Many minority-owned businesses do not get the opportunity for major growth and scale because there are so many unique challenges facing them early on in their business. However, if one is more strategic and establishes a foundation for their business and commits to various support mechanisms, success tends to be more attainable.
It is important to recognize that all of the concepts and strategies shared in this article and in my other articles on massagemag.com do not apply only to minority-owned spa businesses; however, this type of information is not generally shared with minority-owned businesses, and so those business owners’ access to information and understanding of what is required to start, grow and sustain a successful business is oftentimes limited.
Once you have set your business on a solid foundation and committed to the investment of time, energy and money to various methods of support and development, your business should be ready for exponential growth and scale.
In this article, we will explore five ways to successfully grow and scale a minority-owned spa business. It’s time to soar!
Level Up Your Minority-Owned Business
Truthfully, there are many more than five ways—and these five ways could even be broken into subtopics. However, it is important to take decisive action in a focused manner to achieve growth, then assess and optimize your processes before launching into a new method of growth.
These five ways will level up any spa business, and are a good place to start for minority owners as they are tried and true methods of success.
They are:
- Strategic eventing
- Referral programs
- Loyalty programs
- Memberships
- Franchise business model development
Strategic Eventing
Many minority-owned spa businesses start as solo practices. Therefore, in addition to growing a business and diversifying service offerings by co-working or hiring team members and staff, one of the best ways to grow and scale the business is through what I call strategic eventing.
Strategic eventing cannot be limited to only hosting events, as that model doesn’t work for every business. The strategic part of strategic eventing means you consider a schedule of offerings that are not your regular services—so they are events—and you do so based on opportunities that are inherent to your unique situation as the business owner and the needs and pains of your ideal customer.
For example, if you have a great space and location that affords you an opportunity to host classes and events, you can invite people who would be your prospective clients or customers outside of your normal service hours. You can create a calendar of events you host or co-host to allow prospective clients to come and enjoy your space and learn what you have to offer—from another angle. You would then invite them to come back and enjoy the customary services you offer.
In this instance, it would be helpful to offer some sort of booking incentive to convert your event guest into a spa client who enjoys your services. However, if you do not have a great space or location, you can still strategically do eventing. This might mean creating pop-ups in other spaces, or being a guest speaker or presenter within your community or online, on topics that allow you to share your expertise with an audience aligned to becoming your customers.
Finally, strategic eventing could mean that you sponsor events aligned with your prospective customers so your brand is featured and presented in a prominent way, whether you have the opportunity to speak or not.
When the brand is the presenter, so to speak, you will want to use brochures or digital media to encourage event attendees to become customers with some sort of offer or incentive. You will also want to create a tracking method to be able to assess the return on your event investment. This will help you understand which events are best to support in this manner and which are not.
One of the best things you can do to grow and scale your business is maximize word-of-mouth marketing with every single customer you work with. One of the best things to keep in mind is that once you have converted a prospective client into a customer, it is highly likely they know a network of people who think and feel like them, and who would also appreciate the opportunity to have services with a massage-or-spa professional like you.
Referral Programs
In this world of social media and influencer hype, many people forget that authentic word-of-mouth referrals are still one of the best methods of marketing. Therefore, creating a program that allows you to turn your best customers into your fanatics and ambassadors, with an assortment of rewards, incentivizes them to share the good news about your business with their network.
According to a study by Wharton School of Business, referred customers have a 16{6b2fa08d5993bc7e76ffaca7a3a295e96a3274ffb0576a302ceddffe26335ebd} higher lifetime value than non-referred customers and have a 25{6b2fa08d5993bc7e76ffaca7a3a295e96a3274ffb0576a302ceddffe26335ebd} higher chance of making a repeat purchase. Further, referred customers have a 37{6b2fa08d5993bc7e76ffaca7a3a295e96a3274ffb0576a302ceddffe26335ebd} higher retention rate than non-referred customers, meaning they will stick and stay with you, according to a study by the American Marketing Association.
Referral programs usually are not very expensive and are a very cost-efficient way to acquire new customers, since you are leveraging your existing customer base to bring in new business. Referral marketing is very effective and sustainable for even small businesses because it’s based on trust. Customers are more likely to trust recommendations from their friends and family members than they are to trust traditional methods of advertising and social media posts.
One of my favorite referral programs I used when I was building our boutique brow business with a former business partner, years ago, was a program we called 5for5.
We gave our customers business cards with a 5for5 graphic header and a blank line on them for them to refer to someone in their network. It had another line to write their own name and a third line for an expiration date. This small piece of cardstock essentially became equivalent to $5 in cold hard cash.
For every person who redeemed it before the expiration date, our fans and ambassadors earned $5 off any service. This meant they were intentional about who they referred to us, because they needed to have the person come in for service before the card expired. This also meant they could bank up their 5-for-5s and use them toward any product or service on their repeat visits.
