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All right, my dears, welcome to the Spa Marketing Made Easy podcast.

I am Daniela, and today we are diving into a topic that I know is on your mind right now, and that is rising cost. So we actually put a poll inside of the Spa Marketing Made Easy Facebook group. If you’re not in there, go join in there. And we said, hey, what do you want us to do some content about? We’re looking at our editorial calendar, and this came up with the highest percent of votes. So how are we going to cut costs without cutting the experience? And we’re seeing right now from skincare to shipping fees to payroll, everything in between, everything that it takes to operate your business. Inflation is touching every single corner of our industry, and it’s not just our industry.

So normally, we will see brands increase prices sometimes, sometime between October and January, and that’s normal, right? You are expected to get a letter from your skincare vendor that says, hey, you know, here is the, you know, updated menu of or product listings and updated prices. It’s usually between two to 5% it is a small increase. And in fact, it’s actually a smart business move that you should be doing as well. All businesses should be increasing their prices by two to 5% every single year in order to keep up with inflation.

But what’s different about this year, this year, in just the past couple of months, and as I’m recording this, it’s mid July, and in the past couple of months, we have seen some pretty big brands increase their prices mid year. So this is because of inflation, this is because of tariffs, right? This is because of the supply chain issues. There’s a lot of things going on in our world where that’s causing these prices to go up. I’m curious if the prices are going to go up additionally in the normal time frame. So we’ll have to wait and see for that.

I know it can feel overwhelming, right? It feels like, Oh my gosh. I feel like I’m just constantly chasing expenses, but I’m afraid to raise prices because I don’t want to lose my clients, and it’s so much harder to get clients on the books these days, right? So I was actually on a coaching call last week with one of the gals in our growth factor beta program, and she had already increased her prices three times this year, and when we were looking at her number, she actually did need to increase her prices again. It was going to be really challenging for her to support her business without getting her prices to the place that they needed to be to cover her expenses. That’s hard, right? I’m not gonna be here and pretend like it’s easy.

There’s a lot of challenging things going on in this kind of constricting market, but my goal for you by the end of this episode is to have clarity and confidence on how you navigate this market and the changes that we are going through by making a few strategic shifts.

Now, before we get into that, if I could ask you just a little favor, this is a it is a challenging time, and I would be so incredibly grateful if you would share this episode with a friend in the aesthetic space, maybe that means sharing it in a group or forwarding an email to your SD bestie, this moment in time is huge, and the more that we can help and support one another, the better.

This is different than a recession or an economic downturn. Again, we’ve got inflation, we’ve got economic and geopolitical uncertainty. We’ve got major shifts in consumer spending. We’ve got AI advancements at such a rapid pace, it feels like once we learn something, it’s already something new coming out.

There’s a lot going on, but, and this is a big but, this is a huge opportunity. I want you to see that this is an opportunity for the spa CEOs who choose to streamline their operations, to lower their operating cost, to build deeper relationships with their clients and to incorporate AI into their businesses. Businesses will close. There’s no sugarcoating that businesses will close. Many already have, but the ones that make it through are going to be more efficient, more profitable. They’re really going to thrive, and I want that for you.

Okay, so let’s go ahead and dive in. All right, so the first thing that I want to talk. Talk about is knowing your numbers. That is just when we’re looking at pricing, there’s no way that you can choose the appropriate price without knowing your numbers. Guessing is not a pricing strategy, okay?

So this means knowing your cost of treatment, and I mean on a granular level. So we’ve got to understand the profitability of the service so that we can truly know, is this service? Does it make sense for me to offer this in my business? We’ve got to understand client acquisition cost. So how much did it cost me to bring that new client in? You know, it can be one price from social ads, you know, that type of getting a new client from there, it can be another price from SEO. It can be another price from client referrals. It can be another price from strategic partnerships.

So we really want to understand which lead flow source is giving me the most cost-effective  way to get new clients in the door that alone can be absolutely huge on where you focus your marketing. Okay, they’re going to help you. These KPIs, key performance indicators are going to help you to make data-based decisions. And data is the Language of Business. Okay, we’ve got to be able to speak that language to be able to understand what our business is trying to tell us. All right, that’s going to help you make decisions from a place of power and not from this place of panic.

All right, segment section number two is going to be adjusting our prices intentionally. So once you know your numbers, and we’ve gone through on a granular level, we have this document called the cost of treatment and profitability tracker that we share with our students, and it essentially goes through and it’ll be like two pairs of gloves cost this four cotton rounds, eight, four by fours, two pumps of cleanser, like it’s breaking down everything that you’re using, so that you understand the true consumable cost of that service.

Once we know that we have a strategy that a formula of this is what, this is where we need your pricing to be. If this is what it costs you, this is the margin we’re looking for. Okay? And so we have a actual formula that we also couple with the experience that you are providing, right? There’s, there’s more than just the consumable cost that goes into it.

And I know that raising your prices can feel really scary. You’re thinking, What if I lose clients? You probably will. Okay. You can expect to lose 10 to 20% of clients when you raise prices, depending on how significant the change is, it’s one thing to raise prices five bucks. It’s one thing to raise prices 50 bucks. It’s one thing to raise prices 100 bucks. Okay, but here’s something that the spa CEO sees when she lets go of the people who are not willing to pay a higher price, she is creating space for a higher level client.

Okay, so there are absolutely price shoppers out there. That’s fine. There’s chains that do a great job of accommodating them. They are not your competitors. You are a high touch owner, operated local business, not a chain or franchise, okay, you’ve created an experience that delivers results that help clients feel seen, heard and cared for, and that has value. Now I’m not, you know, knocking on the franchises. I think there’s absolutely a place for them. I don’t, I just, I don’t see them as your competition. It’s a different business model.

Okay, so don’t set your prices based on what their prices are. Don’t do the same offers as them. Do the thing that makes sense for you. Okay, so whether you’re updating your menu or introducing a membership, be intentional. Use strategic price points. So there’s a real psychology between behind ending in a nine or in a seven. Just Google why prices are always 99 or 97 and clearly command communicate the value that they are getting.

