Pricing is one of the most important aspects of your business

I have been wanting to blog about this subject for the last two weeks as I am reviewing my pricing for Spa Boutique and have had to revise my pricing THIS WEEK due to a few reasons. Pricing is one of the five P's of traditional marketing. It will drive whether you stay in business or not.

I want to share what has worked for me in the last few months. We are going through a trying time but those who "pull up their socks" and pay attention, will win big.

Pricing will determine your profitability. If you are not charging enough for your services, then you will go broke. It's that simple. You need to understand your costs and not overspend. If you charge too much, then your customers will notice as well. In retail, we deal with SRP (Suggested Retail Price) which is given to us by distributors and manufacturers, and we are told not to go below this price. If you choose to go above, then that is your perogative. Remember your customers will notice if you go too high.

Costs for any business will go up annually so it's important to keep up with price increases or understand which part of your business can maintain no increase. You need to analyze sales over the last year, how much it cost you to be in business (COGS) and understand what can the market sustain. I decided to increase my prices on December 1st, 2008 due to my gift certificate sales during the holiday season. I did not want to sell gift certificates at the old prices even with an economy that is slowing down.

This January, I was able to renegotiate with two of my skin care distributors for Spa Boutique to gain volume discounts. I decided to pass this savings on to my customers and be very competitive with American Crew and Joico hair care products as well as Gehwol, Intaglio, Skeyndor and Footlogiz products. I am interested in growing my customers and being able to offer more variety to my customers. Other small business owners may have made a different choice. My NEW PRICE does make sure that I can support the cost of the new product and shipping it as well especially if it is heavy.

I hope these sharings help you.

Cheers!

Nancy
Owner of Le Petit Spa, www.lepetitspa.ca
Owner of Spa Boutique, www.spaboutique.ca

Spa and Online Business Planning for 2009

Well, I hit the road running literally this year and now i'm sick...figures I ran into a wall! Anyways, happy to say that most of my business planning is done for 2009.

Having a plan/roadmap/sales forecast, whatever you want to call it, will help you stay focused and will be a cause for celebration when you hit your targets.

So for Le Petit Spa, we hit our 2008 target and were actually 1% over target for the year. December was a nightmare due to the SNOW more so than other factors. Staff and customers could not get to the spa or did not want to venture out into a dangerous situation (and rightly so!). We asked our customers to rebook to avoid a penalty which seemed to be a win-win on both sides. Thankfully, we have an online store at www.lepetitspa.ca for purchasing online spa gift certificates as we rely on an overwhelming amount of sales at this time of year. I am happy to say that we were only 10% under target so not bad. I was not able to drive my car for 3 and a half weeks!

For Spa Boutique, we finished 8% over target. Meeting your targets helps you to make sure you are setting the "right" goal to make enough money to pay all of your expenses. I find the hardest part is to STAY ON TRACK. It's so easy to forget about the plan, get excited about something new, come up with "new and exciting" marketing ideas...you get the picture. As an entrepreneur, it's our weakness - we love creativity and feel stifled with numbers.

Business is all about the numbers. You need to know your numbers and understand your cash flow at all times. I review my numbers monthly with my manager and quarterly with my staff at the spa.

The online business, www.spaboutique.ca, is small and we can review the plan weekly which is really important so that everyone is aware of the goal and there focus is on how to generate sales and keep customers happy. I really believe in profit sharing. Brian Scudamore, from 1-800-GOT JUNK, recommended The Game of Business book which really helped me to explain to my employees how the business works and how important the numbers are. I heard Brian speak at a SOHO event and was able to visit his business a few years ago so I understand now why he is successful.

Some tips to help you:

• To set numbers for this year, review the past few years
• Do a SWOT analysis - what are your strengths, weaknesses, opportunities and threats?
• Be realistic - it's going to be a challenging year; we set Le Petit Spa at 5% under 2008 sales and we feel very positive about this goal and for Spa Boutique, we set the goal much higher as we are opening a retail store in 2009
• If you are looking at expansion, then make sure you have done your research and you know there is a need out there
• At some point you have to make a decision on your numbers and bite the bullet
• Next step is to create a marketing plan - how are you going to promote your business? What marketing messages are going to be important for you? Social media is key to many businesses - FACEBOOK, TWITTER, BLOGGING, WEBSITE content
• Final step is to communicate to your staff and commit to the plan

It really is not that difficult but I think it's a bit scarey - did I set the right goals? Will we reach them? Make sure the goal feels right to you. If you have done your research and you are currently in business, then you are on the right track. If you are new to business, you will have to "take the plunge" at some point. Use experts, organizations like Women's Enterprise Centre that have business analysts, or take courses to increase your comfort level.

It does get easier each year. You need to put aside time to do the strategic work (which sometimes is the hardest part) and then "Just do it!" Enough of the excuses. Get on with it.

