the SECRET

Noun: entitlement - 1(a): the state or condition of being entitled. 1(b): a right to benefits specified especially by law or contract. 2: a belief that one is deserving of or entitled to certain privileges.

No other element of the salon and spa business is more worshiped than followings or “full books.” The “full book” syndrome, as I like to call it, creates an untenable sense of “client entitlement,” and serves to shift customer loyalty and income security from the salon and spa, to the technician. A “full book” is prized by technicians and feared by the owners and managers. It creates an unfair sense of ownership, or “my client” mentality, by the technician. Technicians all too often use a “full book” to hold management hostage, and it fuels the “walk-out bomb” that has devastated many an otherwise successful salon and spa.

I am no longer surprised when I hear employees saying, “I’m paying the salon/spa I work for 50% of what I bring in;” it’s a sure sign of a salon and spa being contaminated with entitlement.

Do your employees have the mentality of “client entitlement” in your salon/spa?

• Technicians use the phrase "my client" instead of "our client."
• If a particular technician is unavailable, the front-desk lets the client go without a booking, rather than try to find another technician to service the client.
• Technicians get angry if a client decides to go to another technician, and says “That was my client!”

There is good news. Salon and spa owners have tools available to them, to move away from this dusty relic from the salon industry’s glory days. Followings don’t fit today’s fast-paced, streamlined business thinking. Clients want access to salon/spa services when they need them.

The Three “C’s” – Factors Affecting the Client Entitlement Mentality

Commission ~ One of the biggest contributors of this client entitlement phenomenon is the commission pay structure. Since commission pay rewards only individual sales, it’s no wonder employees feel entitled to “their clients.” The strongest message that commission pay delivers is to “build my following.” Reward your employees for building a following and they’ll feel entitled to build it and take it. Your pay program must reward over-all performance. What gets rewarded, gets repeated. Consider implementing a compensation system that rewards technicians for sharing clients … and communicate it to your clients.

Culture ~ It is never too late to change the culture of your business. A culture of client sharing; the ability to share, move, pass and feed clients to other technicians is imperative to growing your business.

Instead of it simply being assumed that when a new client arrives, who they are scheduled with will become their exclusive technician, develop an orientation program for new clients explaining that there is no need to feel locked into any one technician.

Contract ~ Every client that walks through the door rightfully belongs to the spa, not the random technician who happens to be available when the new client showed up. Having a strong contract in place with your technicians doesn’t just protect the long-term viability of your business; it sets the expectations of your technicians and tells them you mean business when it comes to clients. There is much confusion about Non-Compete Agreements. Read Larry Donahue’s blog article, Non-Compete Agreements: They Can Work for more information.

With almost 10 years experience in new business start-ups and transformations, Ana Loiselle-Donahue is a specialist in finding new sources of revenue and growth for companies of all sizes. She founded theSECRET in 2004 to help businesses flourish through creative —and powerful —new solutions; including brand development, strategic financial planning and employee training. Mrs. Loiselle-Donahue can be reached at 866/288-7353 or at www.thesecretconsultant.com. Check out her blog!

Posted in the SECRET, Spa Business Management, General • 10 Comments »

We were on vacation. His name was Jeff. He gave me perhaps the best deep-tissue massage of my life, and he's struggling to get himself recognized in the small town of Wickenburg, Arizona. I found him completely by accident in the yellow pages!

Jeff mentioned that he had given his brochure to the hotel we were staying at, and that hotel agreed to give his brochure out in the packet of materials they give to their guests. The problem was, his brochure wasn't in the packet of materials I received.

I asked Jeff what he did to get the hotel to agree to hand out his brochure, and his reply was, "Nothing. I just gave them a bunch of brochures."

This highlights what I believe is a common misconception among many spa owners and independent therapists I come across: They think they can easily find other companies with similar clientèle to refer them business, without any quid pro quo. Wondering what the heck this phrase means? I once did too, until my husband (an attorney) told me about it. It means "something for something," and it fits perfectly here.

The fact of the matter is, Jeff (or any spa) is going to have a hard time getting any company to hand out their brochures (or business cards), unless a reciprocal relationship is created. Here are some ideas for establishing quid pro quo:

• Offer a discount to employees of the organization;
• Provide free massages for the owner(s), manager(s) or other principle(s);
• Refer business back to them;
• Distribute their brochures;
• Consider discounts to their clients;
• Trade website links;
• And, always do business with them, personally and through your business.

Other considerations

Create exclusive, reciprocal relationships. For example, if you try to get all the hotels in your area to refer business to you, it's next to impossible to install a reciprocal relationship. Pick one or two hotels, and make it exclusive.

Aside from a hotel, consider other businesses, such as a:

• Salon
• Bed & Breakfast
• Restaurant
• Yoga, pilates and/or fitness center
• Flower shop
• Chiropractor
• Nutritionist

Remember, focus on reciprocal relationships. Make sure you can send them business. If you do, you will reap rewards and dividends in your quid pro quo relationships.