All right? And remember, if you have not raised your prices in the past year you are absorbing that cost of inflation, your profit margin is going down. So it is time for a change, my friend.

All right, next up, let’s talk about memberships. Okay, and this is something that I’ve actually kind of changed my tune to in the past year. So I used to suggest memberships. I’ve always suggested memberships, but I also felt that there were certain spas that could be fine without them, right? But after the past year, I really changed my approach, and I genuinely believe that all spas, all spas, should have a minimum 10k per month in recurring revenue coming in through memberships.

I just think you lead in a different way as the CEO. If at the start of the month you already know that you have $10,000 coming in, it helps you also to step into the role of CEO, which kind of breaks that cycle that a lot of the spa owners that we work with, I see them in.

So there’s this point, and I’ve talked about this point so many times before when I talk about spa managers, but if you are stuck somewhere between 25,000–30,000 or 35,000 per month, and you’ve just kind of been there for a while. I’m talking to you, okay? This is the point where you really need a spa manager. But you may still need to be developing your leadership skills. You may still need to have a deeper understanding of what it is that the CEO is actually doing.

I can’t tell you how many times I’ve heard incredible women, incredible successful women, but they are just so burnt out, and they’re saying, “I don’t feel like I’m working if I’m not in the room.” And that is a vicious and dangerous cycle to be in, okay, because you cannot lead your business from an overworked and overwhelmed place.

And a CEO is someone who is the visionary of the business, who’s looking five years out, who’s making the strategic decisions about where you want this business to go. Okay, we’re not in the business all day, every day, the CEO is working on the business. Really. Big distinction.

Okay, so memberships are really the starting point that allows that CEO that’s at the 25 to 35,000 per month, that you’re just kind of stuck there when you know that you have at least 10,000 a month coming in and recurring revenue, you can, you can kind of let your shoulders drop a little bit. You can breathe a little bit more, and maybe you start by taking a half day, even that you’re fully dedicated to CEO work, okay? And then eventually we’ll get you to one day and to two days and to three days, and really get you to start to understand what that role takes, and what it entails, and what activities you are going to be doing so that you can work on the business rather than in it.

Okay. Okay, here’s the deal, though. Memberships are only going to work if they are structured strategically, and so we’ve got to make sure that it makes sense in all of our messaging and where we’re positioning it, where we’re placing it, whether it is a front end membership or a back end membership.

So what I mean by that, if it’s a front end membership, it’s something that you’re leading with. You want everyone when they come into your spa, that’s the first thing that you’re going to be offering them or letting them know about. If it’s a back end membership — I see this a lot with, like, Face Reality accounts where they’re doing acne or acne boot camps, and they’re focusing specifically on, like, a customized package to help this individual get clear skin, and then they’re selling them a membership on the back end for maintenance.

Okay? So you’ve got to understand is this front end or back end? You’ve got to understand that your marketing needs to be front and center. Memberships are not a set it and forget it type of thing. You’ve got to be constantly talking about them, nurturing them. There’s a lot that goes into it.

Right? When it comes to the KPIs, we’ve got to understand churn rate. We’ve got to track your member behavior. We’ve got to make sure that we’re re-engaging your members before they cancel, which we understand through kind of our churn rate. When we’re tracking that, we create client journeys for our memberships. There’s all these little touches that really go a long way.

Okay, so let’s move on to the next section here, and that is talking about cutting costs without cutting the experience. So of course, we want to increase revenue, right? But we’ve also got to be really smart about reducing waste. So I want you to audit your expenses.

So are there any subscriptions that you are not using? Can you negotiate with your vendors? Are there opportunities where it would make sense for you to buy in bulk?

In the treatment room, I want you to simplify. Run reports and look at, you know, what are the 20% of services that are generating 80% of the revenue? You don’t need to have 30 different services on your menu. I want you to focus on what is profitable and easy to train your team on.

Okay? We want to look at ways to streamline without compromising the client’s experience, because ultimately, how they feel is incredibly important to their overall experience. They of course, want results, right? But we want to make sure that there’s this component of self-care and connection and relaxation, all while getting a really beautiful clinical result.

Okay, so I want to share a story with you about something that we did in our company over the past year, and I think that this can really help you to understand how to cut costs in a different way than just like how we would in a recession, which is what I just kind of shared.

Like, when we’re going through a recession, which historically happens every 10 to 12 years, if you’re in business long enough, you will go through one. And when we go through those moments, we’re refining our systems. We’re really analyzing what we’re going to spend our time on, what’s a nice to have versus a need to have, auditing all of the expenses, etc.

What we’re going through right now, or what we just did in the past year — because it was about a year ago that I really just dove kind of head first into the AI world and restructured a lot of our business — our company’s really gone through a lot of shifts and changes in the past year.

And one of the things that we really focused on were the softwares that we were using. And not just “Can I negotiate prices?” but “Is this the right software for me?”

And we used a software — we had been using a software called Ontraport — and it’s a really great funnel software. I don’t have anything bad to say about it, but we started using it about eight years ago, and at the time, that was the best thing on the market. That was the best thing available to us. And we were kind of following the philosophy of, if it’s not broke, don’t fix it, right? And so we wanted to just leave it there, because, as you know, if you’ve ever switched softwares, you understand the pain factor that goes into that, right? Like, there’s a lot, it’s a big project to kind of add in.

So we were just focusing on creating our content and working with our clients, and, you know, all of that type of stuff. And we hadn’t really done a deep dive into the softwares we were using and why we were using them. So over the course of the past year, I have researched other companies. I’ve looked at the companies that we are working with. I made sure that we were on the appropriate plans for all of the softwares that we actually were using.

We call this like our tech stack, and went through and I changed softwares. We got rid of Ontraport and found something better that was a 10th of the cost that actually has probably 10 times the bells and whistles of what we’re capable to do and how to do it in a really easy manner.

We adapted our Monday boards — we’re big fans of monday.com as our project management software — but we were able to use them in a more efficient way. We got rid of a podcast software that we use called Podscribe. We got rid of our social schedulers, and we’re scheduling directly in the platform.

There’s a lot of different things that we did that, all in all, ended up saving about $10,000 a year by going through and doing that. $10,000 a year. That is huge.

