Leadership Vision & Strategies 

 

 

 

New this year:

Catch the abridged course on July 25th, 9a-5p, in Capetown!

Admission:

Johannesburg:

R 3600.00 SA Spa Association Members

R 4200.00 Non-members

Capetown:

R 2400.00 SA Spa Association Members

R 3000.00 Non-members

Admission includes lunch and tea breaks as well as your course text, a valuable reference tool you’ll use repeatedly. Attendees will also receive a certificate of completion.

Locations:

Les Nouvelles Esthetiques Conference Room, Craighall Park, Johannesburg

TUV Rheinland Corporate Offices, Century City, Capetown (Abridged Course)

To REGISTER, or for more information on the “High Performance Spa Workshop,” contact Les Nouvelles Esthetiques on 011 447 9959 or e-mail:

info@lesnouvelles.co.za

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Lisa Starr’s latest Global Spa Trends presentation from her recent appearance at the SpaTec conference is available as a pdf on the Wynne Business website. Browse the zillions of images she’s included and you might just get your next big idea!

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Lessons in Hospitality

Last week, I went to an hour-long Hospitality Fantasy Camp (well, that’s what it was for me!) I attended a cooking demonstration and “conversation” with Danny Meyer and Carmen Quagliata of the Union Square Cafe in New York, at the Pebble Beach Food and Wine Festival.

Meyer is the author of the best book on hospitality ever written, Setting The Table, The Transforming Power of Hospitality in Business. It’s on the syllabus for our three day management seminar, The Spa Director’s Management Intensive. It shares a straightforward and easy-to-apply philosophy that is every bit as relevant to the spa world as the restaurant world. In fact, it’s relevant for any business with employees and customers.

I’m pretty sure I was the only person in that audience that morning at the Spanish Bay Resort who was there to pick up management tips, not pasta-cooking tips. (I got those, too–I’ve been over-stirring my pasta and using over-salted water!) At ten o’clock in the morning, the ladies sitting next to me were already happily quaffing glasses of chilled Chardonnay handed out by event staff.

The new cookbook they’ve collaborated on is called Family Table. It’s based on the type of recipes served for a restaurant’s “family meal,” the meal that a restaurant staff eats before service. Family Meal is a humble, hearty affair which utilizes ingredients that are still good but not ready for prime time in the dining room. Meyer believes that when his employees are nourished with a good meal (not fancy, but prepared with love and gratitude) they can, in turn, give good service to customers. Meyer’s Union Square Hospitality Group, which operates more than a dozen restaurants in New York, practices a form of hospitality management which puts employees first.

The concept of the Family Meal really struck me as I was listening to the affable give-and-take between Meyer and Quagliata during the cooking demo. There was something almost spiritual in the way they described this time-honored ritual of sharing food before work.

I wondered, what is the spa industry’s version of the Family Meal?

What do we do on a daily basis, prior to sending our team into the spa to help our guests feel great?

In our spa, we have a pre-shift “huddle.” It focuses on sharing information about the day’s schedule, including anomalies, updates. It’s operational.  In fact, it’s transactional. Huddle is when we distribute the cash tips collected by our front desk team. A lot of restaurants do a huddle too: it’s called the “lineup.” (Kind of scary-sounding, isn’t it?)

Inspired by this session, I’m brainstorming ways to upgrade our huddles:

Ideas I’m considering:

  • Family Snack: something healthy, changing daily, at the break table.
  • Mini chair massage before shift. 3-5 minutes per person.
  • An employee-led routine of stretching, warmups and grounding

Studies tell us that guests are not loyal until they’ve been “emotionally satisfied” by their experience with your business. Emotional satisfaction is much easier to create when you’re experiencing it yourself.

Let’s say you’re a massage therapist at a spa. You drive (or bike, or walk) to work, probably not thinking about what you’re about to do, but about all the other things you have to do, and can’t. You come into the spa, most likely through an entrance not used by guests, and prepare for your shift: gather linens, restock supplies, set up your table. You’re probably hustling to get it done in time to greet your first guest.