With almost 10 years experience in new business start-ups and transformations, Ana Loiselle-Donahue is a specialist in finding new sources of revenue and growth for companies of all sizes. She founded theSECRET in 2004 to help businesses flourish through creative —and powerful —new solutions; including brand development, strategic financial planning and employee training. Mrs. Loiselle-Donahue can be reached at 866/288-7353 or at www.thesecretconsultant.com. Check out her blog!

Posted in the SECRET, Spa Marketing, General • 3 Comments »

Valentine's Day offers Salons and Spas a chance to express their creativity through unique promotions, but it also gives the business the opportunity to make a lasting impression on customers. Customers who come to your Salon or Spa to celebrate Valentine's Day will return again and again if the service is unparalleled. Try these 3 steps to increase your salon or spa's traffic and keep them coming back for more:

1) A survey by QUESTUS research showed respondents will spend more on Valentine's Day gifts because of the Internet: 40 percent of survey respondents said they will shop exclusively online, and 40 percent also said if not for the Internet, they would not buy Valentine's Day gifts at all! So, if your not selling your services and or products on-line you're missing out on BIG SALES!! SpaBoom's Instant gift Certificates can solve that problem!

2) Make sure you have services and products geared towards all of your target market. If you think that Valentine's Day is just for lovers, maybe you should think again. Go into any card shop today, and you will see Valentine cards for everyone including priests, ministers, and mailmen. Every pet shop has dog bones and catnip wrapped in red hearts and bows. Yes, this expansion of the age-old Valentine's Day idea is a huge marketing ploy to entice the consumer to purchase more. This may not be a bad idea; now everyone is given the opportunity to enjoy the occasion if they choose to do so.

3) Implement online marketing plans to ensure success. Online marketing ranks top in methods to reach consumers. With up to 10 days to two weeks for the first mention of your Valentine's offerings, then a second [mention] about three to five days later. You want to make sure people have time to respond.

It all boils down to your marketing strategy and then your service, which will bring them back year after year.

With almost 10 years experience in new business start-ups and transformations, Ana Loiselle-Donahue is a specialist in finding new sources of revenue and growth for companies of all sizes. She founded theSECRET in 2004 to help businesses flourish through creative —and powerful —new solutions; including brand development, strategic financial planning and employee training. Mrs. Loiselle-Donahue can be reached at 866/288-7353 or at www.thesecretconsultant.com. Check out her blog!

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Salons and Spas can make sales soar this Valentine's Day just with some simple planning. The moment a customer enters your Salon/Spa or Web site you should smother them with love. Immediately reinforce that they've come to the right place to find the perfect Valentine's Day gift. Here are some affordable marketing strategies Salons and Spas can use on and offline to hook Valentine's Day shoppers.

Use The Language of Love
There are a variety of audiences shopping during Valentine's Day. Talk how your customers talk. For example, if your products and services appeal to teens, then you may want to consider using the word "like" instead of "love."

Under $20
It's imperative you offer mini services or products for less than $20. This is the cut-off for impulse shoppers. Anything more than this and your customer may have to think about it. February 14 will be here before you know and there's not enough time for customers to ponder, make your customer's decision easy and price it right the first time. What's more, most shoppers are not afraid to spend $20, especially online.

Customized Note Cards
Offer all customers the ability to include a personal note with their gift. Whether you're doing business online or in-person, always make available attractive note cards customers can personalize. Take it a step further and stock at least 10 prewritten love [and like] messages for customers who lack the ability to express themselves. They'll appreciate your thoughtfulness.

Gift Wrapping
Receiving a wrapped gift makes the recipient feel more cherished. She'll think warm thoughts such as, "Oh - he took the extra time to wrap it. That's why I love him." Ultimately, she'll love the gift and this will increase your chances of your customer returning to your store or Web site to purchase her birthday, anniversary, "I'm Sorry" and holiday presents!

Create a Mood
It's Valentine's Day. Remember to build-in a mood of romance throughout your customers' shopping experience. Try hanging red streamers over your product case, displaying complimentary chocolates at the counter alongside your Valentine's Day special offer POP, or a simple Web site page boarder with connected hearts. For lucky business owners with roadside signs, try using red light bulbs and wrapping the sign with an enormous heart or cupid. Passersby will get the hint that you have some great Valentine's Day gifts inside.

Provide Variety
It's important to position at least one of your existing products and services as a great Valentine's Day present. For example, rather than just advertise your salon/spa as a place to take your lover for Valentine's Day, instead, sell a premium-priced packaged.

There are very few businesses that could not capitalize on Valentine's Day to jazz up their marketing. It's fun and profitable! Give it a try.

