When Beth Cruz was in college in Michigan, her friends went to her to get their nails and hair done for free. Years later, when she opened a salon, she remembered that her friends wanted top quality services at as low a cost as possible.
Today, Cruz doesn't do nails or hair for free, but she has one goal in mind with her Beautyclub Petite Spa -- to offer professional spa and beauty services at more affordable prices than her competition.
Cruz says she realized a long time ago that forking over $100 to $200 for a massage was a luxury most people couldn't readily afford. And she noticed another trend among other local spas -- they raise prices to match the "going rates for services." That's created skyrocketing prices that many consumers have begun to complain about.
Cruz's reaction was simple: Offer the same services as competing spas but at prices that reflect the true costs of doing business, plus a small profit. That's resulted in prices as much as 50 percent lower than those of Cruz's competitors.
Since the spa's inception in January 1999, consumers have stood up and taken notice. Cruz's customer base has grown significantly, much of it at the expense of her competitors.
Here's how she's been able to do it.
Quantity without sacrificing quality
Like any good business owner, Cruz strives to offer customers a good deal for their money. At the same time, however, she says that to lure away a competitor's clients, she has to have high quality products and service.
"We require two years experience from all of our employees," says Cruz.
That, she explains, ensures equal comparisons by consumers when looking at Beautyclub's stylists and technicians.
Cruz also noticed that other spas don't offer a lot of space to clients and try to cram in as many stations as possible to maximize revenue.
"We don't want the clients to feel like they're cramped or holed into a closet," she says. "Our massage and pedicure rooms are larger than your normal spa or salon."
Continuous competitive intelligence
As a business strategy, Cruz routinely checks out prices at other spas and salons in the area to compare rates. So far, none have followed her lead and lowered prices.
"We're not seen as a threat yet," says Cruz. "But we will be."
Since her profit margin is smaller than that of other spas, Cruz doesn't spend money on advertising, relying instead on word of mouth to drive traffic. She says her lower prices have given consumers looking for price relief from other spas a place to investigate. As an example, she points to her price for hair color retouching: $30.
The competitors? An average of $60 for the same services.
Think like a customer
When Cruz visits competing spas to see their facilities and peek at their prices, she experiences their operations as both a business owner and as a customer. She asks herself if the facility would make a customer feel comfortable and at peace. She used the same attitude when she designed her own spa.
As an art major in college, Cruz may not have planned on taking care of business, but it gave her an advantage in understanding design techniques. Soft colors and warm lighting make customers feel comfortable and at ease, she explains.
That's not to say Cruz can't think like a business owner as well. She says she took location and accessibility into account when picking the site of her spa -- it's in a high-traffic area -- and every day, she assesses pricing, cleanliness and makes sure her staff is friendly.
These things, Cruz says, will go a long way in helping her expand her business. How to reach: Beautyclub Petite Spa, (440) 808-2772
Courie Weston (firstname.lastname@example.org) is a reporter at SBN.