And I’ve been actually talking to our Growth Factor students about this McKinsey report. A lot of you, if you’re in Growth Factor, I’m sorry. I’m sorry, I’m going to talk about it again, but I read this report by McKinsey, and McKinsey is one of the big three consulting firms, if you’re not familiar with who they are, but they put out this report, and it was about AI integration into the world in general, into small businesses.

And so it was saying that in 2023 about 25% of companies had adopted AI into their operations. And by 2026, 40 to 45% of small businesses will have adopted AI into their businesses, and those 40 to 45% of people will reduce their administrative and HR time by 20 to 30%.

So because we are automating tasks or having AI agents do those tasks for us, we’re able to get 20 to 30% of our time back. Now, the other piece here is that we’re actually able additionally to reduce payroll cost by 25% — those who are incorporating AI.

How do you do that? Well, look at your marketing teams. Look at — you know — unfortunately the marketing industry, there’s a lot of people that will be out of work unless they adapt, right? Because you have to understand how to use AI. But AI can write your social posts for you. They can write your email nurture sequences. They can write your landing page copy. They can do all of these things for you.

So if you’re a spa that’s paying $1500, $2500, $3500 a month for a marketing company, you can get rid of that expense if you know how to use AI appropriately. And that can be huge when we’re looking at month over month over month.

Okay, so when we’re looking at cutting costs, yes, absolutely. You can look at your back bar. You can look at — I know a lot of people that are doing some of the specialty facials, like HydraFacial practices will actually incorporate the boosters. And those boosters, it’s not like a one size fits all. You can’t just put one booster. There has to be like a clear understanding. There has to be a clear price point for those because some of those boosters are very expensive, and it’s fine to use them if there’s an additional upcharge, but if you’re incorporating that into the consumable cost of treatment, man, that’s gonna bite you in the butt.

Okay, so empowering your team. One of the things that we also did in the past — well, I would like to say in the past year, but this was actually a growth opportunity for me. So I realized that I had been diving in to AI in a huge way. And I’d been telling my team, “Yeah, use AI. Use AI for this,” but I wasn’t teaching them how to use it in the same way that I was using it.

And that became clear actually earlier in this year, and I realized that, and I said, “Okay, no, I’m gonna teach my team how I’m using it so that they can feel empowered.” And by doing this, like our goal across the board, I’m expecting 5x productivity from everybody on my team, including myself, because we have the support of AI.

So if you’re going to — and this is something also that’s very, very powerful — your front desk can now be your marketing person, right? If they know how to use AI, if you put the time in to create custom chatbots, it’s as simple as copy and paste, right? I mean, that can be a whole other episode, but there’s just some really, really incredible things that you can do with AI and with these agents that we’re seeing.

Okay? I want you to reframe inflation as an opportunity. Okay? And this is a mindset shift. This really is. Inflation is an invitation to be clearer, to be bolder, to show up for your clients in a more intentional way. It’s an invitation. It’s a gift to help you really become a foundationally stronger, a fundamentally stronger business, a better leader, a better communicator.

There’s — you know that quote, “The only constant is change” — and in entrepreneurship, we’re always having to change and adapt to what the market is telling us, right? Client behavior is changing, so we have to adapt to that. Really focus on streamlining, on refining, on shifting or pivoting, if that’s what you need to do to make sure that you are focusing on the relationship, the needs of your clients, okay? That is going to be hugely, hugely important.

All right, so that is it for today’s episode. I hope you enjoyed it. I hope you got some like, “Aha” moments, some ideas of things that you can start to implement in your business.

Let me just do a quick recap here. I’m just gonna check my notes real quick. So we started off with knowing your numbers, and specifically spoke about cost of treatment, the client acquisition cost, and the average spend that your client does per year. Those are going to be really important KPIs.

We want you to adjust your pricing intentionally based off of those numbers that you caught for yourself.

We want you to really leverage memberships and understand how to incorporate memberships into your spa.

We want you to incorporate AI into not only your administrative HR, even with your numbers — really incorporating AI into those operational aspects of your business, and also empower your team to incorporate AI, but make sure that you’re teaching them how to use it in the same way that you are.

And then mindset is — reframe inflation as an opportunity. Okay? Mindset is such a huge, huge, huge thing.

There are still clients spending money. I know several spas that are having the best year that they have had. Okay? Clients are just spending more intentionally, more carefully.

All right, so just make sure that you’re positioning yourself as someone who wants to build a relationship with them, who wants to serve them in a beautiful way.

All right, so that is it for today. Please share this episode with a friend, and I appreciate you so, so much. I’ll catch you on the next episode.

Welcome back to another episode of Spa Marketing Made Easy. I am your host, Daniela Woerner, and today we are diving into something that is so incredibly important for every spa CEO to prioritize right now, and that is a mid year business review. So let me ask you, how often do you pause and really reflect on your business outside of hustle mode, which, let’s be honest, this year, I know you’ve been in hustle mode more than you would like to admit, more than you would desire, right? It’s one thing to like set goals in January, we’re full of excitement. It’s a new year, new you all this fun stuff going on, but it’s another thing to actually check in with those goals six months later, especially as I said, like life and business and the economy, they’re all kind of throwing us curveballs right in this in this exciting journey that we call entrepreneurship.

So if you’re like, wait, what were my goals again? If you don’t even remember what your goals are, because these six months have flown by, first, you’re not alone. Okay, that’s there’s a lot of you out there that would be raising your hand for that. But second, this is your chance to realign and recalibrate. Okay, I wanted to create this episode to help you do just that. So today we’re gonna walk through five key steps that you can take today to assess your alignment, check your metrics, make informed and empowered decisions about the rest of the year. Remember, every day is a new day. We get to start fresh. This is your clean slate, your blank piece of paper and your brand new journal to realign and reset this year based on what your goals are, whether you’re increasing them or decreasing them, whether you’re focusing, you know, moving full steam ahead with your original vision or your pivoting, okay, we just want to make sure that we are making informed, empowered decisions about the rest of the year. Okay?