With almost 10 years experience in new business start-ups and transformations, Ana Loiselle-Donahue is a specialist in finding new sources of revenue and growth for companies of all sizes. She founded theSECRET in 2004 to help businesses flourish through creative —and powerful —new solutions; including brand development, strategic financial planning and employee training. Mrs. Loiselle-Donahue can be reached at 866/288-7353 or at www.thesecretconsultant.com. Check out herblog!

Posted in the SECRET, Spa Marketing, Spa Business Management • 1 Comment »

This topic got sparked a couple of weeks ago when I was driving in the car with my husband Larry, and his two girls, to take them for haircuts. I told Larry that we couldn’t go to the “usual” place because the person who answered the phone told me they were “booked up for the day.” Larry’s response to this was, “Good for them!”

Many of you may be thinking the same thing, BUT I am hear to tell you that such thinking slows the growth of your business; no if, ands, or buts about it!

As we drove to a new place to cut the girls’ hair, I launched into a 15 minute diatribe with Larry about how this view of productivity and client retention was skewed. It went something like this …

Retaining clients is paramount in growing your business, and productivity is certainly one of the most important measurements of team effectiveness for spas and salons. Studies prove that when productivity is higher than 80%, retention begins to suffer. As productivity initially increases, so does retention. But, when productivity rises above 80%, retention stalls and reverses direction. The result is short-term sales without long-term growth and profits.

Let’s look at the problem from the client’s perspective: Client access becomes restricted when technicians are “booked” at or near capacity because clients have a harder time getting a convenient time slot. So they go elsewhere, as in the case with Larry and his girls.

Is there an easy solution to this? Measurement of this phenomenon can be difficult, but here is some quick tips to ensure you are not turning clients away and stunting your company’s growth:

• Requests only - If you have technicians who receive a high percentage of requests, don’t book him/her with clients that do not request them. Fill the book of less productive technicians with these clients.
• Schedule the slow times first - If a client’s schedule is flexible, book the slow or hard-to-book times first, knowing the peak times will always fill.
• Gridlocked technicians - When a technician begins to get gridlocked or “booked up,” systems should be in place to orient these clients with other equally trained team members or it may be time to hire someone new to the team.

Remember: it’s expensive to get a client to walk through your door the first time; don’t screw it up by being “booked up” and forcing that client to go to one of your competitors. The choice is yours.

With almost 10 years experience in new business start-ups and transformations, Ana Loiselle-Donahue is a specialist in finding new sources of revenue and growth for companies of all sizes. She founded theSECRET in 2004 to help businesses flourish through creative —and powerful —new solutions; including brand development, strategic financial planning and employee training. Mrs. Loiselle-Donahue can be reached at 866/288-7353 or at www.thesecretconsultant.com. Check out her blog!

Posted in the SECRET, Spa Business Management • 11 Comments »

Next to getting the client to walk through the door for the first appointment, the most important step is getting the client to come back.

I am simply amazed at how many salon and spa owners “miss the boat” on this easily applied marketing tool - The New Client Tour.

It may seem obvious, but you can’t imagine how many times I'm not given a tour or offered a brochure, when I visit a salon or spa for the first time. Oh, and if I am lucky enough to be given a tour, it's often hastily conducted, confusing or incomplete. I often feel like I'm imposing on the one giving the tour. Ever have this happen to you??!?

Because cultivating new clients involves a long lead time and expense; when you get them in the door use every opportunity to make them a client for life and to utilize more than one of your services!! Giving a well thought out and scripted tour is an integral part in increasing client retention and cross-selling your services.

Why is a tour important?

The first appointment with the client is very important, and a tour is the single greatest way to welcome a new client to your business - to make them feel like a true guest, and that there is nothing greater for your business, than to serve this new client. This gives you an excellent opportunity to exceed the client's expectations.

Simply put: a tour is an outstanding educational tool, sales tool, and dramatically increases customer satisfaction and retention. It provides a wonderful opportunity to provide a soft-sales pitch for your business and its services. It gives the customer an opportunity to see the different parts of your business and how you stand apart from the competition. It also, gives them an understanding of the various services performed, why they might want certain treatments and a chance to ask questions they might not otherwise ask.

How to make a tour successful?

Don't think you have time or can't otherwise do it? Make it a part of your culture and business model. Don’t lose out on this opportunity for increased sales with excuses or obstacles. You must plan for it. Ask your new client to show up 15 minutes early. If you don't do a call-back to confirm the appointment, start doing so, and remind the new client to show up 15 minutes early.

An effective tour must be carefully scripted. Everyone on staff must know how to give one and what their role is in the tour. The greeter (often the receptionist or adviser) should be thought of as the sales and customer service force of your organization. During a tour, they become the tour-guide. Make this the most important thing they do, when they do it; and they can’t rush through it because they need to cover the front-desk or phone. When other staff sees a tour in progress, they must be especially friendly and helpful.

