Is Luxury In or Out for Spas?

Buying luxury for yourself may be “out” right now. But gifting luxury is definitely “in!”

That was my “ah ha” moment at the SpaExec event here in New York a week ago. Nancy Griffin, from SpaTrade/Questex, helped put together a solid program at the International Esthetics Cosmetics and Spa Conference IECSC. She had invited Leo Reneghan, Phd., a former professor of hers from Cornell, to share insights from his work in marketing and messaging.

Dr. Reneghan is a consultant now and one of his clients is McDonald’s. Apparently he works for them and other clients on messaging and wording for their food menus. It seems that wording can influence sales to a great degree. Companies can earn millions of dollars in extra revenue by simply wording things in such a way that gets the customer to select the item they want them to select (that would of course be the one where they make the most profit). I found some of his examples fascinating. Here is one that was pretty clear:

If you are selling pizza and your sign says:

Guess which pizza most people select? By far – the medium one for $10.00.

Now, if instead your sign says:

Guess which pizza most people select? By far – the large pizza for $12.00! Since you provided a reference point and helped the customer do the calculation and see the value in the larger pizza, the decision became easy for the customer and you got your extra $2.00.

He went on to give us his opinion about the use of the term “luxury” in spas these days. Some people are saying that luxury is taboo due to the recession and the “AIG effect.” Well, apparently that is true if you think of spa as a luxury. So he suggests a change in reference point.

People are stressed. They know they need to take care of themselves. But they are also giving up conspicuous consumption. So we have to help people re frame their decision. “Spa is no longer a luxury but a necessity” is the better message he suggests. Many of us in the spa industry have been saying that for years – and we know it is true – however it was really fascinating to hear him come up with this from the sales point of view.

We as individuals can also benefit from this change in language. Women (and men) whose lives are more frazzled than ever would have an easier time deciding to have a revitalizing and relaxing massage for their health than indulging themselves with a pampering treatment. And when talking to others (such as a non-spa-going spouse) I need a massage sends a very different message than I want a massage.

Interestingly, when it comes to giving, the word luxury is still very much “in.” Take Mother’s Day for example….with everyone pulling back and the extra stress people are feeling, gifting a spa gift certificate (or a spa treatment) for mom is not being criticized at all.

He ended his talk by recommending a book (which I immediately ordered) called Predictably Irrational by Dan Ariely. Can’t wait to learn how they get me to buy the right size popcorn at the movies.

**Twitter: http://twitter.com/susieellis for other occasional “ah ha’s” in 140 characters or less.