And of course, to make it actionable, I created a worksheet to guide you through this process. You can download it in the show notes. There’s a link there. So I want to make sure that you do that, because, again, this exercise is so incredibly helpful. Okay, so why does this even matter? Well, when you’re a spa CEO, especially one with a team clients to serve, and maybe you’re still in the treatment room, your time is stretched. You are in. Just go, go, go mode constantly. And why you may feel like you’re just too busy to slow down and actually work on the business. The truth is this pause, this hour long, pause, right? This is not going to take you more than an hour to really go through. Is what is going to prevent burnout, prevent stagnation, prevent misalignment, and really help you move forward in the right direction.

Now, why mid year? Well, it’s a natural turning point. Right? We are halfway through the calendar year. You’ve got six months behind you, full of data, full of wins, full of challenges, full of lessons, and six months ahead of you, and that makes this the perfect time to reflect on what’s working, what’s not, and what you need to shift. And let’s be real. Okay, the spa industry is shifting. We’ve seen changes to different services, medically assisted. Weight loss is having some shifts. We’ve seen a lot of shifts in scope of practice. We’ve seen consumer behavior shifting. The economy is shifting. Okay? So we’ve got to be nimble. If your goals and strategies are not evolving with those shifts, you’re not setting yourself up for success. Okay? Today’s episode is about reclaiming that power and clarity for your business.

So let’s just start with the big question, okay, what are the top three goals that you had at the beginning of the year? Now, if you’re drawing a blank, here no shame. Go back look at your planner. Did you do some sort of goal setting exercise? Did you create a January vision board if you didn’t go back to your Instagram post and look at like, what were you posting about? What were you talking about? What were you hoping to achieve? Did you launch a membership? Were you trying to hire a new team member. Were you solely focused on hitting a specific revenue goal? Maybe you’re trying to get out of the treatment room identify those goals and ask, Where are you with those each day? Was it something that you just wrote in the beginning of the year because you thought it sounded cool? But you actually didn’t put any effort into it. Was it something that shifted? Maybe something happened in your personal life that changed your goals and desires with your business? So really look at each of those goals. Where do you stand with each one today? Is it still important to you? Is that still something that you truly desire? Are you on track with those things? Have you made any progress? Have you put any effort in and most importantly, do these goals still reflect the life and business that you want, the life that you are wanting to build? Does your business support that?

Because, again, things can shift. All right. Oh, okay, business. I’m thinking of myself. Why I just took that pause, because something can come up personally, whether it’s a health issue with a family member, whether it’s it’s an unexpected curveball that can completely shift your focus. Those are okay. Okay, that’s okay. That is actually the beauty of being an entrepreneur, is that we get permission to shift and change and build the business around the life that we want to live. Okay? So what is that for? You give yourself permission to pivot if the goals are no longer aligning with the life you want to live, I want you to get the worksheet, make sure that you download that, get it out of your head and onto paper. That’s going to make it real. That’s going to make it tangible. Tell a friend, tell your spouse, tell your partner, tell somebody that you trust, and at very minimum, write it in your journal, so that at least you’re getting it out of your head and making it more tangible.

Okay, then you have also it’s documented, so that in the end of the year, when you’re doing your annual review, you can look back and easily see where was your head at? What were you focusing on? What was important to you in business at the midway part of the year? It’s also a great I know I’m kind of going on a tangent here, but one of the reasons that I love this is because, as entrepreneurs, if you’re like me, like it’s hard to we set really big goals for ourselves, right? We have these big expectations, and sometimes we fall short of those goals, and it can make us feel like, Oh, what am I even doing? But then if you go back to your mid year review, or your annual review, you can actually measure all of the things that you accomplished, all of the progress that you made. Right? And it’s often like because we’re not celebrating our wins as much as we should be, we’re not getting to see how much progress we’ve actually made, and how much growth we’ve actually made. I mean, all I have to do is go back and look, look at my very first YouTube videos, which are horrific, by the way, but it’s a great example of, like, just starting and keep going and getting better and better and better, and putting yourself out there and doing the thing, right? That’s how we’re able to measure progress.

Okay, so business is all about numbers, right? That is the Language of Business. So no mid year review can be complete without taking a dive into our metrics. Okay, so we’re not going to look at every single metric under the sun, but just some of the big ones, right? Remember, numbers are neutral. They’re not emotional. They’re just information. It’s just data that we are using to make decisions, all right? This is what you do as a CEO. So what I want you to look at the kind of big ones would be your revenue year to date with your expenses, right? So we want to understand revenue and expenses and profit, okay, so all the dollars that came in, all the dollars that went out, and what is left over after, if you divide your profit into your revenue, that is going to give you your profit percentage.

And so we want to understand, I find it easiest, because revenue and expenses can go up and down, but the most important thing is our profit, and what percentage of our revenue is coming in as profit. So we want to understand where we’re at for the year with all of those things. If you are membership based, we definitely want to look at how many active members you have, and you should, well, you should, I highly recommend using a membership tracker so that you know how many active members you have every single month. What point are they canceling? You know all of the data that you. Need for memberships. Okay?

I believe, you know, I used to say that you get to pick if you want to be membership based or not, as we’re continuing, you know, as this is our 11th year in business now, I am at like, a 99% recommendation for every single spa to have some type of membership, because the recurring revenue is it just helps you lead in a better way. There’s a few exceptions here and there, but for 99% of spas out there, I highly recommend having a membership. So understanding your membership data, how many active members you have? Are you growing them? You know, all of that type of stuff. We want to look at that and analyze that.

And then this one is something that I’ve been paying extra close attention to this year, and that’s your client acquisition cost. So how much are we spending to bring in a new client, and where specifically are those clients coming from? So as we’re, you know, we’re getting ready for Growth Factor Beta or by the time that this is released, we’ll either just be, we might be like in the first week of our Growth Factor Beta program. And one of the things that we’re doing inside of there is a business audit. And so we put together these forms where we’re analyzing the different stages of your business. So our Growth Factor framework is sales, social, system, structure, scale. Okay, that’s what we’ve used for every iteration of Growth Factor. But for this one, we’re kind of taking that initial like pre work section, we’ve revamped it into a full business audit, and in the Google Form, I’m asking specific questions related to sales, specific questions related to social and so on.