Don't conduct the tour in the hallway. Make sure to actually take the new guest into each and every room (as much as practical). Keeping a new client n the hallway is awkward, and fosters the perception of rushing. Standing in the hallway doesn't help him or her truly appreciate what each room (and the corresponding services) has to offer.

Don’t forget to give them a brochure.

When your clients are ready to leave your salon or spa, always give them a brochure. I convinced one of my clients to hand out laminated cards. The results have been wonderful. My client tells theirs, “We have had this card laminated because we want you to always have it. Even if you run this card through the washing machine, you will still have our number. We want you to know that if you have any questions about your service or products, or anything that you would like to do in the future, you can give us a call. From now on, we are your expert therapist, so if you have any questions, ever, about your skin/hair you can call us.”

Remember: It's expensive to get a new client into your door, so don't take that new client for granted. Reinforcing that you care about your clients, their questions, and their success, keeps them coming back and sending their friends and family.

With almost 10 years experience in new business start-ups and transformations, Ana Loiselle-Donahue is a specialist in finding new sources of revenue and growth for companies of all sizes. She founded theSECRET in 2004 to help businesses flourish through creative —and powerful —new solutions; including brand development, strategic financial planning and employee training. Mrs. Loiselle-Donahue can be reached at 866/288-7353 or at www.thesecretconsultant.com.

Posted in the SECRET, Spa Marketing, Spa Business Management, General • 3 Comments »

I'm so frustrated. I can't believe all the spa and salon owners I come across, who simply fail to appreciate, understand or execute on what I believe are absolute "no brainers," to making more money and becoming more successful.

Let me tell you a bit about my background. I'm one of the few that "made it" in this industry. I started my own spa and salon from scratch, making it a Salon Today "Top 200 Salon" two years in a row, and eventually sold it for a tidy profit three years ago. That salon and spa still exists, and is doing well. It is Anna Luis Salon and Day Spa in Michigan. Since then, I've been a consultant working on startup and turnaround spas and salons all across the nation. I work hard to help these owners realize their dreams: Opening and maintaining a healthy and growing business.

My clients, like the clients of other consultants in this industry, have a leg up on their competition: They made the difficult decision of hiring a consultant. They realize that engaging an expert provides valuable input, a second pair of eyes, and raises difficult questions that ultimately have one goal in mind: Success.

There are scores of spa and salon owners who are having trouble staying out of the red, bringing in business, keeping their employees, maintaining outstanding service levels, etc, yet steadfastly refuse to hire a consultant. Worse, they refuse to implement what I believe are absolute no brainers. Over the rest of this year, I'm going to post a number of no-brainers. These no brainers are easy, inexpensive and absolutely critical to your success.

No Brainer #1: Get a Professional Logo.

How do you feel, when you try to do business with someone with a crappy logo? Did you have low expectations about that company? Did it leave you feeling a bit anxious about their product or service?

Every business needs a professional logo to help the customer feel comfortable and identify the promise of the goods or services they are about to receive. Professional means that it doesn't look like a photograph, business card or plain text. It must exemplify and promote your brand (i.e. The promise you want to make to everyone about what they will experience when they do business with you). It must be easy to recognize and read at any size (large or small).

For an experiment, go to Spa Emergency and type in your zip code or metro area. Quickly scan the logos. What catches your eye? What looks the most professional? Now search for "Michigan," and scan that list. Notice the logo for Grande Med Spa (one of my clients)? How does that logo look in comparison to the competition?

The Grande Med Spa logo highlights several important issues:

• It's professional and stands out amongst the rest.
• We know they are targeting men and women.
• We know it's a medical spa.
• We feel comfortable that it's a quality establishment (i.e. It forms a high expectation of the potential experience).

By the way for you SpaBoomers: The Grande Med Spa logo also takes advantage of SpaBoom's "transparent" logo capability, which allows the logo to "float" above the background image. This makes for really beautiful gift certificates. Check out SpaBoom's help for logos, for more information.

I really recommend spending the money to hire a spa consultant (who understands branding concepts) to come up with a logo for you (Of course, I'm biased on this ). If you're the "hands-on" type and REALLY have some creative, artistic skills; then I'd suggest checking out Logo Maker. You build it yourself and spend approximately $40. Word of caution: Make sure you get at least five of your friends to review and give you a thumbs up before etching your new logo in glass!

Some additional tips to consider when coming up with a logo include:

• Build it to last - It should never have to be redesigned.
• Don't make a photograph your logo - Make sure it looks good in black-and-white (i.e. newspaper advertisement), and can be reduced in size to look great on a business card.
• Make sure it can be adapted to work on other products, marketing and sales collateral.
• It must work with your overall marketing strategy.
• Use a combination of your company name and emblem.

It's been said before, but this is one proverb that bears repeating: You never get a second chance to make a first impression. If you don't have a logo, or you have a crappy logo, make this your top priority. It's a no brainer.

