Since mid-2009, I’ve had the opportunity to witness first hand the evolution of a promising, upstart spa in the greater San Diego area. I was initially introduced to the founder in February of that year to offer insight on a potential acquisition partner and to provide an objective overview of the team’s key leaders. Although that lifestyle niche was new to me, it was quickly apparent that the spa was anchored in strong business fundamentals, had a solid balance sheet and a talented team of committed professionals.
So, after careful deliberation, we mutually agreed that growth was far more appealing than selling – but we’d have rethink our approach to marketing. As with any new business, incentives and specials captured attention and drew the initial wave of customers – but because they occurred so frequently, they represented 90% of the revenue during the first five years. At the beginning of year six, however, we decided to take a different approach and minimize incentives. Instead, we agreed to reward loyalty be hosting one event per month where each repeat customer would receive a 20% discount on any new service or product.
Within three month, business grew by 63% with the majority being repeat purchases. In the book, Do It! Marketing, David Newman argues that new businesses spend far too much time and money on branding and not enough time marketing, and here’s where they fall short: