COVID-19 Crisis: Spa Retail, Gift Card, and Virtual Appointment Opportunities and Concerns

We in the esthetics industry have just come out of (or are nearly out of, in some cases!) stage one of the Covid-19 reaction: shock. We are thawing out of the emotional freeze we initially experienced and pivoting our spa business marketing and business continuity strategies.

But which phase comes next? For many of us, desperation. 

What’s dangerous about the desperation phase is that you will likely be making decisions that impact your spa business financially in both the short-and-long-terms— but you may not be considering the financial implications of the go-to sales and marketing opportunities you’re thinking of implementing for your spa business. This desperation is understandable; after all, most spa owners have only just recovered from the shock of having to close their physical locations until further notice and may not be in the right mindset to deeply consider every angle of their marketing and leadership pivots.

This is especially true because, at the time of publication, information about small business loans, wage subsidies, and other small business and entrepreneurial support worldwide is still at a slow trickle; we are receiving info day by day and many of us don’t have a clear picture of what level of government support we will receive throughout the COVID-19 shutdown. 

Before jumping in, be sure to visit entrepreneur Michael Michalowicz’s recession response guide for the emotional (and strategical) stages you should expect to go through during a crisis. Now, onto our first spa business opportunity (and concern)...

The Benefits (and Hurdles) of Retail Sales

To beat the business crisis curve, one opportunity that spa and skin care clinic owners can jump on is retail sales. While this can indeed be a strong strategy for skin care clinics and spas now that physical locations are shut down, one of the caveats— especially if you are a spa business owner here in Canada— is that some governments are rolling out small business loans in the coming weeks and/or months. The Canadian government, for example, is rolling out a $4000 loan for small business owners that, if repaid by December 31st, 2020, will be forgiven by 25%; another government rollout is the Canada Emergency Response Benefit, which is $500 a week for up to 16 weeks for those who do not qualify for regular employment insurance. 

What does that mean for spa and skin care clinic owners looking to capitalize on retail sales? Well, because many of the details of who will be able to qualify for these loans (as well as when you will be able to apply) have yet to be decided on, keeping an eye on these pending initiatives in order to ensure that you are not undermining your chances of being able to apply for these initiatives by selling retail if that is something you are looking to do.

That being said, if you have had strong retail sales prior to the COVID-19 shutdown then this is an opportunity to go full-throttle with your e-commerce (especially since skin care clinics have a higher average price point than the rest of the esthetics industry!); however, if you are intending to rely on government subsidies or loans— or if your retail sales are a drip rather than a flood— you need to take a step back and evaluate if retail sales are the best sales opportunity for you.

Gift Certificate Sales: Great Idea, or Financial Sinkhole?

In my free spa owners-only Facebook group, Spa Business Mastery, there has been a lot of talk about gift card sales.

The hot take on gift card sales? Although we’ve been seeing a gift card sales boom across the esthetics, restaurant, and fitness industries in order to “support small business during the COVID-19 closure”, I want to stress that this sales approach is problematic.

Why? Because gift cards sales are what I call “short-term bridge financing”. Short-term bridge financing means that, while you will be spending the revenue you receive from gift card sales now, your customers will be cashing theirs in later. Because of this, when it comes time for you to reopen your physical location, you will experience a real cash crunch because the money for the services have already been used up.

If you are a spa owner who is already riding the line or profitability and are concerned about the idea that you may have to permanently close your doors because of the COVID-19 shutdown, you will need to consider how you will approach your unredeemed gift certificates for those who purchased them. Moreover, I don’t recommend spa business owners use gift cards to finance their businesses if they feel that there is a real possibility of having to close their doors for good: marketing ethically and being able to keep your promises to clients during this turbulent time is paramount.

In short? I encourage all gift card sales-related promotions to be used with caution, and to reach out if you need assistance in brainstorming and/or managing your spa business’s advertising during this time.

The Third Pillar of COVID-19 Spa Business Sales: Virtual Appointments

I am personally thrilled to see so many spa business owners jumping on board with virtual offers for their clients during the COVID-19 shutdown; the switch to digital appointments and offers is an overdue addition to the esthetics industry, as spas have been slow to adopt e-commerce and virtual services. 

As with any new service or module, however, there are a few bumps to iron out for many of the spa business owners who I’m seeing offer these services. One recurring red flag I’m seeing early on is how virtual appointments are being positioned: many of them are being offered for free! And this loops back to my caution about the desperation phase— spa owners thinking with their reactive brain rather than their proactive brain and, as such, not considering the long-term financial ramifications of their offers.

The issue? Unsustainability. Right now, the esthetics industry needs to reorganize virtual appointments to clearly map out the different possible avenues virtual appointments can take. This is not only beneficial for both debriefing potential new clients and re-igniting interest in recurring clients, but also ensures that spa owners are maintaining the value of the time and effort put into each different avenue.

For example, I see virtual appointments being divided into the following three categories:

• The Free Virtual Consultation: Think of this as a “taster” of your expertise; examples include capping it at 15 minutes and/or covering only a select amount of topics. This pulls double-duty by providing free value to potential clients while enticing them to come again for your paid services or products (as well as guarantees that you won’t be dedicating all of your time to unpaid services).

• The Virtual Consult: A single session or one-off appointment, the digital consult needs to be strictly mapped out (in terms of both time given and topics covered) so that potential clients know exactly how their time will be utilized. This would go more in-depth than the free virtual consultation and would be for an hour or so of your time. 

• The Virtual Program: Arguably the most interesting option, the virtual program is a full treatment that happens over a period of time and has a system in place for delivering your offer. Most programs are between three and six months, focus on your specific expertise (whether that be anti-aging, acne, rosacea, etc.), and deliver long-term customized home care and product recommendations. This would likely be the highest price point because this option would take the most time and effort on your part.

“But Kirsten,” I hear you say, “if I’m not deeply discounting or giving away my full services, how can I cut through all the advertising clutter right now?” While it can be tempting to try and zig-zag around the competition by offering in-depth free services, stating your value upfront will not only serve to be sustainable for your business long-term but will ensure that you don’t burn yourself out by running yourself ragged for no financial gain. Those that are offering free virtual appointments now will quickly realize it’s unsustainable and need to adjust their positioning anyways.

Need Further Sales Help During COVID-19?

Reach out today for private coaching if you want support in getting your business continuity plan up and running amid COVID-19— and be sure to let me know which of the above COVID-19 sales strategies above that you’ll be implementing!