With almost 10 years experience in new business start-ups and transformations, Ana Loiselle-Donahue is a specialist in finding new sources of revenue and growth for companies of all sizes. She founded theSECRET in 2004 to help businesses flourish through creative —and powerful —new solutions; including brand development, strategic financial planning and employee training. Mrs. Loiselle-Donahue can be reached at 866/288-7353 or at www.thesecretconsultant.com.

Posted in the SECRET, Spa Marketing, Spa Business Management, General • 7 Comments »

Employee Training Series
Article III

Training your workers can be a tremendous drain on your time and resources. But before you dismiss the idea of helping your employees learn new skills, consider the ways that skill-based training can positively affect your employees and your company.

Training increases employee productivity. In addition to learning how to complete new tasks and take on more responsibility, employees can learn advanced techniques to help them service your clients more efficiently.

Training reduces turnover. Employees who don't receive guidance or have difficulty learning the ropes are much more likely to leave your company. Employees are less likely to leave if they have the opportunity to learn new skills and keep up within their industry.

Training improves job satisfaction. Investing time and money in employees’ skills makes them feel valued and appreciated, and it challenges them to learn more and get more involved in their jobs. Higher job satisfaction ultimately results in reduced turnover and higher productivity.

Training aids in the recruiting process. If you're committed to training, you'll be more willing to hire a desirable candidate who lacks a specific skill. Training also makes your company more attractive in the eyes of potential employees because it shows them that they have room to grow and accept new challenges. In addition, training existing employees could reduce the need to hire new staff.

Training rewards long-time employees. You'll be more willing to promote existing employees who have learned new skills and are ready to take on new challenges.

Training reduces the need for employee supervision. Not only does skill-based training teach employees how to do their jobs better, but it also helps them work more independently and develop a can-do attitude.

Ana Loiselle, President of the Secret Salon and Spa by Design in Royal Oak, Michigan. A former salon and spa owner, Ms. Loiselle can be reached at 248/546-4312 or at www.thesecretconsultant.com.

Posted in the SECRET, Spa Business Management • 2 Comments »

Employee Training Series
Article II

Well-trained employees are the key to your small business success. Studies have shown that the most successful, productive employees are those who have received extensive training. They’re the cream of the crop, often having the strongest stake in the company’s future. In an ideal world, you would be able to hire people who already possess the exact skills your business needs. But in today’s competitive labor market, demand for skilled workers far exceeds supply.

That’s where training comes in. Not only does instruction arm your employees with needed professional or technical skills, but it also shows that you are invested in them and interested in bringing them with you into the company’s future. This helps keep workers motivated and involved.

To successfully launch an employee training program in your own salon or spa, follow these 10 helpful tips:

1. Training as investment. The reason training is often considered optional at many companies is because it is thought of as an expense rather than an investment. While it’s true that training can be costly up front, it's a long-term investment in the growth and development of your human talent.
2. Determine your needs. As you probably don’t have unlimited time or funds to execute an employee training program, you should decide early on what the focus of your training program should be. Determine what skills are most pertinent to address current or future company needs or ones that will provide the biggest payback. Ask yourself, “How will this training eventually prove beneficial to the company?” Repeat this process as your business needs change.
3. Promote a culture of learning. In today’s fast-paced economy, if a salon or spa isn’t learning, it’s going to fall behind. A business learns as its people learn. Communicate your expectations that all employees should take the necessary steps to hone their skills and stay on top of their professions or fields of work. Make sure you support those efforts by providing the resources needed to accomplish this goal.
4. Get management on board. Once you have developed a prioritized list of training topics that address key needs within your company, you need to convince management to rally behind the initiative.
5. Start out small. Before rolling out your training program to the masses, rehearse with a small group and gather their feedback. This sort of informal benchmarking exposes weaknesses in your training plans and helps you fine-tune the training process.
6. Choose quality instructors and materials. Who you select to conduct the training will make a major difference in the success of your efforts, whether it’s a professional educator or simply a knowledgeable staff member. Having the right training materials is also important — after the training is over, these materials become valuable resources for trainees.
7. Find the right time. Select a training time and space that’s conducive to learning. Choose time that you can be consistent with, like before or after store hours.
8. Clarify connections. Some employees may feel that the training they're receiving isn't relevant to their job, i.e. retail sales or professionalism. It’s important to help them understand the connection early on, so they don’t view the training sessions as a waste of valuable time. Employees should see the training as an important addition to their professional portfolios. Award people with completion certificates at the end of the program.
9. Make it ongoing. Don’t limit training solely to new employees. Organized, ongoing training programs will maintain all employees’ skill levels, and continually motivate them to grow and improve professionally.
10. Measure results. Without measurable results, it’s almost impossible to view training as anything but an expense. Decide how you’re going to obtain an acceptable rate of return on your investment. Determine what kind of growth or other measure is a reasonable result of the training you provide. You’ll have an easier time budgeting funds for future training if you can demonstrate concrete results.