5for5 created a win-win-win situation for our business, for our loyal fans and for our new customers who quickly became loyal fans themselves. It is important to note that we had to provide stellar customer experiences for this promotion to continue to grow our books.
Loyalty Programs
When you pay attention to how the best brands and businesses continue to grow and scale their customer base, loyalty programs are present nearly every time. Rewarding and incentivizing customers to become frequent shoppers of your business pays dividends because the rewards and incentives encourage them to spend more per year with you.
According to a study by Accenture, loyalty program members spend 12 to 18{6b2fa08d5993bc7e76ffaca7a3a295e96a3274ffb0576a302ceddffe26335ebd} more per year than non-members. An additional benefit is that a loyalty program actually enforces even more brand loyalty—thus the name. This means when great offers come in from your competitors, often the presence of your loyalty program encourages your customer to stay with you instead of leaping to the next best thing.
Loyalty programs can be a powerful tool for a massage-or-spa businesses to increase customer satisfaction, retention and revenue—some say by as much as 25 to 95{6b2fa08d5993bc7e76ffaca7a3a295e96a3274ffb0576a302ceddffe26335ebd}. By offering incentives like free products, swag or events for repeat business, while demonstrating your appreciation for your customers’ loyalty, you also build a strong brand reputation in a competitive and noisy marketplace.
Memberships
Offering membership programs that provide discounts or exclusive benefits encourages customers to spend more money at your spa. This is another program that increases the lifetime customer value and your income over time.
Membership programs are also an excellent way to create a predictable revenue stream. By offering monthly or annual memberships, you can better forecast your revenue and plan for future business growth. They also can be an effective and inexpensive way to market your spa business, especially when they are integrated with the referral and loyalty programs mentioned above.
In order to make membership programs effective, it is imperative to optimize the customer experience so members receive personalized services that increase their customer satisfaction ratings and loyalty to your brand over time. Memberships can be as varied as spa businesses. A few common examples are:
- Monthly or annual memberships, where a set number of services or treatments per month are offered at a discounted price, but also offer an additional value.
- VIP memberships that provide members with such exclusive benefits as early access to special events, content, complementary services or amenities, or preferred booking times.
- Memberships that can be crafted around certain affiliations, such as families or organizations. This could be membership of a certain group where you offer family-friendly or group-friendly services, such as to teachers or service workers, with special rates given.
- Membership around a special social cause or initiative you want to support, where a fee paid by members ties into a charitable donation, and members are offered product or service savings or special accommodations as a spa customer.
- Company or corporate memberships, where there are special rates or benefits offered for businesses and their employees.
It is important to determine the goal of the membership as well as the needs of the target audience to craft a membership offer that will allow you to consistently enroll new members while offering ongoing value to retain members and reduce churn, which is the term that is related to an anticipated percentage of a group that will leave over time.
Franchise Development
According to the International Franchise Association’s 2019 Franchise Business Outlook report, approximately 19{6b2fa08d5993bc7e76ffaca7a3a295e96a3274ffb0576a302ceddffe26335ebd} of franchisees are minority-owned, which includes African American, Hispanic, Asian and Native American owned businesses. This percentage has been steadily increasing over the years, and many initiatives are aimed at promoting diversity within the franchising industry.
There are many successful spa brands that are flourishing as individual businesses that could benefit from becoming franchisors. In order to create a business that can be sold as a franchise, you must create a business model that can be replicated by others. You must come to operate your business and document all of your replicable processes and procedures that create your predictable successes.
This means you must develop a business acumen that covers all aspects of running your spa business. You should establish a strong brand, protecting your intellectual property and deciding which aspects can be used by others.
When building a business to franchise, your commitment to have established a solid foundation will be important and you will need to hire legal and financial experts to assist you in documenting all of the elements of your successful business model in order to make it attractive to sell to franchisees.
Many initiatives that exist to support more minority franchisors provide legal and financial resources and assistance to prepare the essential documentation for a successful franchise business model. Unfortunately, many minority-owned spa businesses do not think becoming a franchise is an option for them because of their limited access to capital and other resources that would help them understand the process.
However, a franchise business model is an excellent way to grow and scale a brand in the spa industry.
This Advice is for Everyone
There are really no limits to what can be achieved in the massage-and-spa industry when you make informed and educated decisions, have the proper support for professional and personal development, and evolve business acumen to allow your massage practice or spa to new heights!
About the Author
Toshiana Baker is an esthetician, spa educator and spa consultancy owner. She founded the Network of Multicultural Spa and Wellness Professionals (nmswp), which supports multiethnic and multicultural health care professionals and minority-owned businesses with education and other resources. She is also CEO and founder of SpaWorx. Her essay titled, “We Must Create a Community of Belonging,” was one of the articles in the August 2021 Diversity, Equity & Inclusion issue of MASSAGE Magazine, a first-place winner of the national 2022 Folio Eddies Award for editorial excellence.