Why estheticians don't sell
July 13th, 2007 • Posted by Seth Gardenswartz • Permalink
Thanks for all of your feedback on our product "project." Many of you have posted responses on this blog and others have emailed or spoken to us directly. There is tons of good information to extract, but today I want to focus on one topic; the awkward relationship between estheticians and product sales.
Many spa owners report a consistent discomfort on the part of their staff when it comes to selling products. This challenge hurts two groups of people; the people who work in spas and the clients of spas. It hurts spa owners and employees because the spas make less money. After all, a spa has only so many treatment rooms, with so many potential treatments to sell in a day. However, product sales are not bound by the same set of limitations. Less money for a spa means less money for spa improvements, staff and salaries.
Perhaps more importantly, the spa clients are not well served when the person in the best position to recommend a product to a client resists doing so. Why? More importantly, how can we change this perception? One theory is that "sales" is too crass a process for professionals accustomed to providing treatments. Much like the mechanical and required "would you like fries with that," some professionals feel uncomfortable initiating a discussion about product. Another is that the personality types that make up the majority of estheticians are somehow incompatible with product sales.
Another theory is related to the fact that spas are for passionate people and by passionate people. In the movie High Fidelity an independent record store is staffed by extremely knowledgeable and passionate music fans. In one scene a customer asks a clerk for a teen-pop record for his young daughter, only to be told "[that's] sentimental tacky crap. Do we look like the kind of store that sells [the pop record requested]? Go to the mall." That scene (for me) illustrates nicely how hard it is to get passionate, knowledgeable people to interact with folks who may not be quite as passionate and knowledgeable, without judging them.
There are other theories, including lack of training, resistance to whichever brands are carried by the spa. As we continue to develop our product program we are interested in understanding this important component of product sales. Part of our concept is to get that ball rolling by "selling" products as part of gift packages. We are interested in what you think will, or should happen next. Please post your thoughts, comments and feedback on the blog to any of these ideas or other product related issues.
Posted in Spa Product Sales, General • Share • Trackback
July 13th, 2007 at 4:33 pm
There has been a lot of talk about retail at the old SpaBoom Blog Ranch and Watering Hole. I realize that my philosophy goes against everything that you’ve been told about retail in our industry, but I can’t hold back any longer.
According to the new “Marketing Demographics or the Day Spa Goer” report, only 3.9% said they will spend 50% or more of their total visit on “home care”, 30.9% said 25% and a whopping 65.1% said the they will spend NONE.
Our experience looking at the books of scores of Spas around the country is that most Day Spas ratio of retail to service is less than 15% and Resort Spas are less than 8%. That does not mean there are not plenty of Spas doing far more than those amounts, but the reality of the matter is that very few accomplish higher conversions than that.
So why all the hoop-la about retail within our industry? The product companies would have us believe that that is where the profit is, frankly they are wrong, and I am the heretic for saying so. If you focus on the retail side of your business in hopes to make up for lack of profitability on the service side of your business you will find yourself in DEEPER trouble than before. The service side has to be well run, filled to capacity, and profitably before anyone should think about enhancing retail, and here is why:
Think of your service inventory of rooms and providers as bottles of products that you sell, in very much the same way you might sell retail. The difference is when you are selling retail products and you fail to sell a bottle on the shelf then you have not lost money, that bottle is available to sell tomorrow also. However the inventory of service capacity that you have is lost and gone forever, it is as if you threw away any inventory that was not sold and took it to the dumpster at the end of the day.
There is also a myth in our industry that “retail dollars” are more profitable than “service dollars”. Nothing could be further from the truth, if you think about it I think you will agree that wholesale product cost, plus shipping, plus retail commissions adds up to almost 70 cents on the dollar which is roughly the same as what the average Spa makes on a service dollar. The difference is that service dollars come in much greater volume and therefore the repeat service client is what we need to make our business sustainable and profitable.
An interesting point learned from the above mentioned survey is that many Clients said they were turned off by retail, they say that they went to the Spa for relaxation, and were put off with anything more than a mention of the products. Many said that next Spa visit they would go elsewhere. It should be mentioned of course that some people love to purchase products and that shopping in itself is therapy for them, particularly younger generations. The lesson here, I believe, is to design an approach to retail that is more consultative than in your face.
Folks, if you’re focusing on the retail side but your service side suffers then it is like a Doctor focusing on your hang-nail while you have cancer. And IF I am wrong about all this, and the money IS in the retail then you should close the Spa and open a beauty supply store!
Having said all that, retail is a fine supplementary business that will naturally grow as your service business grows, and when you feel like everything is running perfectly, and you could not squeeze another dollar out of the service sales then my friends feel free to focus on the retail side of your business. Until then always be thinking “Rebooking before Retailing”.
This advice has little to do with “Retail on-line” but I felt that this recent focus on retail that we are told will save our businesses is dangerous for most Spas that struggle and will only save the product companies rather than our own.
There I said my piece, many of you will disagree with me, but I see this daily with Spa businesses and see the trouble retail hath wrought.
