On My Mind - THE
by Julie Register
A reduction from a usual or list price.
Loss Leader: Any article that a store
sells cheaply or below cost in order to attract customers
likes a deal, right? Maybe not everyone. Find out how the practice of discounting
(weekly specials, web promotions, coupons, etc.) can anger clients, demotivate
treatment providers and devastate the finances of a spa.
I was arranging a day out with my daughter that
included a few hours at one of my favorite spas. I went to the spa's website to
select our treatments and get the spa's phone number. The first thing I noticed
was a calendar of discounted services for specific treatment providers on specific
dates. I was happy to save 20% for services that I would have paid full price
for, so I booked our appointments. We went to the spa and had a great time.
spa's newsletter started including the calendar of discounted services for the
upcoming week. A few months later, a friend and I were going to be in the area
of the spa for an evening event, so we decided to spend the afternoon at that
spa. I immediately went to the calendar of discounted services and made my selection
from there. I was again happy to save 20% for services that I would have paid
full price for. This time I also had a national spa gift certificate that I purchased
from a big discount store that saved another 20%. We went to the spa and had a
I loved saving the money but began to wonder how on earth these
discounts could be good for the spa's business. I asked the owner. The owner said
it was a nightmare. The discounting was started for two reasons:
fill the books of treatment providers that had only partial shifts scheduled on
It achieved both goals to a certain extent.
The second goal was more successful than the second. The treatment providers,
while happy they had clients, noted how much less they made for the same amount
of work. Their commission was lower and they were being tipped on the reduced
price (if at all). The discounts did attract some new clients, but not as many
as hoped for. The new clients may have been people who normally could/would not
afford to go to this spa and, therefore, won't return. Time will tell.
overall effect of this discounting was devastating, however. Loyal clients stopped
booking in advance. Instead, they waited for the newsletter to come out and booked
for the following week - at a 20% discount. If the discounted services were all
taken, they'd wait for the next week's discounts instead of scheduling a regularly-priced
service this week.
The spa owner has reduced the discount to 10% but is
afraid to stop it altogether for fear of angering the spa's clients. The owner
believes the spa is in far worse shape financially after the discounting than
if it had never been started.
I asked about the gift certificates. The owner
said they stopped accepting the national gift certificates for the weekly discounted
services. That angered a number of clients, so they decided to accept them again.
These certificates are, in general, loss leaders.
You know what they say
about unhappy customers - They tell their friends, who tell their friends, who
tell their friends and so on. Bad word-of-mouth is the polar opposite of what
a spa business wants and needs. I believe that the practice of discounting can
lead to great customer dissatisfaction. In the above example, clients have gotten
used to the discounts and won't be happy when they are discontinued (and weren't
happy when they were reduced from 20% to 10%). If clients buy a national spa gift
certificate and can't use it for everything the spa offers, they will be unhappy.
That has happened to me.
number of months before the events at the spa in the first example, I was given
a national spa gift certificate that was accepted at a local day spa. I made an
appointment for a pedicure and used the gift certificate. A few weeks later, I
saw these national spa gift certificates at a big discount store. It offered a
$100 gift certificate for $80 - a 20% savings. I got some for the specific purpose
of using them at that local day spa for pedicures. The next time I had a pedicure
at that spa, they told me I couldn't use the gift certificate for pedicures -
only for facials, massages and body treatments. This new "policy" was
not written anywhere for the spa clients to see. After a little discussion, I
paid and left. I am pretty sure if I had a massage there, they would have said
gift certificates could only be used for facials. I haven't been back.
general, I find coupons annoying. I don't think I am alone. If you had a coupon
and left it at home, you lose. If you didn't know there was a coupon to be had,
you lose. The key word here is "lose." Spas, where a huge part of what
they do has to do with how their guests feel, should not set their guests up to
feel like losers. The following is a bad experience I had with a coupon/promotion.
had such a great time at one spa, the next day I decided to browse through the
menu on their web site to see what service I might like to have the next time
I visit there. That's when I saw a link to a page titled "Current Promotions."
When I clicked on it, I saw the following:
Save 30% On
Save 30% on any Facial (excluding Express services)
On any Manicure and/or Pedicure
Save 10% on any Waxing
Save 20% On any first
time Haircut and/or Haircolor service (some stylists excluded) plus 25% off on
Brazilian Keratin Treatment
Hmmmm. Why didn't the person I talked to
on the phone when I made my reservation the day before offer this promotion to
me? I would have loved to have paid $86 for my facial instead of $123. In fact,
had I been offered this discount, I probably would have gotten a massage as well.
I felt cheated. Surely she just forgot to mention it...I could feel my blood pressure
rising. I called and asked. The young woman who answered asked me to hold for
a few minutes - to check with her supervisor, no doubt. She came back and said
I would have had to mention this to the person who took my reservation and specifically
ask for this promotion. The reservationists don't (proactively) tell customers
about it. Excuse me?? Is this a promotion or a secret?? I feel like I was penalized
because I was not in front of my computer when I made my reservation. Is that
any way to treat a new customer (or any customer for that matter)? Frankly, it
made me angry. I asked if I could get the discount now. She said "no,"
but I could next time. I told her I was a new customer, and even though I loved
my spa experience, I wasn't sure I would be coming back for a "next time"
because of this.
As I've said before, spas should NEVER do ANYTHING that
makes their customers feel bad. Having a "secret" promotion is bound
to make customers feel bad when they find out they didn't know the secret when
they needed to.
My annoyance may fade, and I may go back to this spa.
After all, it wasn't the actual spa that ticked me off, it was the corporate reservations
(that is part of the spa experience, however). And, of course, I'll know to check
for promotions before I call and ask if there are any other promotions I should
know about before making a reservation at any spa.
Customers vs. Loyal Customers
One last thing I've observed is
that some spas offer special deals for new customers while never offering anything
for their loyal customers. That is simply annoying for loyal customers. It's important
for spas to reward and recognize their loyal customers (not necessarily with discounts),
but that's another topic.
some other opinions on discounting, SpaBoom offers a couple of interesting discussions
on the subject:
That's my opinion of The
Discount. Thanks for "listening." I am interested in your opinion. Share
it with me at jar@DiscoverSpas.com.
On My Mind Articles
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