Ana Loiselle, President of the Secret Salon and Spa by Design in Royal Oak, Michigan. A former salon and spa owner, Ms. Loiselle can be reached at 248/546-4312 or at www.thesecretconsultant.com.

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Employee Training Series
Article I

Many salons and spas provide some sort of introductory training or orientation for most of their new employees. It may take the form of an older employee assigned to show the new employee "the ropes." Or it may be left to the manager to show them where the coffee pot is and how to apply for time off.

Yet some owners in this highly competitive industry recognize the value in New Employee Orientation (NEO) that goes a step farther. They require several weeks or even months of training to familiarize every new employee with the company, its products, its services, its culture and policies, even its competition.

There is a measurable cost to that training, but is it worth it?

Surprisingly, all the reasons you come up with (except cost itself) are actually reasons to train. If you have high turnover, low retail sales and poor morale; training new employees will make them more productive. They will feel better about themselves and the job and they will stick around longer.

If you have low profit per employee per year, you have major problems. You need to start training all your employees, not just your new employees, right away.

And if you still believe that our beauty schools provide adequate training to make students labor-ready you are living in a dream world. Yes, some job seekers make the effort to learn on their own the skills needed for a new job, but most get that training on the job.

That's where training comes in. Not only does instruction arm your employees with needed professional or technical skills, but it also shows that you are invested in them and interested in bringing them with you into the company's future. This helps keep workers motivated and involved.

Well-trained employees are the key to your small business success. Studies have shown that the most successful, productive employees are those who have received extensive training. They're the cream of the crop, often having the strongest stake in the company's future.

There is no better time to start employee training than your New Employee Orientation.

Ana Loiselle, President of the Secret Salon and Spa by Design in Royal Oak, Michigan. A former salon and spa owner, Ms. Loiselle can be reached at 248/546-4312 or at www.thesecretconsultant.com.

Posted in the SECRET, Spa Business Management • Comment »

Every year, thousands of salon and spa businesses fail. No business owner plans to fail, but they fail all the same. One of the main reasons for the high failure rate is an over reliance on getting new clients.

Marketing isn't about the medium; it's about getting and keeping customers. In order to succeed, every salon or spa must have brochures and other forms of printed sales literature to hand out to customers and prospects. Brochures can help, but only if you use it in conjunction with other tools.

A salon or spa needs printed marketing literature for two reasons:

Credibility - People expect a "real" company to have printed sales literature. Anyone can spend $60 on business cards and letterhead and call themselves a company. But if you want people to know you mean business, you need a brochure.

Time - People want printed material to take home and read at their leisure. Brochures also support other advertising, direct mail, and online promotions. In short, a good brochure sells.

Here are 12 tips on writing a brochure that will support your marketing efforts and increase your sales.

1. Know what your reader wants - Write your brochure from the customer's point of view. What are your customers' concerns? What do they need to know before they come in for a service or make a purchase? Try writing down all the questions you hear from your customers and try and answer them in your collateral.
2. Motivate your reader to look inside - The first page your reader will see is the front cover. Get it wrong and you will likely lose the sale. Start with the benefits of your product, or use thought-provoking statements that motivate the reader to pick up the brochure and open it. Tell the reader there's something inside just for them — an exclusive invitation, a free report, a special discount, or advance notice of sales. Don't put just your company logo or product name on the front. That will not work.
3. List the contents - In brochures of eight pages or more, a table of contents is essential. Design it so that the table of contents stands out from the rest of the text. Use the contents to sell the brochure. Don't use mind-numbing words like "Introduction" or "Services." Use your key sales points in your headings.
4. List your product's benefits - Purchasers care about benefits, not features. To develop a list of benefits, draw up a list of service features and add the words "which means that…" after each point. For example, "This treatment includes a foot massage, which means that…it feels o-so-good." Or, "This facial has an exfoliation component, which means… your skin will glow." Benefits are what sell products.
5. Make the brochure a keeper - Putting helpful information in your brochure will encourage the reader to keep it, refer to it often, or pass it on to other people. If you are selling skin care products, you can give your readers tips on how to combat pimples, dry skin, fine lines, and wrinkles.
6. Alter the shape - Who says a brochure has to be 8 ½ by 11? If you are selling massage, design a brochure in the shape of a person’s body. Hair coloring services? Design it in the shape of a paint brush. Use your imagination to come up with an original, eye-catching piece. Try tall and slim, square, oblong, whatever you like. The only limitation is your imagination, and, of course, your budget.
7. Make it personal - An experienced speaker talking to a large audience will pick out someone in the crowd, and talk directly to him or her. This connection allows the speaker to make the talk more personal. In a similar fashion, write your brochure with an imaginary person in mind. Why? Because writing in a direct "I'm-talking-only-to-you" style will increase response.
8. Add atmosphere - You don't want your brochure to sound aloof. Let your reader share your feelings. A description about a body treatment does not need to go into the ins and outs of how the body treatment is performed. Instead let your words show them how warm, snug and relaxed they'll be when they get one of your body treatments.
9. Start selling right away - Not everyone needs to know about every aspect of your product or service. Don't waste their time telling them about things that don't convey a benefit.
10. Address your reader's needs - Don't get carried away with your own interests. Talk about your reader, not yourself.
11. Give directions - Organize your brochure so readers can flip through the pages and easily find what they want. Provide clear signposts or headlines throughout the brochure and make sure each one says "Hey, pay attention to me!"
12. Ask for action - Regardless of how you organize your brochure, there's only one way to end it. Ask for action. If you want your reader to come to your salon or spa and get a service or purchase products, include an 800 number, gift with purchase offer, or some form of response mechanism. In fact, to increase your brochure's selling power, include your offer and a response mechanism on every page.

