To Discount or Not To Discount

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The topic of discounting massage services has come up recently in a couponscouple of Facebook groups I’m a member of (Massage Success Group being one of them). It seems there are two main camps: those who never discount and those who do so freely. Since I believe there are many ways to have a successful practice, the question isn’t whether you discount or not but WHY you do what you do.

I absolutely respect providers who never discount their services. Sometimes, though, this strategy can backfire and create lack instead of abundance. As long as your philosophy feeds your soul and your business is successful, then all is well. If not, consider:

  • If it comes from a fear of being perceived as unskilled or unprofessional.
  • If you’re afraid of being taken advantage of.
  • If you’re seeking a certain demographic only to find it’s not a good fit.

Discounting freely can also be a detriment, especially if it comes from:

  • A lack of self-worth.
  • Fear you won’t have enough clients if you charge too much.
  • A competitive attitude toward other massage therapists.

I discount almost every service I provide simply because it works for my business. My goal is to meet clients where they are because as much as we may not like it, massage is not considered a basic necessity by most of them. The easier it fits into their budget, the more likely they will visit frequently.

I want clients who come in often enough to truly benefit from massage, which is similar to working out. If you only work out occasionally, your level of fitness isn’t going to improve. Getting a handful of massages a year is the least number most clients I’ve worked with can receive while building on the last session’s progress.

By offering a discount to all clients who visit every month (or more) I’m giving them incentive to stay on schedule. This keeps me busy and in demand, which also gets some clients who are slow to commit on board because they can’t get in unless they book ahead. The more appointments I have booked, the more money I make and the more people I help.

Offering discounts doesn’t affect the way clients perceive the treatment you provide. After a lively Facebook discussion about referral discounts, I asked my clients if they thought the massage they receive is a luxury, therapy or both. None of them answered “luxury.” They value the results they get and know it’s important to stay on track to maintain them.

The trick to making this work is to set your regular fees high enough that the discounted price brings in adequate income for you. Clients like to feel special and being a member of this “club” creates that vibe. You can still have price increases or change the percentage of discount as your schedule fills or financial needs change. Clients who love you and whose lives are better because of the time you spend together will navigate those changes as your practice evolves.

One discount I no longer offer is a first-time client discount. I found it didn’t attract enough of the kinds of clients I enjoy and work well with. Instead, I charge my full fee for the first appointment. If the client returns the next month (or sooner), they get a discount on both appointments at their second visit. This generally keeps those interested in ongoing treatment coming (especially Groupon clients).

Regardless of where you stand now, you can always switch sides or find a happy medium. However you decide to run your business, it will serve you as long as your motivation is based on being of service rather than fear. I’m confident in my abilities and honored that many of my clients make sacrifices to stay on their treatment schedule. Providing the best massage I can while giving incentives to visit often is the foundation of the practice that I love!

Do you offer discounts or not and why? If you don’t see a comment box below, click the Leave a comment link to share. Thank you!

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Why Cost Per Client Doesn’t Matter

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If you’ve ever questioned my business philosophy, this may be mad-hatteranother one of those times. One of my clients who is also a massage therapist asked me if I knew my cost per client. My answer was no. At first, I felt like I was dropping a huge ball by being so out of touch with my business. But I decided in that moment that it doesn’t matter.

Cost per client equals how much it costs to provide a massage to each client. Three expenses that determine that are marketing, supply and fixed costs.

  • Marketing costs = the amount spent acquiring customers. This varies by client because not everyone hears about us the same way. If you’re not sure where your clients are coming from, perform a marketing audit. Then calculate how much each category costs by dividing the amount spent on that marketing activity by the number of clients it brought in. (One of the things I love about using Groupon is geting paid for all vouchers that are purchased even if they are never redeemed.)
  • Supply costs = the amount spent on sheets, oil/lotion, essential oils, music, laundry, etc. that are used for each session. This will be fairly consistent even if you don’t give everyone the same massage. Total up what you spent last month for these things and divide by the number of clients you saw.
  • Fixed costs = rent, utilities, phone, taxes, insurance… If your monthly client load varies, these costs per client will as well. These costs (mainly utilities) may also fluctuate seasonally. Calculate them monthly for a year and average to simplify the process.

The main reason to know our cost per client is to determincostse our pricing. We have to make more than it costs to provide our services to be profitable and stay in business. I don’t think cost per client matters because my bills get paid on a monthly cycle, not hourly. As long as I’m making enough to cover my living and business expenses, it’s all good. If not, I need to change something.

If more income is necessary, we have options. With a schedule that isn’t full, the best course of action is to do more marketing to attract more clients. Use your marketing audit to maximize your efforts by doing more of what’s most effective. Implementing a loyalty program may get current clients to book more often. A price increase may be the only way to create more revenue from a full schedule.

If you want to know your cost per client you should, but running your own business does not have to be complicated. As much as I advocate analysis, this seems like busywork to me. I’ve chosen to use my checkbook as my guide. So far, this method has kept the practice that I love going and growing!