When do you get into the spa mindset? Probably about the time your hands first touch your client.

If the “family meal” is about nourishing a restaurant staff, the equivalent would be “practicing what we preach” with our team. How better to get our staff members into the spa mindset than by sharing a little bit of it with them?

Demonstrating and sharing self-care just may be the “family meal” of the spa industry.

 

 

 

 

 

 

 

 

 

 

 

 

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New York Gift Show Wrap-up from Lisa Starr

In her latest blog for Booker.com, Wynne Business spa consultant Lisa Starr prowls the New York Gift Show for goodies to goose your retail sales this spring and summer.

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Self-inflicted wounds: More dangers in “conventional wisdom” on discounting

by Lisa Starr

Ever since WWII, Americans have been in love with the idea of discounts. For many people the thrill of getting something for less than the advertised price overshadows the actual acquisition (or at least for people who are focused on price, rather than quality). Our recent economic situation created a new iteration of discount strategy: the membership program. No finer example of this exists in the spa industry than Massage Envy, and with over 700 locations, each reputedly grossing over a million dollars a year, it’s still growing. Volume like that inspires a lot of wannabe businesses hoping to cash in on this concept, but I think the Massage Envy ship has already sailed. Not that you can’t have a discount membership program at your spa, but building an entire business around this concept has already been done, and done well.

Peggy Wynne comments: The other major consideration about establishing a membership model: if it doesn’t work well for you, “stopping” it is next to impossible without angering a lot of customers. Think about it carefully and look at a variety of models.

One of the simplest we’ve seen was a membership whose sole perk was a discount. The spa sold a 20% discount privilege on services for $20 per month. While on the face of it that seems much too generous, how many of your guests diligently come once a month and spend an average of $100? That’s the minimum spend if a client is going to break even on their membership. Depending on your price point, that might not be a workable model, but when you look at average monthly spending, you may be surprised at how much this has slipped in the last ten years. Your membership might need to be $30 a month, which still sounds like a deal to a power user. And yes, some clients will overuse it. That’s the whole idea…the health club model. A handful overuse it, but most people underutilize it.

Certain industries have ingrained the discount message into consumers; just look at what is happening at department store JCPenney. JCPenney hired the innovative executive Ron Johnson, the former Sr. V.P. of Retailing for Apple, to be the CEO last fall. Johnson created one of the highest sales-per-square-foot environments in the retail world at Apple, and JCPenney felt like it needed some innovation. Johnson’s plan for JCPenney upended its standard discount and coupon-driven mantle, and focuses on providing everyday low prices and value, and staying away from the “sale” word. Turns out, folks that shop at JCPenney like prowling the aisles for deals, and they’ve been staying away from the store in droves. Whether this experiment to transform the company and its reputation will be successful or not is yet to be determined, but I give Johnson credit for bravery. I’m guessing it’s going to take more than just a few months to retrain the consumer on JCPenney’s new value proposition. Why? Humans are creatures of habit.

So what does this mean for spas? It means we need to be very careful about the message and image we convey to our target audience. If we start training guests that our prices are as malleable as they are at department stores, we risk beginning a dangerous downward spiral. Consider this interesting article, “Customers Will Pay More For Less,” by Alexander Chernev, in Harvard Business Review, in which two researchers discovered that consumers were willing to pay more for two separate items than they were willing to pay when the items were bundled together. For instance, people were willing to spend $225 and $54, respectively, on two pieces of luggage when purchased separately, but when they were bundled together, consumers were only willing to pay $165! The reason is attributed to a thought process called categorical reasoning, and can be seen particularly when an expensive item is bundled with a less-expensive one. If you create special offers that pair higher-priced spa services with less expensive ones, you may be devaluing both of them in the eyes of the consumer. Be strategic and consistent with your pricing, and you won’t run the risk of thoroughly confusing the consumer about your true value proposition.

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