And I was going through the business audit of a client who has a really, really successful spa, incredible spa owner, true CEO. And we were looking at, you know, how many new leads came in from SEO? How many new leads came in from social, and how many new leads came in from referral? And it was really interesting, because most of her leads were coming in from search. They were coming in from Google, yet she was trying to put all of her energy and attention onto social and figuring out like, do I need to do ads? Am I doing reels every day? Am I doing all of these things? And it really was able to give us the alignment of like, okay, well, let’s actually take our marketing dollars and invest in search in a way that, you know, we can get that moving. Well, that’s like step one, right?

So step one is understanding where, how many leads are coming from each of those areas. And then am I spending my marketing dollars in the right place? And then is that channel actually attracting my person, because it may be the lowest acquisition cost, but it may not be your person. So there’s this whole process around, how can we really spend our dollars in the right place to acquire the right customer, our ideal client, in the lowest cost possible. So if we’re keeping track of overall like client acquisition cost, we’re going to want to have that data to be able to make those decisions in the future. Okay, so there’s a section inside of the workbook for you to input those into the worksheet.

If any of these numbers are hard to find, then that’s also data for you. That’s information that like, Hey, maybe I need to be tracking these, or maybe I need to clean up the KPIs that I’m looking at, you know, maybe I need to add that as something that’s a regular thing during my, you know, CEO time that I am looking at those numbers, because you cannot grow what you do not measure. All right, okay, so let’s move into the next step, which is where we are really essentially doing a debrief on our business.

We do debriefs after events, right? But let’s do a debrief on our entire business to evaluate what is working and what is not working. All right, so we’re gonna go into reflection mode. We’re gonna really zoom out and look at the bigger picture. What is driving results right now, as far as like revenue, okay, what is getting me the most revenue? What marketing channels are converting? Are there areas where you’re consistently struggling or feeling resistance? So in the case of the spa CEO that I was referring to earlier, for her, she was feeling resistance around ads because she didn’t want to be spending so much time on social. But it was actually when we went in and did the audit, SEO was driving the most results, right?

So we understood that, and that, you know how much time and money and just mental space that is going to clear and save in the future just by knowing that information, it’s huge you guys. Okay, so maybe you’re still doing everything yourself, and that might be slowing you down. Maybe you launched a membership in Q1 but didn’t keep up the marketing momentum. It’s fine, no judgment, no shame. All we’re looking at here is getting curious about our business. Okay, we’re trying to understand the data.

So really reflect and think about where you’ve been throughout this year. How did your business feel for you? Did it feel heavy? Did it feel easy? Did it feel fun? Did it feel light? Did it feel confusing like really get curious, not a right or wrong answer, but list out what is working, what feels heavier, outdated. Is there anywhere that you really want to double down? Is there anything that you actually want to release? I like to actually do this with my team as well, so kind of asking them their opinion or their insight around different things, our last team meeting, I actually said, like, Hey, I normally go through and I, you know, give you our metrics, and I tell you kind of what’s coming over for the next month. And today, I actually just want to have a conversation. I want you guys to I want to hear your perspectives about the direction that we’re going, and are there any blind spots that I’m not seeing because your team, they’re in it with you, right? They have incredible perspectives, but oftentimes they don’t give their perspectives, unless you ask so really important thing to remember there as you’re going through that section.

Okay, so let’s get into CEO time. And really like reclaiming that CEO time, one of the biggest signs that something is off is when you literally have no time to think. So my calendar is such a reflection for me of what’s going on in my life. And like, I’m always working for spaciousness. I’m always working for ease. I’m always really going through my calendar and trying to optimize my schedule. And honestly, this has been something. Just ask Christy, God bless her, who I have been working on this for the past 11 years. And your calendar management is very similar to running a systems based business, because you’re never gonna have your systems done. You’re never going to have your calendar fully optimized, because life is busy, right?

When you have kids that have karate and swim and, you know, birthday parties and all of the things, and you’re doing home projects, like we’re building a big garden right now we just got our chickens. Right? So there’s these other parts of our life, and then we’re trying to plug everything nice and neat into our calendar for us to be super productive within that window. It’s an evolving process, but if your calendar is literally jam packed with treatments, you’re still in the room, you’re seeing clients, yet, when are you supposed to operate the business? When are you supposed to deal with team issues? When are you supposed to address the kind of unexpected tasks that come up in operating a brick and mortar spa? It’s no wonder that you’re struggling to feel aligned with your bigger vision. You haven’t given yourself time to even see the forest through the trees.

Okay, so ask yourself, do you have time blocked off each week to work on your business, not just for your mid year review, like dedicated time, like you’re booking it like it’s a patient appointment. I want that for you, that you have dedicated CEO time. Okay, and ask yourself, are you spending the majority of your time in your zone of genius. Or are you in the weeds? Are you playing like Whack a Mole with your business, trying to put out fires every single day? Or are you really allowing yourself to see the vision, to understand your vision, so that you can create a plan to get there?

Okay, your time is your most valuable asset. And if you are going to make big moves in Q3 and Q4 you gotta give yourself space to plan to delegate to lead. So right now, make a promise to yourself. Do this for yourself. Block off one hour you. Okay, complete this worksheet, review these insights and make a plan for the second half of the year. It’s so critical.

Okay, now comes the final section. Once you’ve reviewed your goals, you have assessed your numbers, you’ve reflected on what’s working, you’ve reclaimed your CEO time. It’s time to decide, What business are you building? Are you refining your existing strategy? Are you reimagining your goals altogether? Really look at am I on the right track, or am I needing to pivot?

Okay, sometimes success is just a few little tweaks away. Ah, we were so we just lost our focus on our membership, but that’s actually our thing. So we’re going to redirect, we’re going to correct our course, and we’re going to dive into that membership. Other times, it’s about choosing a completely new direction that feels more aligned with the CEO that you are becoming. Either one is valid, either one is okay, this is your business. Okay.

