Marketing: The Ultimate Leverage To Triple Your Spa Revenue (Part 2/6)
Find a Specialization & Niche and Attract Your Target Customer
Hello and welcome back. This is the 2nd part of our series focused on boosting the profitability of your spa through marketing.
In the last installment, we covered some general concepts about marketing and its importance.
Today, we will discuss the first step in any marketing campaign: research your market to identify a niche/specialization and to understand your customers.
Content:
1. Research local market condition
2. Expertise or specialization: what makes your spa unique?
3. Specialization allows you to understand your target customers.
4. How to choose an area of specialization?
Research local market condition
For the purpose of this discussion, we will limit market conditions to include only demographic information, direct and indirect competitors.
Demographics:
Location and demographic data are two major macro economic data that can influence your spa business.
For basic information on a local demographic area, you can get the data from the US census bureau or even Wikipedia. At a minimum, you should know the size of the population in your town and surrounding area. Is the population growing or shrinking, and at what rate?
Dive a little deeper. You should get a breakdown of the age, sex, race and income profiles of the population. When combined with home values in your area, it gives you a glimpse of the socioeconomic profile of people you will be serving.
These data help you gauge the average disposable income of potential clients in your area. Spa services fall into discretionary spending category. In general, your client will spend more if the economy is strong, and cut back if there is a recession.
Direct Competitors:
Find out the number of spas in your area. Combined the number of spas and the demographic information, you can gauge the level of competition.
Dive deeper. Clicking through the web sites of your competitors. At a casual level, pay attention to the font, color, images, and copy of the site. Collectively, what is your impression about your competitors? Do they appear to be professional or amateurish? Next, what services do they provide and what products do they carry? How much do they charge?
Visit competitors social media channels and subscribe to email newsletter. This way, you can get a constant update about any promotions or new services they are providing.
Lastly, if you can, walk by or visit other spas. You will immediately get a sense of the facility and staff. Is the atmosphere calm and soothing? Are the staff motivated, friendly or unresponsive?
All this information will help you to gauge your competition and improve your operation.
Indirect competitors:
Often, we tend to only study competitors in our own narrow category.
However, there are many indirect competitors. These may include plastic surgeons, dermatologists, nail salons, massage parlors, hair salons and other businesses. Money spent in other facilities will force your potential customers to cut back their spending at your spa.
It is important also to keep in mind that these indirect competitors may also be your allies if you can work together. More to come on this topic in a later email.
The research will help you to:
-decide whether or not you want to start or expand your spa in a particular area.
-decide on how much to charge for your service
-predict the profitability of your spa
-come up with a niched or specialized service that will make your spa stand out.
Develop An Expertise or Specialization. What Makes Your Spa Unique?
The spa market can be very competitive. In most cases, spas in a same area tend to deliver the same types of service and sell the same type of products. Without any differentiation, spas are forced to compete on price, which can lead to decreases in margin and profitability.
You need an edge or unique selling proposition (USP) that makes your spa or your aestheticians stand out.
One of the USP can be a specialization in treating a certain skin condition or caring for a specific group of clients.
Here is why:
We live in a world of specialization. If you fall and break your hand, will you go to your family doctor? No, of course not. You go see an orthopedic surgeon. Better yet, you don’t go to any orthopedic surgeon, you go to a hand surgeon because he has expertise in treating on hands.
Now, let us look at another example. If you are getting married and are looking for a photographer, will you settle with any photographer to capture the memories of that special day? No, you will search for a wedding photographer.
Your potential clients are doing the same. They are searching to fulfill a specific need and want at that moment.
For example, let us assume a mom has teenager daughter struggling with mild acne. The mom is seeking care from an aesthetician before seeing a dermatologist as she is worried about antibiotics and other medications that have potential side effects.
Let us imagine you have a special interest and expertise in helping teenagers with acne. On your website, you outlined specific treatment steps, suggested dietary modifications, and had tons of testimonials from other teenage boys and girls who improved under your care.
Who do you think the mom will call first? Will she reach out to your spa or your competitors who have no such specialty?
6 More Advantages In Being Specialized:
-you have operational efficiency.
-you connect better with your clients because you have a deeper understanding about their needs, wants and fears.
-you have advanced knowledge and skills.
-you have higher efficacy and better results.
-you are not a commodity providing me-too service and can charge more for said service
-you can become a local/national authority with the ability to generate free publicity through interviews and speaking engagements.
Specialization Allows You to Truly Understand Your Target Customer
Earning and building trust is one of the key steps to convert a prospective client who is interested in your service, to a customer who paid for your service.
The prospective client has to trust your spa and your aestheticians. If you can understand their hopes, dreams, and fears, then it will ease their concerns and allow them to trust you more. (more to come in later lessons)
Once you develop an expertise and specialization, you will have the experience and knowledge to empathize and share the emotional sentiments of your prospective clients. You can provide details of her fears and desires that convince them you understand and offer the best solution.
How to choose an area of specialization
There are myriads of factors in making this decision. We will categorize them as internal/idealistic vs. external/practical.
Internal/idealistic factors include: your own interest, passion, current level of training and skill. It also includes an intangible factor – does it make you feel happy? For example, do you get a sense of fulfillment when you help teenagers who feel embarrassed and sad by their acne, become confident and happy after you clear their acne? This can be a powerful incentive to pursue this specialization.
External/Practical Factors: Will it pay the bills? Will you have enough clients? How good is the profit margin? Is it really competitive? Let us go back to the acne case. If your market research showed that 85% of people in your area are over 55 years old, then you may have to shelve your passion for treating acne or you need to move your spa to another location. (This is why demographic information is important). Here is another example. You may have only a small interest in lash extensions. If spas in your area do not offer this service, then you should seriously consider learning and perfecting the skills for applying lash extensions.