What calculations have you found helpful or irrelevant for your practice? If you don’t see a comment box, click the Leave a comment link to share. Thank you!

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Making Friends with Facebook Fan Pages

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When I was preparing to open my practice in 2013, I wasn’t on fb-logosocial media (not even Facebook). Everything I’ve read about marketing since then says something about having a social media strategy. What does that mean, how important is it and how can you do it?

I thought if I had clients following me on social media, they’d share my content and I’d get “referrals” from them. This gave me the idea to offer a social media discount to clients who followed me on Twitter, Pinterest or Google+ (the three platforms I had chosen to use). What I found is that engagement and sharing on social media has declined dramatically as it has become commonplace. After more than two years, I stopped offering this discount because it wasn’t bringing in new clients (it was discontinued when I introduced the Once a Month or More Club).

Last year, I finally created a Facebook fan (aka business) page because Facebook is still the leading social media platform (by far) for women aged 35-49. It seems to be the best place to focus my time and energy since 2013 research indicates, “the highest percentage of [massage] clients are age 35-49” and “More women get massages than men.”

Having a Facebook fan page is expected now, but what do you post and how often? I’ve tried:

The biggest block to a strong social media presence for me is time. As a massage therapist, it’s challenging because I’m working one-on-one with clients all day instead of sitting at a computer. If you have a fan page, you can schedule posts ahead of time using the drop down menu on the “Publish” button. This way, you can set aside a block of time when you aren’t serving clients to schedule new content (that goes to the timelines of those who “like” your page) without having to post in real time each day. Scheduled posts can be seen by clicking the Publishing Tools tab at the top.

fb-scheduled-post

It’s a good strategy to mix up the content of your posts for variety and visibility. If you post obvious promotional content more than once a day, Facebook’s algorithm actually makes it so less people see it. They do this so they can get more business owners to pay for boosted posts or ads. Boosted posts and ads can get expensive because you have to be consistent over a period of time to evaluate their effectiveness. Should you decide to try them, create a budget for three months and stick with it. I’ve only tried one boosted post that didn’t result in any clients but I don’t think that’s enough to determine how well they work.

How often you post depends on your goals. If you just want to maintain a presence, once or twice a month is probably fine. At least new visitors to your page will see that you add something occasionally. If your objective is to build a following and attract new clients, posting consistently 1-3 times a day with some boosting or ads will likely be necessary.

Social media accounts can improve SEO for your business but not necessarily your website. Regardless, any websites that have a link to yours give people more opportunities to check out your practice. They also provide other ways for potential clients to get to know you and current clients to write reviews.

Although I’ve seen lots of attention put on getting likes and followers, they do not equal acquiring clients. To date, I have not had one client tell me they found me on social media. I’m confident this is due to my lack of commitment to regular posting and choosing not to use Facebook’s paid advertising routinely. For now, I’m happy enough with the practice that I love as is, but knowing about these options may pay off down the road!

Have you had success building your practice with social media? I’d love to hear about your experience. If you don’t see a comment box below, please click the Leave a comment link to share. Thank you!

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Achieving Estimated Tax Payment Mastery

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This may be my last post about taxes. Not because they aren’t important but because mastering business taxes isn’t really that complicated. It’s an experiment of trial and error that every self-employed person must perform. My journey through estimated taxes has been trying, scary, daunting and discouraging but I have come out the other side!

My biggest challenge with estimated tax payments has been needing that money to pay other bills. What I’ve come to realize is that if I don’t have enough to pay taxes and support myself, I’m either not charging enough or my cash flow is insufficient (or both). Since raising my prices and moving away from packages to a pay-as-you-go discount for frequent visits, I’ve been able to stay on top of my estimated payments.

Another challenge I’ve had with my taxes has been stashing the money away for three months at a time and not dipping into it (there’s always a car repair, water heater or cat injury that needs immediate attention). I would use savings that were intended for taxes to pay for the unexpected and promise myself to get my savings account caught up before the quarterly deadline. You can probably guess how that worked out.

Rather than paying my taxes quarterly, I now make electronic payments every month via Direct Pay*. This way, I never have a ridiculous stockpile of cash begging to be spent on emergency expenses. I have become more resourceful in dealing with those while maintaining consistent payments to the IRS.

Each week, I add up my deposits and transfer 10% of the total to my savings account before paying any other business expenses or myself. Your situation may be different but this is a good place to start. Then at the end of the month, I make a payment to the IRS directly from my savings account. I have to pay the bank fee for falling below the minimum balance each month, but since this small fee is tax deductible it’s easy to justify.

I expect one more creative financing adventure this year when I file but know it will be so much more manageable than last year. I wish I had started doing this when I began my business. Being free of the stress of owing taxes lets me focus on serving clients in the practice that I love!

Need help with your taxes? Use this FREE Tax Preparation Documents checklist to get organized! Once you sign up, you’ll get a series of emails with tips to take your taxes from to-do to done.

tax-list

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*If you file jointly, apply estimated payments via Direct Pay to the Social Security Number of the person listed first on your return to avoid any glitches. 🙂

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Where Are Your Clients Coming From?

