I love spas. I have been experiencing and writing about them for over a decade. I believe in their ability to provide many things that we need in our busy lives - time out, stress reduction, fitness, nutrition, self-care (pampering to some)…the list goes on. I believe in the vision that someday spas could play an active, preventive role in the US healthcare system.

In the past 10+ years, I've seen the US spa industry undergo unbridled growth. I've seen parallel growth of industries supporting spas - associations, conferences, expos, schools, consultants, equipment manufacturers, supply providers and more. I've seen a plethora of new therapies introduced - some efficacious, some silly. However, there is a fact that isn't well publicized and, truth be told, I don't think most want to acknowledge. There are a fair number of spas that go belly up. Of the spas I once included in my database over the last 10+ years, over 30% are no longer in business. Some have been sold and changed names. Some have moved. Most simply closed their doors. Want more proof? The last speaker to send me an e-notice reminding me to attend their workshop at The International Esthetics, Cosmetics & Spa Conference in Las Vegas this past weekend was giving a seminar titled, "How to Sell Your Day Spa: Five Vital Steps to Attract the Right Buyer at the Price You Want!" You can always count on someone to jump on an industry trend. Believe me; they wouldn't be presenting this subject if there wasn't a need or an audience.

At least a dozen of the spas I've experienced and written about are no longer in business. One was destroyed in Hurricane Katrina and not rebuilt. It did not surprise me that the others, all but one day spas, were no longer in business. Generally, their treatments and facilities were adequate but unremarkable. At some of these, the customer service was simply appalling. (Spa 2 in A Tale of Two Spas and The Noisiest Spa in 10 Lessons on How NOT to Run a Spa.

It would be fascinating to do a forensic study on all of the failed spas. What common traits would they show? At first glance, we could say they didn't survive because they were not profitable. But what were the root causes of this lack of profitability? Ultimately, the majority must not have had the clients they needed to survive. Why not? What would their former clients have to say about them? Why didn't more people come? What cautionary tales could be gleaned for other spas to learn from?

More business die of indigestion than starvation.
~Jerry Goolsby~

In the mean time, the spas that remain are in a constant battle to retain their customer base as the market becomes ever more flooded. ISPA's last study to report this information was based on data collected in 2003 where it stated there had been a 25% increase in the number of US spas since the study done two years earlier with a 20% increase in the number of day spas, an increase in revenues and a decrease in the number of US spa visits. While more recent data is unavailable, it is likely the number of spas has continued to grow (probably at a lower rate) and the number of spa goers has not kept pace - more businesses to serve fewer people. Spas, therefore, struggle for differentiation. Some approach this by spending increasing amounts of money on facilities. Some constantly change their service menu looking for their niche. Some believe retail sales will be their savior and sell so hard, clients feel like have escaped when they walk out the door (maybe not to return).

I believe these are all symptoms of a phenomenon identified by Geoffrey A. Moore in his book "Crossing the Chasm." While it was written about the adoption of high-tech products, I believe the same theories hold true for any product or service. Moore's model states that any innovation will follow an adoption rate that roughly resembles a bell curve.

This curve is divided into five market sectors which represent groups of consumers who share similar characteristics as they consider and then adopt new ideas and products. The five groups are:

The most interesting part of the theory to me is the feature called "The Chasm." Crossing The Chasm is a very difficult task that any innovation or innovative company must successfully accomplish to reach wide market success. It is the point at which many businesses fail. It requires a total rethink of what the offering is and what the marketing message needs to be. Here are some of the attributes before and after The Chasm:

I think the US spa industry is stuck in The Chasm and has been there for a number of years. We have discussed it in SpaQuality's education courses since they began. The US spa industry currently serves the faithful Innovators and Early Adoptors but has yet to reach the Early Majority. It is the industry's challenge and responsibility to offer services and facilities that meet real consumer needs, are simple to use (accessible, affordable), provide value, can be a meaningful part of a lifestyle and are barrier-free (easily understood, non-threatening, trustworthy, safe, consistent). Until The Chasm is crossed, individual spas will focus on the competition when they should be focusing on cooperation (see Linda Bankoski's article The End of Competition As We Know It). According to Moore in his book Inside the Tornado: Strategies for Developing, Leveraging, and Surviving Hypergrowth Markets, on the other side of The Chasm, The Tornado awaits - a make or break time period where mainstream customers determine whether the product or service takes off or falls flat. Spas must be up for that challenge and be able to survive that scrutiny.

At an individual spa level, I suggest ensuring the basics are in place. A business will succeed if it offers value to its customers and its customers become the its advocates. Is the spa offering services and facilities that the local spa-goers (pre- and post-Chasm) value? How does it know? Has it asked them? Does it collect information from its Guests that it can actually use (see Linda Bankoski's article Actionable Feedback: The Key to Guaranteed Results)? Does it deliver excellent spa experiences consistently? Every time? Regular spa-goers are the first to notice differences and gaps. To make sure that the spa has the basics in place, a self-evaluation of the basics using The International Standards of SpaExcellence^SM is an excellent starting point.

I want the US spa industry to continue to grow and prosper. I want the industry to cross The Chasm and survive The Tornado. I want spas to become part of everyone's lifestyle. This will happen when spas know what the spa-goers and not-yet-spa-goers believe is valuable and how they recognize that they can trust the delivery of this to meet their needs.

This article was written by Julie Register, Owner of DiscoverSpas.com and Managing Director of Operations for SpaQuality LLC. It is SpaQuality's goal to offer Spa Owners and Managers - through education, standards, assessment and certification - a framework to achieve a Sustainable Spa Business with:

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