Best Wishes & Healthy Profits
Skip Williams
July 14th, 2007 at 11:43 am
As spa owners we took our time researching a line that we would be excited about, it is essential that you pick a line that will give the customer the ability to reproduce the experience at home between visits. (This is why resort spas do not sell as much product). We sell the product to our employees at our cost so that they will use the product and be excited about it as well, and have the ability to discuss their results honestly with the clients. We have service to sales ratios that we challenge our employees to meet and pay comissions based on these ratios, we also give them training that will help them achieve their goals. Our retail helps pay for what would be non-revenue generating space in our spa. Retail revenue is revenue and retail is an amentiy to our customers that is expected.
Regards,
Peter
ALEGRIA Bodywork & Day Spa
San Antonio, Texas
July 15th, 2007 at 8:01 am
Thank you. I've been aggravating myself over retail sales or lack of retail sales, trying to come up with tactful ways for my staff to sell products. I have no problem with my hairdressers selling retail because everyone NEEDS shampoo and conditioner/treatment products and it's just easier to purchase when you get your hair done.
Skin care and nail products are a different story. With so much hype on t.v. about the latest skin "miracles," etc., it's hard to get clients to purchase products. I don't believe in making the treatment about selling so relaxation is the first order of business. At the end of the service I'll usually talk to my clients about my findings and then discuss products and usually can recommend at least one thing that they'll leave with.
So, now I'll focus on pushing my staff to get their clients to reschedule before they leave and focus later on them selling. Again, thank you for making sense and opening my eyes.
July 16th, 2007 at 8:36 am
Amen to what Skip Williams says. For the first few years of running my spa, I kept thinking that I must have been the worse spa out there for only converting 15% of my total sales into product sales. Now I find that most spas in my area are either the same or lower than that.
I focus on service sales and repeat business and I find that what I have gained is less advertising dollars spent which can equal the amount of products that I may have sold in this time period.
The idea of converting up to 50% of total sales to product sales is an invention of the skincare industry.
July 17th, 2007 at 7:18 am
Skip got it exactly right! Our product sales have always been a great disappointment no matter what the sales training, product line, or staff sales/knowledge ability. Repeat customers for services is key! Carol LeRoy Kneading Therapy, Inc. Richmond, Va.
July 17th, 2007 at 9:48 pm
Thanks Everyone for letting me get that off my chest, and your support. And BIG thanks to SpaBoom for having the guts to publish my post!
It does upset me though when I see major product companies pushing around unsuspecting Spa Owners, forcing them to buy far more products that then need, automatic deliveries, unreasonable opening orders, etc.
Spa Owners need to remember who is in charge of their business, and not let these companies run the Spa or dictate what the Spa “should” be doing. In my consulting I see this everyday, Owners who are afraid to upset their employees, they let vendors push them around, and then wonder why their business is in trouble.
Can we all agree to start a campaign of Owner’s to “take back control of their business”, what happens inside the four walls, and not be bullied by employees and vendors alike.
I don’t mean to sound like I am scolding business Owners, but it is high time they get back into the driver’s seat and drive their business toward success. Make that Spa the “Dream” that they envisioned when they started the business, and remember that NO ONE BENEFITS is the business struggles, not the employees, not the customers, and not your children's college fund.
There is only room for ONE CELEBRITY inside YOUR business and that is YOU!
Best Wishes & Healthy Profits
Skip Williams
Resources & Development
August 21st, 2007 at 1:52 pm
Thank God someone finally has the guts to punch a hole in the retail myth most manufacturers have been promoting for far too long.
Skip Williams has been crunching the numbers of too many spas and day spas to believe the gobbledygook most manufacturers throw out to their owner/managers clients and anyone else within shouting distance who’ll listen.
You’d have to be living under a rock not to know the party line about selling professional products. The manufacturers hound you by shouting:
• You’ve got to sell retail – because it’s an integral part of the service. It’ll finish your look…
• You’re actually doing your clients a disservice by not having them buy from you.
Then someone throws around a magic set of “statistics” about the client who purchases retail from the salon/day spa being x% more likely to return to the salon again – or that clients who buy retail are the best clients. On this I could be wrong – maybe there is a survey that shows it to be true – I just haven’t seen it. As my late Uncle Nathan said “liars figure and figures lie”. As chairman of a large beauty salon company Uncle Nathan didn’t suffer fools gladly either.
I’ve worked with plenty of salons and day spas whose retail sales were nothing to right home about, let they make a very healthy profit. Sure, every one of them perhaps make even more money by having a healthy retail program but they’ve chosen not to put their full energy behind it.
So I couldn’t agree more with Skip’s point of view - first to focus your time, energy and resources on your service business…why? Because not only can you make a good profit, but it’ll make the selling of retail products into your business a heck of a lot easier, profitable and productive…
Too many salons/day spas are looking for the quick fix, the silver bullet, and are pleased as punch to sell that balm to them. But frankly with few exceptions (Aveda is one of them & I’m happy to tell you why I believe that at another time) they’re more than happy to have you max out on your credit card by ordering their products.
Remember, I never said that you won’t make money selling retail products…you can and I believe you should. It’s just don’t buy the myth that retail is the only way out of a business that hasn’t been as profitable as you want it to be.