Here's to a GREAT year!

Nancy

Word of mouth advertising - how powerful is it?

Dear fellow entrepreneurs,

I built my business on word of mouth advertising. It was critical to our growth especially since we are a service provider. Customers came in and had a great experience. They then told their friends. We now differentiate ourselves with our ambience. Our tagline is "Discover our secret".

So part of our secret is to make sure that we tantalize the customer's senses with smell, touch, and taste. When you come into the spa, you smell lavender because we have many sheaths of lavender around the spa (large bushels). When you come in, we shake your hand, introduce ourselves and lead you to the right station in the spa. In terms of taste, we have special cookies and chocolates made by Patisserie Bordeaux and Daniel Le Chocolat Belge which are businesses "just around the corner" from us. These special touches are part of our ambience and if we run out (god forbid), our customers are not very happy so we always make sure that we have them in stock. Lavender tea made by Bayswater Tea Company on West Broadway is where our fruit rooibos tea with lavender buds added is part of the spa experience. Another option is to have a glass of wine by French Rabbit. So you get the picture.

Now these cookies have been with us for FIVE years. We tell everyone where we buy them so just in case you missed it, it was Patisserie Bordeaux....just around the corner. I don't go to Costco, I pay premium prices to support another local business and to also offer a French touch, "les petit fours" which means small cookie in French.

I have been told today that they will not produce anymore cookies for us until December 30th....so we called them and told them that we are a regular customer and we could order more next week to tide us over. We provided solutions but the response we received was "We had the same situation happen last year with you". Now as THE CUSTOMER, not sure why we are being spoken to this way especially in these hard economic times. They did not relent and now we are left with little choice - we must find a new cookie supplier because this customer service is horrendous. We spend $2,000 per year with this supplier and this customer treatment is UNACCEPTABLE.

Like I said, word of mouth advertising is VERY POWERFUL. Be very careful. It can work to your advantage or it can destroy you. Arrogance is not becoming to an individual NOR to a small business.

At Le Petit Spa, we work very hard to maintain our ambience and ensure that it is first rate every day for every customer. We spend time training our staff and talking to them about the importance.

Now I understand we all have bad days and busy times but every customer is important especially those that support you every week. Make sure you take the time to thank your customers every time they come in ESPECIALLY during these busy times.

Cheers!

Nancy
Small Business Owner

New menu/brochure strategy

I am just launching a new menu this week. It's quite a process as you usually need to include other people therefore everyone has their own timeline. It's been three weeks now and I will be picking up my menus from Minuteman Press at 4pm today. Thank you Mike for stepping up to the plate and making it happen in three days!

The first step in this whole process was taking a long look at what was working, what was not working and what's new in our industry. I call this stage RESEARCH. So we reviewed what our competitors were doing, analyzed sales stats to understand what should stay on the menu and asked ourselves some hard questions about what should change or be deleted. Now when I say hard questions, I am speaking about "Just because you love it, it does not mean your customers love it". It's funny how we assume or think we know what is working. And then we look at the stats - numbers never lie. We are lucky to have five years of data now and be able to make strategic decisions from these sales figures.

The second step is ANALYSIS. How much are your services/products costing you and are you making enough money? We have changed suppliers to lower our costs but we are very determined to keep our high level of quality in our service ingredients. Over time, we have been able to renegotiate and attain lower costs due to volume sales. This happens over time and you must ask for it. Your supplier will not usually be the one to bring it up. You need to consider what prices will go up (all or some) and we actually decreased some of our prices as well. Apply your learnings and make it even better!

The third step is DESIGN. We decided not to change the brand image too much so I contacted Cynthia once again from www.greencouchdesigns.com and had an amazing experience! I know Cynthia from my last menu so I sent her an email and not once we did we speak over the phone! I sent her emails with lots of edits as we got closer and closer to final draft.

The fourth step is COORDINATION. Now if you are changing your menu in print, you will have to make changes to your website as well so I had my webmaster to now bring up-to-date and coordinate with. Also, I called the printers and asked for the best price for high quality printing. I dealt with www.minuteman-vancouver.com because the last job was fantastic and the price was fair. This step is painful because you must pay attention to detail as you approve the last draft, ensure the website is correct and all prices are accurate. My last menu had a manicure service at the wrong price. We had 4 people reviewing the last draft and we all missed it. So GO SLOWLY and make sure it is correct. The printing can costs thousands of dollars so take the time and ask others for their perusal. We also had to update our sales systems in house on December 1st which was the chosen day to launch.

The fifth step is TRAINING. You need to take the time and train your staff on the changes and make it clear to them what has changed, what is new and what is gone. We organized two staff meetings especially for front desk to make sure they could explain the new services and reinforce the changes.

The final step will be DISTRIBUTION. I will make sure they are all over the spa today. I am also putting them in goody bags for our annual Ladies who Launch Trunk Show that will be held at Gramercy Grill Restaurant this Sunday.