Ana Loiselle, President of the Secret Salon and Spa by Design in Royal Oak, Michigan. A former salon and spa owner, Ms. Loiselle can be reached at 248/546-4312 or at www.thesecretconsultant.com.

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Developing a Winning Management Team: The key to a More Productive and Profitable Spa

Have you run the gamut on finding new ways to keep a handle on your business, only to be frustrated? Are you wearing all the hats and feel like you’re going crazy? Have you tried hiring a manager, coordinator or director and are disappointed by the outcome?

I know the feeling. After owning a salon and spa myself, I can relate. The demands on spa owners in this ever changing society are more intricate than ever. No longer is it possible for one person to effectively handle all the functions of a successful salon or spa business.

Well, imagine a highly motivated team who shares in your company vision, goals and objectives, who is committed to your organizational success! A team working together who is highly motivated to achieve your company's objectives! It all begins with a Management Team. A Management Team is the catalyst for your future business' success.

Your company is a reflection of those who manage and over see it. A Management Team provides your salon or spa with the developmental direction necessary to keep pace with the changing competition, environment and your organization's growth. Organizations are more effective when teams of people, with the right mix of skills, work together to achieve a common goal or set of goals. This team approach can help companies overcome the common stumbling blocks of misaligned goals, slow or no growth and lack of profitability.

Running a successful company in a Management Team structure is hardly a new concept and has been an industry standard for decades in large corporations. If you take a look at any Fortune 500 company you will see this system of duty distribution at work.

The fundamentals of building a successful salon or spa must address the five functions of a customer service business: Marketing, Finance, Education, Sales & Customer Service, and Human Resources. Making decisions by viewing topics from five different vantage points simultaneously increases the chances of making correct decisions.

The purpose of your Management Team is to facilitate on your vision. The owner’s job is to show them your destination; where you have been, where you think you are now and where you want to go. When everyone has the same goal (vision) and everyone has their “area of responsibility”, then a real sense of team is established. In a Management Team one person is responsible for a specific function of the business and “represents” the people who are affected by their area. The concept of “areas of responsibilities” is important because one person is not expected to have the know-how to carry out all the functions on their own. Instead, they have an innate interest in their area, and are committed to the company’s success and are better equipped to get things accomplished. Each team member needs to be exceptional at what they do, but not necessarily great at everything.

In well-run organizations, managers must understand that they are a piece of a puzzle that helps to complete a big picture. Only when people work together, seamlessly, can there be hope of accomplishing the company’s vision.

In short, a successful salon/spa is seldom run by one individual

To read more about this topic, please reference the complete article!

Ana Loiselle, President of the Secret Salon and Spa by Design in Royal Oak, Michigan. A former salon and spa owner, Ms. Loiselle can be reached at 248/546-4312 or at www.thesecretconsultant.com.

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PROFITS ARE THE KEY TO ANY BUSINESS. MAKING more money is what everyone wants, yet in the spa industry, it's becoming more and more difficult to show a profit. Owners and managers need to learn to grow their businesses with true measurements and to protect their bottom lines, but many never address their numbers and profitability until it's too late. It can be stressful trying to speculate what the future holds for your own spa if all you have is wishful thinking. All too often, spa owners perform facials just to make ends meet.

But understanding the financial aspects of running a business can be a challenge if you've never taken an accounting or economics course; certainly, no one spent time during their esthetics training on spa finance. With little financial back ground, it's no surprise that spa owners are wavering. The good news is that growing and protecting the profitability of your business isn't an impossible undertaking—It just takes the proper know-how.

You must focus on two major areas for growth and profitability: one, establishing a true form of measurement to project, track and monitor the growth (or lack thereof) in your business; and two, gaining a complete understanding of how to protect the cash you already have coming in.

Keys to Success

Let's begin by tracking five key areas; good numbers in the following components have proven to be successful indicators of increasing sales revenue.