What’s most important is that you’re making this decision consciously. You’re not drifting, you’re not reacting, but you are choosing your path forward. Okay, use this to create a clear action plan for Q3 and Q4 what are your top three priorities? What is your marketing focus? What do you need to let go of to create space for growth.

All right now, remember, I created the mid year spa CEO review worksheet. It’s simple, it’s powerful, and it will walk you through step by step everything that we covered in this episode. You can grab it right now by using the link in the show notes. Print it out, do it pen and paper style, my brain works so much better that way. I do everything digital. I know I have that because it’s super important, but everything is going in my notebook. There’s just a different experience when you’re filling out the worksheet.

Okay, so print out the worksheet, make the time to do it.

Block out that hour of time and hey for you like Type A’s make that hour a recurring event on your calendar. Make that the start of your CEO time that you are claiming that for yourself to work on your business, not in your business. Okay, alignment creates momentum, and this review can be the spark that turns your year around.

Okay? You are not behind. You are not off track. You are exactly where you need to be to make your next move. You’ve built something powerful, and it’s okay to pause and reflect and re choose the direction that feels most aligned with your values, your goal and your life.

Thank you so much for being here with me today. Thank you so much for being a part of this incredible community. I will see you next week on Spa Marketing Made Easy. Until then, keep taking aligned action, and don’t forget to download that worksheet.

Hey, Daniela, here and you are listening to the Spa Marketing Made Easy Podcast. We have been producing this show since 2018 and we have hundreds of episodes that are filled with inspiration, education, marketing, strategies and more, all just for esthetic professionals right now in this season, my focus is creating content specifically for spa CEOs who desire to build a profitable, systemized spa that generates a minimum personal income of 100k per year without sacrificing your family time or burning out. If that is you, you are in the right place, my dear, I am so happy that you are here now on today’s episode, we are diving into a marketing budget. Deep Dive with my dear friend and APA partner, Miss Tara Zirker.

Now Tara has been and will continue to be our go to referral partner for all things ads. In fact, I used to pay agencies lots and lots of money, I’m talking like three to $4,000 a month to manage our ads. And that was really until I gained the confidence in myself with Tara support and her program, successful ads club, that I could actually bring ads in house that move you guys saved me about $30,000 a year. Can you believe that? $30,000 a year? And when I think about how much that adds up over the years, we’re talking about six figures of savings, plus, right by doing them in house, we were able to shift and change our ads as we saw fit. Nobody knows our brand like we do and that like, our results started going up higher as well. Was it fun? No, I will be super honest about that. I’m not gonna sugarcoat it. Okay, I did not enjoy the process. But was it worth it 100% you guys, it was worth it a million times. It was a short term pain for a long term gain.

So one of those things that I have absolutely zero regrets on, and if you’re interested in learning how you can either start doing ads yourself, if you have not really kind of dipped your toe in that pool, or if you’re like me and you’re like, gosh, I’m spending so much money on ads, and I just want to figure out how to bring this in house and save myself that much money. Then I want you to click the link below this episode to get registered for a free training that Tara and I are hosting together on July 14. Okay, that was just a little side note, but let’s get back to the purpose of today’s episode, and that is to dive into ADS budgets to really get clear on how much should you be spending on marketing. So we’re breaking it down to marketing in general, and then how much of that should be ads, how much should that be traditional marketing, all of those fun things that we get to play around with and do as spa CEOs.

So I hope you enjoy this episode, and I hope to see you in July at the training that Tara and I are hosting. All right, let’s go ahead and play that interview. All right. Tara, welcome back to the spa. Marketing Made Easy podcast. I don’t know how many times you’ve been on, but I love that you’re here again. And I think that you know talking about marketing, talking about ads, is always something that is evolving and changing and growing as the market and the economy shifts the way that we’re doing things. And so today I wanted to specifically dive into budgeting, because budgeting is such. How much are we supposed to be spending?

How do we you know, I feel like when people pick their ad budgets, they’re just kind of, that sounds like a good number, but, like, I do you see that? I mean, I used to do that all the time, absolutely. And then it was like, Okay, no, if I want to be really strategic and I want to really get into the numbers, I want to look at the percentages that I’m spending specifically on marketing. And it doesn’t have to be all on ads or all on SEO or all on events or referral programs, but we definitely want to take that total marketing budget and then allocate what is working and what is making the most sense right now, 100% and I think the more that you can think of your business and look at your business, your business through the lens of percentages, because how many of us, myself included, that’s how I used to do budgeting, too. It’s just like, I don’t know, maybe this amount, like just kind of guessing your way through that is not your most effective way. So we really step into more of that. Uh, stronger sort of business, the more sophisticated, yeah, more sophisticated business for as we kind of grow and evolve, and when we started, um, really getting into our numbers and really diving into, like, Profit First, and in Profit First, you do everything in percentages, right? It that was, this is probably five or six years ago that I was like, oh, we need,like, a percentage for our marketing budget too.

So let’s, let’s talk about kind of the different stages a business might be in, or a different goals that a business might have, and how we’re looking at like, what, how do we know what a healthy budget should be for those different businesses? I love it, okay, so when I’m thinking about budgeting, I always want to think of my business. You’re thinking of it in kind of three stages of growth, and really, your business is probably going through all three stages of these growth markers every single year. So there’s maintenance, there’s growth, and there’s hyper growth. And so should I just take us through Daniela, kind of each one? And okay, so if you’re in maintenance mode and just kind of think to yourself as you’re listening to us today, like, which, which place

Am I in right now, you’re probably just kind of maintaining your current numbers, you’re covering attrition, essentially. If you know, you lose an average of seven clients a month, you’re just covering those seven clients, and you’re just kind of maintaining your capacity. And there’s certainly times of the year where you might be in that stage. I mean, maybe if you’re a solo Estee, you might just be, you know, maybe summers are a little not only are they slower, just in the spa world in general, but you might also have kids out of school, and maybe you’re just trying to maintain certain, you know, client percentage.

What we see in Spa on average is that you’re going to lose about 20% or patient base or client base every year. And so just plan that you want to add 20% new clients to whatever that active number is, and it’s really important to not get attached to that, because people, people move. People get pregnant, people, people’s financial situations change. People find other locations that are a better fit for them. And all of it is okay. It’s just, you know, if you plan for that average of 20% that’s your maintenance mode that we’re wanting to spend our marketing dollars to recoup to stay at that level. So good.