Phew! It's a lot of work but it must be done to keep your business looking fresh, to be profitable, and to eliminate the waste.

Happy Holidays!

Nancy

Take care of your Decollete

The areas that show our true age are eyes, hands and décolleté (neck and upper chest). Most people are very aware of the eyes and hands and have a routine to help slow down the process, but the décolleté is often ignored. Remember that this area is often exposed to too much sun and pollution and needs to be protected as well. The skin can become thin and become dehydrated, looking older than it really is. Apply sunscreen and moisturizer daily to keep the skin supple and young looking. There are many products formulated specifically for the décolleté. They can reduce hyper pigmentation and improve firmness in the skin.

Why videos on Youtube are a great idea

The social media world is growing very quickly and the interest is enormous. It is personalizing our messages and targetting customers in a different world. Customers are bored with email and enewsletters so video ratings on YouTube and discussion forums on Facebook are creating new ways to chat and communicate with customers. As marketers, we need to respond to these new trends and "get on the bandwagon".

I met Rodney from www.reachd.com and he transformed my world. He gave me a FLIP video camera because it was the promotion to sign up for the full package and I have not looked back. We video once per week on www.spaboutique.ca and post videos on Youtube for Le Petit Spa. It is making our message more personal and blogging is helping me explain who we are and educate customers. Check us out at www.youtube.com/user/petitspamarketing

I must admit that my enthusiasm propelled me forward very quickly and I had to slow down and explain to my teams why we were doing these activities. They were not as interested in being posted on Youtube until I explained that it was our Le Petit Spa mini-website and that the videos could not be posted on our regular website due to video bandwidth requirements. Once I took time to explain the reason and the objective, they embraced the idea. We still have a lot of work to do. I want my customers to understand what a "Hot Stone Spa Massage" is before they come in. No one likes surprises. They should have an idea so by watching a video for a few minutes will take away any surprises and instead will drive positive anticipation.

Rodney's message was to just start doing it. So I did. I started making time for it every week and making sure that video would become a part of who we are. I keep doing the enewsletters as well to promote the videos and make sure that customers can get some unique, entertaining information as well.

It's hard to explain how we do a workshop at Le Petit Spa so I video'd it for two minutes. Jan Carley, www.creativecoachinggroup.com was our fabulous facilitator and so I thought I would videotape her for a few minutes. She was a little nervous about the whole thing but we "just did it" and it turned out great. Check it out at http://www.youtube.com/watch?v=1gfe0IQNCJE

Try it. It's fun and it works.

Thanks Rodney!

Nancy
Day Spa Owner, Le Petit Spa, Vancouver
Online Retail Owner, www.spaboutique.ca

Media Opportunities for Le Petit Spa

Last week, we were asked at the last minute to be on Breakfast TV with CITYTV. I thought to myself - "Yes, of course!" It turned out well but I did not have any control over the segment and had to wait two hours so I was not as quick on my feet as I normally am. I was told it was very good but felt a bit deflated about it. Now I feel guilty typing this admission but when you get free publicity, that is the case. You do not have control over what happens and you need to roll with it. Our televised episode is on Youtube under http://www.youtube.com/user/petitspamarketing

Then there is print media opportunities which often you can contribute commentary and provide photos (most of the time). It all depends on who it is, what the article is about and if you are being featured, critiqued or evaluated. It can be terrifying but usually we know if media are coming in. We have discovered after the fact and it has worked out for us because consistency is so important to us. Blind visits become more common as you become more popular.

Winning awards is another way to get media exposure especially when you win FIRST PLACE! I am very competitive by nature so I like a good competition. You need to understand what awards are available for your industry. We have annual customer voting competitions by the Vancouver Courier, The Georgia Straight and The Westender for Best Day Spa category as well as Best Bikini Wax, Best Facial and Best Massage. Best bikini wax is next on my list to win; we do an enormous amount of waxing and we do it well so watch out Linda's for 2009!

We win every year in Best Day Spa as one of the top 3 Day Spa's in Vancouver. Sometimes I don't think I toot my horn enough as people are always surprised when I mention it. Like I said, unless you win #1, then it means less. We have won #1 once...it drives me crazy. It's very difficult to sustain momentum over the year and I am constantly doing marketing to ensure brand awareness but ultimately you need enough customers who come to our spa, have an extremely positive experience and vote for us in the end. So what I'm saying is that now the pressure is on to keep winning. It's getting harder every year now because we are no longer "the new spa in town" that people stumble upon and we can easily impress; instead we are "one of the top 3 day spa's in Vancouver" and we had better do it right and consistently every visit.

Basically, my point is that I am grateful for any media opportunities and the awards keep us on our toes.

Thank you Vancouver media for giving my business exposure,

Nancy