New clients. Knowing how many new clients visit your spa each month allows you to project your sales, know when to hire new employees and gauge the success of your marketing dollar investments.

Client retention. Too few businesses pay enough attention to client retention. The ability to keep clients fuels your spa's growth and should be the focus of your energy. For tracking purposes, a retained client is any new client returning for a second, and visit within 90 days. Setting a retention goal of 50% is an excellent place to start; if you aren't able to meet this goal, you must consider why—there may be a customer service or technical training problem. The key to retention is education. I can't express enough the importance of keeping retention high—by retaining 50% of your new clients each year, you can expect a 15% growth just from this area of your business. If you're serious about growing your business you need to find a way to reward your staff for retention.

Client frequency. Examining the frequency of your clients' yearly visits on a month-by-month basis will help you better project future sales and understand the flow of your retained client base. When the economy is bad in your area it isn't uncommon to watch the yearly frequency rate drop. However, you can use this opportunity to rework your marketing strategy to prepare for slower months. When you can be flexible with a changing economy, low frequency numbers will have less of an impact on your spa's overall profitability.

Average ticket sale. The average ticket sale is the combined sale total of products and services a client has paid, taken on an average. Most owners believe that raising the average ticket sale means raising prices. But the easiest way to increase the average sale is to add services or retail products to a client's ticket. Every spa should have in place a unique approach to adding on services or retail products during a scheduled service.

Retail sales. If you haven't heard it often enough in the spa industry by now, retail sales must be the center of your attention because retail sales and retention go hand and hand. Here are some statistics gathered by Festoon Salon (www.festoonsalon.com) in Berkeley, California, that prove the point:

• If a client purchases two retail products, there's a 60% chance of her return.
• If a client purchases one retail product, there's a 30% chance of her return.
• If a client purchases no retail products, there's a 10% chance of her return.

Another important fact in retail sales is that you'll net approximately a 10% profit from services, but retail sales can yield up to a 40% net profit.

When I think of profitability in the spa industry, one name comes to mind: Douglas J Salon and Spa, anchored in Okemos, Michigan. Brothers Scott and TJ Weaver own several locations throughout the state, including two Aveda Concept Schools, two Exchange Salons for Advanced Education and two new schools scheduled to open in fall 2006 and spring 2007. The Weaver brothers have a mindful approach to profitability: "If you're experiencing low retention, then you'll probably find that you have low retail sales as well," says TJ. "Knowing and understanding the average ticket sale is the key to getting them to spend more," adds Scott. "You know your marketing dollars are working because they're in your spa; the next step is discovering how to drive the sale forward."

If you're experiencing low retention, then you'll probably find that you have low retail sales as well.

Gross and Net

Once you have a system in place for increasing sales, how do you protect your cash flow? To understand the process, you must know some accounting basics.

When looking at your spa's profit-and-loss statement, the two most important factors are your gross profit and your net profit. To find your spa's gross profit, take your total retail and service sales and subtract variable costs, or cost of goods sold (e.g., payroll, payroll taxes, backbar items and products for resale). These costs are considered variable because they vary with the amount of business you do. What's left is your gross profit. Your gross profit margin (the percentage of your gross profit to total sales) is a very important financial indicator. If your spa isn't delivering a 45% to 50% gross profit margin, you'll have a hard time managing any bottom-line profitability.

The biggest key to an outstanding gross profit margin is a sensible compensation plan.

The biggest key to an outstanding gross profit margin is a sensible compensation plan. "Salon owners and managers need to be sure they're fair with their employees, yet be careful not to overcompensate. A spa's compensation plan is usually its largest expense," says Scott. If your spa's gross profits are below 45%, you should consider reworking your compensation plan.

The second figure to calculate is your net profit, or bottom-line profit. To do this, take your gross profit and subtract any fixed expenses such as rent, utilities, advertising and any other costs not associated with service payroll and products. These expenses are considered fixed because, for the most part, they stay the same each month. After you've subtracted your fixed expenses, the amount that's left is your net profit—what you'll take home after all of the bills are paid. A good net profit can mean the differ¬ence between a successful future and just getting by.

There are many forces at work to endanger your thin slice of the profitability pie. I've found that most salons and spas are lucky if they yield a 3% net profit. When I work with my clients, however, I budget them for 15%. The key word here is "budget"—to achieve a healthy profit, creative budgeting must be in place and a limit must be put on spending.

Now that you have an under-standing of how to increase sales and how your gross and net profits are derived, you can begin using this knowledge to your advantage. Success doesn't happen by acci¬dent; it's a result of careful plan¬ning. When you put the correct chain of events into motion, you'll find that purposeful action always yields successful results.

Ana Loiselle, President of the Secret Salon and Spa by Design in Royal Oak, Michigan. A former salon and spa owner, Ms. Loiselle can be reached at 248/546-4312 or at www.thesecretconsultant.com.

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