The next stage would be growth. So this is where you’re looking to grow your revenue and and everybody always says they want growth, but when you really look at it, you know, there may be times of the year where you’re not planning for as much growth, right? So this is like you’re really looking to grow your revenue month over month. And then we go into hyper growth. And this is, it sounds exciting, but listen to what hyper growth is. Hyper growth is when you are this is your cheapest time of the year to acquire clients. So we’re thinking this might be a Black Friday for some of you. Maybe right? You know, as fall starts like these are just periods of time where it’s really easy to acquire clients. I’m also thinking of beginning of the years, another beautiful time for this stage. But there’s a but you are willing to sacrifice perhaps a tiny bit of your profitability in order to have this hyper growth stage where you’re getting a ton of clients and you know, that’s going to pay off long term, right? So you don’t want to be in a hyper growth for longer than two to three months.

You know, your bookkeepers CPAs would get very angry with a suggestion of staying in hyper growth for longer than that. So, and the reason why, and you’re going to hear, when I go through, back through this kind of timeline, or these, these markers again, you’re going to hear the percentages, and it’s going to make sense, why Hyper Growth you’re sacrificing just a little bit of something else in order to get into that stage. So when we’re in maintenance mode, we want to spend, and I would just ask yourself, like, am I overspending or under spending? So this should be pretty easy to calculate, and you’re just basically going to think of your total revenue, and I’m going to give you the percentages of how much you should be or could be, allocating towards your marketing budget at each of these stages.

Okay, so if you’re in maintenance mode, about 5% of your revenue should get you to that point where you’re pretty easily replacing the clients that you’re losing. So we’re just maintaining, if you are in growth mode, you want to be popping that budget up to 10 to 15% of revenue. And that should be fairly comfortable. It shouldn’t be, you know, affecting too many other things. And then when we go into hyper growth, that’s where you’re willing to bump up even a little bit further to 15 to 20% of your revenue. And again, you’re only doing that. You’re doing that intelligently.

You’re only doing that during the periods of time of the year where you just know it is a. Less expensive to acquire customers, acquire clients, than it might be during other periods of time. Like people are just in the mode of finding, you know, their their their spa services for the year, and that’s when you want to capitalize on that hyper growth period. So when you think through that, it should be pretty easy to start thinking to yourself, Am I underspending or overspending? And I will tell you that overspending is rarely the problem. Daniela, would love to hear your thoughts, but for the most part, when I see folks, and we go through kind of their PNL, they’re dramatically underspending.

Typically,I see that a lot in Spa. And I think that, you know, when someone’s first starting out, typically, we see them starting out as a solo provider, and, you know, they’re doing the work in the room. They’re trying to operate and grow the business and or if they’re hiring somebody, they’re either overpaying them or, you know, so there’s they feel like there’s no money at the end of the month. And so to think about investing, you know, 1000s of dollars into marketing, they’re looking at it as an expense rather than an investment. And so that’s why it’s incredibly important to be comfortable with your numbers and really track like okay, if I am doing let’s just say that I have a $250,000 business. I love getting my calculator out here.

Yes, 250,000 so if I break that down, divide by 12, I know that’s not how it all typically works out, but on average, I’m doing about 21,000 a month. If I multiply that times 5% that’s $1,041 a month that I would be spending on marketing. So we may say that we want to spend $500 on ads, and then use the other $500 for your other marketing activities. Well, if you spend $500 on ads and then you’re getting clients coming in, what we have to look at is, what is the client going to spend over the course of their relationship with you as a business. It’s not just recouping that $500 and then saying, Okay, well, they did a facial and then they bought some retail product. It’s what are they going to spend with you over the course of the year? And that’s why it’s, I mean, this is might take us down a different rabbit hole, but I think it’s so incredibly important to know who you are and who you serve before you really dive into ADS, because targeting the wrong person can really lower your retention rate, and then you can feel like, well, ads don’t work. Well, no, it’s that you’re just throwing ads out there to anyone under this, anyone out there, we have to speak our ideal clients language that we’re connecting with them on a deep personal level, that we understand their needs and desires. And so if you have that piece dialed in and know who you are, and know who you serve and what problems you’re solving for that individual, then you’re attracting the right person that’s gonna get you an ROI way more than you know the $500 that you spent on the ads.

I mean, that’s so powerful. And I think there’s even layers of wisdom there. Just in general, so many, so many people, so many business owners of all types, and you know, definitely in the spa world, have targeted the wrong customer, especially when you’re starting out, you’re figuring all that out. You just don’t realize the long tail on that. Because guess what? Those are going to be, who they’re going to bring in their friends, they’re gonna it’s just like it create.

You really want to attract that right avatar. And I think one mistake that people make in our world with ads is they think that you have to do these massive discounts, you have to do attract kind of the lowest paying client, right? And that is not true. We see luxury brands, very premium brands in our world that are targeting very effectively with ads. And really, I think it comes down to, and this is just usually, you know, some self reflection. Now, there’s so many wonderful chatgpt prompts you can go through. It’s really identifying what your unique selling proposition is. What is that unique result that you get for your clients? And once you figure that out, oh, everything becomes so much easier, and definitely your ads.

So how are we going to you know, you talked about being in these different seasons of. Of maintaining or growth or hyper growth. Is this something that we’re looking at when we’re doing our annual plan for the year that, hey, from January, we’re going to have a hyper growth, and October, we’re going to have a hyper growth, or November, depending on if we’re doing an event or Black Friday, and then are we just maybe looking at quarters how we’re mapping? Okay, yes, yes, absolutely.

