• Beauty, health and fitness industry - expected to grow into a $1 trillion business by 2010
• US spa industry - a $11.2 billion-plus industry, which makes it the fourth largest leisure industry
• US market for anti-aging skin care products - valued at nearly $2.5 billion

• United States - In the US, the demand for natural products in cosmetics and personal care is projected to increase 7.5% annually to $1 billion in 2008. The US experienced the largest number of natural or organic launches in 2004 at 1,022.
• Europe - Western Europe is the current leader based on product sales. Body care is its largest market at $3.3 billion. Anti-cellulite is its fastest growth market, expanding 112% between 1997 and 2004.
• Japan - Japan has the second largest skin care market in the world. Nutraceutical beauty beverages also are very popular in the East. One popular nutraceutical drink, Kaigen Fushin-san no Biyo Sogo, has a tagline that reads "drink to make a beautiful face."
  
• China - China's $6.3 billion cosmetic market has averaged 20-25% annual growth over the last five years and is expected to reach $36.2 billion in sales by 2010.
• India - Herbal is big in India's personal care market. Basic products such as toothpaste and creams often contain natural ingredients.
  

Trends:

• Men - The number of men visiting spas is up 25-30%-this equals the numbers for men having plastic surgery.
• The Next Growth Opportunities in Nutritional Supplements - Savvy manufacturers will seek to market new supplement formats (beyond pills) and we will continue to see the proliferation of condition specific supplements and the clinical science to back them.
• Premium Personal Care - The growing market for natural and organic personal care products join forces with an increasing number of consumers seeking premium personal care products and benefits beyond their traditional use.
  
• Ingredients - General
  
  • Natural products are all the rage on the spa menu - aloe vera, lime, coconut, mint, cucumber, ginger, papaya, lemongrass, coffee and even chocolate. This leads into the trend toward mind/body wellness.
  • Ingredient/Nutrient Drivers - 2006 will see the continued propagation of specific ingredient/nutrient platform drivers across food/beverage and supplements, including, for example, omega-3, protein, gluten-free, low sodium, pro-biotics, and others
    
  • Consumers of naturals and organics are looking for a more sophisticated connection to their purchases
    
  • The Natural Marketing Institute (NMI) has stated that 28% of the general population desire natural personal care products fortified with functional ingredients.
    
• Ingredients - Specific
  • Algae Extract - potent cosmetic active ingredients that make it possible to create biologically active polysaccharides that demonstrate effectiveness in protecting microcapillary integrity.
  • Emu Oil - reported as useful in transdermal delivery applications, data suggests that the delivery of nutrients by emu oil might be greater than other delivery systems.
  • Marula Oil - also known as "the wonder oil," marula oil is extracted from the seed kernels of the golden fruit of the marula tree. A rich source of oleic acid-which helps in preserving the health of the skin and in minimizing moisture
  • Monk's Pepper - berries from the monk's pepper shrub-also known as the chaste tree from the Mediterranean region-are said to contain an endorphin-based ingredient that returns natural ingredients to the happy toiletry concept. In natural medicine practice, this berry has been used for centuries to regulate women's menstrual cycles and to relieve PMS, which supports the endorphin statements. It also is suggested that this berry stimulates cell growth.
  • Rooibos Extract - a quote about rooibos extract from one industry source offers an impressive claim: "New spa treatments for anti-aging use rooibos extract from South African red bush that has powerful antioxidant ingredients-50 times more effective than green tea."
  • Seabuckthorn Oil - appears to be an ideal ingredient for skin care. Derived from a wild bush that grows in poor arid soils, such as those found in the Gobi Desert, Tibetan and Mongolia. Seabuckthorn oil traditionally has been used in wound healing and is said to counter the effects of sun damage. The oil is processed from seeds and berries, and is the best-known source for a bevy of vitamins, including vitamins C and E, as well as beta-carotene. It also contains essential fatty acids; amino acids; flavonoids; and omega-3, -6 and -9, as well as more potassium than sodium. The high content of its fatty acids is important to the claim that it can restore skin tissue. This ingredient is useful in anti-aging and sun care products.
  • Tomato Extract - new active ingredients are being derived from colorless carotenoids in These colorless carotenoids are said to have antioxidant, UV-protective, anti-inflammatory and anti-mutagenic properties.
    