Ideally, you will find a specialization that will match both the internal and external criteria.
6 potential areas to specialize in:
-caring for people with sensitive skin, eczema, rosacea, and psoriasis
-incorporating herbal holistic approaches in your spa
-combining Asian skincare practices and regimens
-caring for people with a history of cancer
-rejuvenation of a specific body part, e.g, neck or hands
-skin health by combining meditation & nutrition
Case Study: Dr. Wang Herbal Skincare
Background:
A father-and-son team who are dermatologist and acupuncturist founded the company. Their products are natural and holistic, made by combining the best of traditional Chinese medicine and Western science.
Aside from the East +West approach, the company utilizes a patented no-heat formulation process. Heat processing is used in most skincare products on the market, which can destroy active ingredients and make products less effective. In addition, harsh surfactants and emulsifiers are added to those products, which can irritate the skin.
The Nourishing Youth Serum and Radiance Facial Oil from Dr. Wang are created without using heat or harsh surfactants. The patented process also makes the particle size 30,000x smaller, which enhances the absorption profile. The end result is both products are super gentle and very effective.
With this information and other test results, we helped the team to identify their Unique Selling Proposition (USP a.k.a differentiation or specialization) and target customers.
Take a moment and see if you can figure it out their USP
1) USP #1: Patented No heat technology that improves efficacy by preserving active ingredients and enhancing delivery.
Customer Group 1: women who cannot tolerate retinol. Retinol is a tested and popular anti-aging ingredients. However, many women cannot use retinol because they develop redness, peeling, flaking and irritated skin.
Solution: Radiance Facial Oil is a perfect fit for this group of customers. The novel formulation technique allows customers to use retinol without any of the side effects.
Customer Group 2: women with sensitive skin, eczema and rosacea. Many skincare products contain harsh surfactants and emulsifiers, which worsen these conditions
Solution: Both Nourishing Youth Serum and Radiance Facial Oil are free of harsh reagents. It is ideally suited for this second group of clients.
2) USP #2: It is a very simple skincare line with two products that have versatile functions.
Retail Customer: Busy professionals who will not have time for a multi-step skincare regimen.
Solution: Nourishing Youth Serum is a 2-in-1 product. It is a serum and a moisturizer. Both the Oil and Serum are super gentle, and can even be applied to areas around the eyes. In essence, a busy woman with no time can use these two products only, replacing a moisturizer, anti-aging cream, and eye care products, helping saving both time and money for busy women.
In addition to providing USP for retail customers, we also helped the team to focus on potential spas that will be ideal to carry the line. Those include:
-startup spas looking to carry a simple line with a low minimum order volume
-spas with a large number of clients with sensitive skin
-spas that value education and ancillary support.
-spas with a focus in holistic and natural treatment philosophy.
We hope the case study was helpful in guiding you to think about how you can develop an area of specialization and find that matching customer base that will appreciate your offer.
Use the case as a template.
Step 1. Write a summary of about you, your spa, your aestheticians, and type of service you currently provide.
Step 2. Think about what innovative service/products you can implement
Step 3: Can you find any USP or specialization
Step 4. Match the USP or specialization with the customer base.
Before we move onto the next section, we understand your reluctance and hesitation. You may argue that it sounds nice on paper. You may say “I have provided a full service at my spa for a long time, how can I cut back?” Or “I am just starting out. If I only provide one special service, I will turn away many potential clients.”
Those are all valid concerns. Please note we are not advocating for you to cut back all existing services. Instead, we strongly recommend that you develop a few, no more than 3, specializations that can really set you apart from your competitors.
Find Your Niche
If it is too difficult to develop an area of specialization, don’t get discouraged. There are other ways to distinguish your spa. You need a niche with measurable values. These can be speed of service, hours of operation, adjunct services, and payment plan.
Here are 3 examples:
1. One spa owner has a passion for herbal tea. She is a real connoisseur when comes to Chinese herbal tea. In her spa, she serves different teas to match the needs and service for her clients. She even brews a new tea for each changing season. While performing facials, she loves to educate her clients about the unique health and skin benefits associated with tea. Her clients love the special tea ceremony when they visit her spa.
2. One aesthetician was fascinated about the benefits of acupuncture. Although she is not licensed to practice acupuncture, she massages and presses different meridian points on the face and scalp whenever she performs facial treatment. Her clients love that unique service.
3. One spa developed a close relationship with a local dermatologist. Once a year, the spa hosts a live webinar for her clients, and invites the dermatologist to educate her clients. That annual education session is always full.
Summary
Market research is crucial. It allows you to understand the general market condition. More importantly, it helps you to identify a niche or specialization. Develop this mindset -- you cannot and should not be all things to all people. No product or service will fit everyone’s needs. If you create a product or service for everyone, then no one will like it!
By focusing on a special group of people, it allows you to better understand and serve that group.
In the next lesson, we will cover the “Power of advertising with the right message.” You will really see the value of developing a niche and specialization.
While you wait, please take sometime to think about:
-Who is your ideal target market?
How old is she or he?
What is her/his marital status?
What kind of work does she/he do?
What is her/his view point on religion & politics? Yes all the taboo subjects, but you need to know.
What are their wants and needs? Yes, wants and needs are different we will explain later.
What is her/his hopes/dreams/fears?
What are your competitors doing?
What services are they providing?
How many staff do they have?
How much do they charge?
What can you learn from their web site, Facebook, Instagram and emails? Have you seen their facility? Is it special? Does it wow you?
What will be your specialization or niche?
Go back to the case study and other suggestions to find inspiration.
Good luck in working through these questions. See you in a few days