I mean, I would say generally, we know that there’s a summer sort of slow down. So you don’t want to be usually in any sort of hyper growth situation at that period, because it’s actually gonna cost you more. May it cost you a little bit more. You might be able to maintain kind of a good average, but you don’t want to spend more during that time. And then, yes, I would just kind of look at and your data should tell you, like, When are your promotions the most effective? You know, typically, we’re thinking that kind of, that fall season, early part of the year is wonderful, perhaps an anniversary period. Those are typically periods where it’s like, and hyper growth doesn’t need to be a full three or four months. It can be one month where it’s like, we’re going to increase our ads budget this month, knowing it’s our anniversary month, or whatever it is. And we typically just get a lot of client activity, new client activity, and so we want to capitalize increase the budget a little bit during that period. No, we might see a little bit less profitability, percentage wise, during that month. But that’s okay, because back to what you said earlier, that lifetime value more than makes up for it.

Okay, so we’re mapping this out in terms of timeline of when we’re going to do it. We’re mapping it out. Are we then adjusting our budget based on what actually comes in? Because I know we like to do projections when possible, but sometimes it’s over and sometimes it’s under. So are we just kind of carrying over the budget to the next month and seeing Yeah, and adjusting it in that absolutely okay.

And something, for people that are nervous about this, maybe you don’t have as much data to kind of inform sometimes I’ll say, well, then go with last month. You know that revenue that’s already, that already came in the door, base your base your budget on last month. So if last month, I don’t know, let’s say we did had a $20,000 month, then let’s take, you know, maybe we’re in growth mode. Maybe you want to take 2000 of that. And I think something that we want to pull out here as well, and you mentioned it earlier, is that’s not all going to ads. I know I’m an ADS person, but you don’t want that all to go to ads. An ideal split would be 5050 50% you’re kind of organic, but not organic, but you’re more like analog activities. Maybe you’re sending a mailer. Maybe you are going to be present at a couple of community events, like those things are very, very good. And then 50% goes towards those digital, you know, opportunities, your Facebook ads, your Google ads, things like that. So you want to diversify that marketing budget, but that would be a very, very good way to do it. So if you’re nervous and you don’t really have enough, like, year over year data, then just go based off of last month, or maybe it was, you know, May of last year. If it’s May this year, May of last year, you know. So there’s ways to kind of look at that, so you’re not just, you know, throwing a Hail Mary out there and hoping for the best.

So that’s a great bit of advice for someone who maybe is not budgeting at all. And you know, like, that’s how we get started. So if that’s you like, just take this next step and say, Okay, I’m going to start to start treating my business like a business. I’m going to step in if I want to be a seven figure spa owner, I need to start acting like that now. And that is the way, like seven figure spa owners are creating budgets.

They are out there marketing. They’re testing things that are working for their businesses. The other piece of advice that I want to touch on here, when we get around budgeting and kind of the how we’re looking at how it’s working, I like to keep track of where your leads are coming from. So if your leads, if you have you know, X amount of new clients or patients from Google or SEO, X amount of new patients from ads, and then X amount of new patients for from referrals. You want to also really look at the quality of that lead. And so if, let’s say that you have 50 new people that came in from search, and you have 30 new people that came in from ads, what you want to do, and this would, really, I would love to see this over, like, a quarter basis. Really look. And over like a three month time span, take everybody that came in from SEO and check their retention rate and check what they spent in your business.

Do the same thing for ads and do the same thing for referral. You may have less from ads, but they may be more qualified leads, and so that’s going to help you understand, how do I diversify that budget more if I’m getting better quality leads, then I want to make sure that I am taking my percentage budget and really putting it into the lead source. And this might change. It may change quarter to quarter. So you may have one quarter where ads is outperforming Google and and vice versa. And so it’s really important for you as the CEO, getting into the numbers, looking at these types of things and paying attention to these types of things, because that will make your dollar go so much further and help your business to be more profitable. The one thing that I can tell you for sure about marketing is that it always changes.

It’s the basic concepts are there, but there’s always going to be things that are shifting and changing in how we are getting the attention of our ideal client, 100% yes, that’s so good. And I feel like you don’t need to be a trend chaser, necessarily, but to understand and just keep a pulse on where the market kind of is, what I want to say about that is like, Don’t chase like micro trends, like what you know, what’s popular on trending right now on social media probably isn’t as important as which platforms your client is on, and trace kind of paying attention to or keeping a pulse on those, like bigger trends, right, the macro trends of where people are at, how they’re interacting. I mean, we see things like, I know you talk about this often, but just the the importance of things like Google reviews and how much the client, the customer behavior has changed over the years to where used to be a little bit more. Like somebody would see your ad, they go and kind of do the thing you wanted them to do. But now they see your ad, and there’s several layers that they go through. They go and they Google you, they read your review. So you just have to understand those macro kind of where thing, where your entire online presence, entire online presence, and how people are going from point A to point Z, which is ultimately booking with you so good.

So I know this is a little bit shorter of an episode than we typically do, but I want to keep this really focused on budgeting. And if you’re listening to this and you do have some gaps in your schedule, or you do have some time that you can focus on strategy of your business. This is what I want you to focus on. I want you to look at the numbers. I want you to look at your budget. I want you to see where your leads are coming from, and I want you to create a clear plan so that you know here’s how much I can spend and here’s where those marketing dollars are going, and be sure that you have time allocated to track the leads that are coming in and understand and that can be done through a simple tagging system in your CRM. You want to make sure at the front desk that they’re asking, you know, where did you hear about us? We want to make sure that we’re collecting all of that data that will make you a very sophisticated business owner. That will make you a spa CEO in your business, to really help you build it into a company. It’s so, so important. Tara, anything else that you want to add?

Oh, this was great. I always love being with your community. Daniela, and you know, I would just say, like, just as you start to get really comfortable with these numbers, you’re going to start to feel that you really are able to pull the levers and control the revenue and really your destiny. And so understanding how you’re allocating what you’re investing in and how that’s coming back to you, and not being afraid of it, will start to elevate your skill set as your as a spa CEO, and you’ll be able to control the flow, you know, you will be able to kind of determine, not with exactness, but pretty close, how many new customers you need, how much it’s going to cost you to get those customers and and then from there, things start really moving in really cool ways.

Love it all right. Well, as always, if you want to keep this conversation going, please head on over to the spa. Marketing Made Easy. Facebook group. We’ve got all the information on our free trainings and tons of videos and resources to help. You build your business, we will catch you on the next episode.