• Watch List
  • Delivery Systems - Lancôme has introduced its Platinéum Hydroxy(a)-Calcium complex with a delivery system that includes cyclodextrins containing a bioassimilable-or easily absorbed-form of calcium, ginseng and yeast extract to reach targeted areas of the skin. Another form involves inducing microchannels into the skin for enhanced delivery of naturals. (Bryan wonders about the regulatory effects of molecules getting smaller and penetrating below the epidermis.)
  • Terms such as "holistic," "chi," "increased skin energy" and "euphorialike feelings" are new buzzwords in products and raw materials today. Therefore, along with the physical benefits of a product, consumers can expect psychological ones, as well.
    
• Treatments
  
  • Body Treatments
    
  • Indigenous Signature Treatments
    
  • LED Treatments
    
  • Personal Skincare Devices (going to be BIG!)
    
  • Non Invasive Treatment

  Bryan noted that, while the environments surrounding treatments in Asia are different than those in Europe and the US, the treatments themselves are similar.

Brand & Market Position

• Who are You? (Mission Statement)
  
• What is Your USP (Unique Selling Proposition)?
  
• What are Your Businesses' Features and Benefits?
  
• Who is Your Target Market?

  It's all about what you do for your client. Build client relationships by helping your client be successful. A side benefit will be that you will be successful, too. Bryan introduced the POGO concept for building good customer service -

  • Personable (find out about the client)
  • Organizational (find out about the client's career and professional life)
  • Goals (what results are the clients looking for? - Note: these can be unrealistic.)
  • Overcome their Objections (clients can fear the unknown and may have objections to treatments due to lack of information - provide that information!)

Building Your Team

• Hiring is Hard
  
• Incentives - People thrive when they can earn more when they work more. Tie incentives to productivity goals to grow your business.
  
• Accountability - Make prebooking, upselling, asking for referrals and recommending products part of the job description. Set benchmarks, set by-whens and TRAIN so they can achieve these goals.
  
• Motivation - Know what motivates each individual. It's not necessarily money. It is most likely recognition. Some like the spotlight. Some like quiet acknowledgement of a job well done.
  
• Goal Setting - Identify criteria and create protocols that grow your business.
  

Extraordinary Client Experience

• 4 Keys to Success
  
  • Retail - Only 2-4% of skin and body care products are sold at spas. Most are sold at department stores, drug stores, etc. This is a big opportunity. A spa can make 25% profit on a brand name product - pretty good. But, it can make 300-600% profit on their own private label! Utilize products as incentives. Get clients used to using them at home. Clients that take home products are 60% more likely to return to the spa.
    
  • Referral - Incent your clients to refer their friends and acquaintances. For example, offer a $25 discount for the new client and the same for the client that made the referral.
    
  • Pre-Booking - This is critical. 75% of your clients should pre-book so you can forecast your numbers. Encourage a visit every 4 weeks.
    
  • Role-Play - Conduct meetings to teach staff what to say to overcome objections from clients (to buying retail, booking treatments, etc.). Help your staff overcome the fear of rejection. It is much easier to keep and grow your current clients than get new ones. Keep it personable, not personal, between staff and clients. Teach techniques like not asking yes/no questions, asking WHICH products they want to buy (not IF they want to buy). If you put out 5 products for your client to purchase, they will likely choose 3. If you put out 3, they will select 1.
    
• Attention to Detail
  • The Tone of the Visit - Create a wow factor. Examples might include serving wine and cheese, providing a limo service and providing sample bags for new clients (stocked with samples from your vendors). Give them a reason to return.
    
• Indulging Your Client's Five Senses - Effectively engage your client's senses with beautiful visuals and textures. Provide inviting, soothing and relaxing decor, comfort and cleanliness. Clients will not return if they perceive a facility is not clean - including retail.
  
• Clients Invest in a Experience - Consider building take-home retail into a client's first treatment, so they will continue their experience after they leave the spa. It takes 3-4 visits to consider a client "retained." Build the relationships with your clients. They look for effectiveness and authenticity.

Durocher Enterprises, Inc. is a coaching and consulting firm specializing in working with the manufacturers, professionals and consumers who make the beauty and personal development industry tick.

• Independent Contractors - Not recommended.
• Booth Rental - No quality control, no teamwork.
• Commission
  • Most common
  • Typical range 40-65% of service, 10% on branded retail
  • + Easy to manage, simple to understand
  • + You don't have to pay people unless there's a sale
  • + Encourages higher sales by techs
  • - Eats profits
  • - Forces clients to pay higher prices
  • - Only source of pay increases exept higher volume or bigger cut
  • - Price increases are automatically shared
  • - Does not reward teamwork
• Salary + Commission - Relatively new. Works well. Example - $8-12/hour plus 10-20% commission on services and retail. Good if the spa is busy. Cash intensive at the beginning.
• Salary + Incentive or Bonus - Mainly for management. Incents managers to control costs and increase volume.