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I’m more of a New Year’s reflection than resolution kind of person. new-yearWhen it comes to my business, I like to review the past year and look for what worked, what didn’t and what I can do differently before setting new goals. Early last year, I went over the previous month to see which marketing strategies had paid off the most (“Top Five Marketing Successes“). This is now an annual ritual.

The process is simple:

  • First, count the number of unique clients (not total appointments) from any given month.
  • Then note how each client came to you. If they were referred, how did the person who told them about you come to you? Work backwards until you get to the original referring client. Everyone they have referred will go into the same category.
  • Next, define five categories. For example, I have all clients who heard about me from promotions I did myself in one category. This includes chance meetings, flyers, promo gift certificates, etc. If these are your main marketing techniques, define five different things you’ve tried.
  • Once each client is classified, add up the number of clients in each category. Divide the number of clients per category by the total number of clients from the month to get a percentage.

Now that we have some real data, we can objectively evaluate what’s working and what’s not. This gives us a clear picture of where we should be spending our time, money and energy to market our practice. The results may be surprising but doing an actual analysis every so often helps us create a marketing plan that will grow the business rather than spinning our wheels.

My results from this year’s review are:

  • 40% – Groupon/Living Social
  • 30% – met previously (another job or my original practice out of school)
  • 13% – self-promotions (promo gift certificates, chance meetings and soliciting a doctor’s office)
  • 11% – American Specialty Health (a third-party health insurance partner that contracts with wellness practitioners for discounted benefits to their members)
  • 6% – Google search

So how does this compare with last year and how will we use this information to create a marketing plan for the coming year?

  • Groupon is still the leading marketing tool for my practice (38% of the clients I saw last month came from a Groupon). Living Social only brought in 2% of the clients I saw last month. Most of the clients in this category either purchased my first deal back in 2014 and are still with me or have been referred by someone who did. I’ve had my current active Groupon deal going since June. It’s higher priced so only sells three to four vouchers per month, providing a nice trickle of new clients. Talk about getting my money’s worth!
  • People I’ve known for a while continue to send their friends, family and coworkers but sometimes these referrals take time to materialize.
  • The only traditional self-generated efforts that are currently paying off for me are promotional gift certificates (three clients last month), chance meetings (two clients) and soliciting a doctor’s office (the office manager has been a regular client for over two years now). The brochures and rack cards I’ve left at nearby gyms and a swim center haven’t generated enough clients for me to justify having them printed and keeping them stocked.
  • American Specialty Health continues to bring me clients even though I discontinued our affiliation over a year ago! The original client I got from them has moved away but one person she told about me has been a fantastic source of high-quality referrals. None of these people have ever paid the ASH discounted price.
  • As of now, my website is on page one of a Google search for barefoot massage Denver (thanks to my website page titles no doubt) but on page three of a search for Ashiatsu Denver (my Groupon deal is on page two). Since I don’t have a more attractive Groupon running, my website isn’t seeing as much action as it was a few months ago. This is important to know because most potential clients are searching the internet to find massage therapists. I’ll start going to my website every day to give it more visits so it ranks higher.

Doing a marketing audit on a regular basis will make your efforts more effective. You’ll know what to do more of and what just isn’t worth it. Staying on top of where my clients are coming from is a simple way to keep the practice that I love growing!

I’d love to hear the results of your marketing audit and how you’ll use what you’ve discovered. If you don’t see a comment box below, please click the Leave a comment link to share. Thank you!

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Do You Need a Loyalty Program?

Having consistent clients keeps you busy and protects your income from fluctuating. Using incentives to get clients to book more often is an excellent way to build a practice (in my experience). Whether or not you need to incorporate a loyalty or membership program depends on how full your schedule is now. If you usually have openings to fill each week this is an easy way to get them booked.

Let’s first talk about discounting our services. There’s the philosophy that in order for our work to be valued we have to charge more. This sounds reasonable enough but when you are just starting out, no one knows how good you are. Offering a deal will bring in more people which will build energy and momentum for your practice while making more money. Working on more people at a lower price will bring in more income than seeing a few people at a higher price. As your practice grows you can reconsider your approach to pricing.

In my last post, I shared my challenges with offering packages as the only discount option for clients. That system alone wasn’t working for me so I added a new frequency incentive. It’s basically a membership program that rewards frequent visits with a substantial discount. I’ve heard about different structures for these types of programs but the result is the same: you will have a fuller schedule and more predictable income while your clients get better outcomes.

This incentive program example comes from one of my former massage teachers. She had a ten-session punch card that she sold for a set amount. Clients received a discount for each session they used on the card and would renew once it was used up. Whether or not you have an expiration date is up to you. This system requires you to have either punch cards printed, use an app or keep records to track visits.

Another system I know of has clients sign up for an annual membership. From the day they purchase their membership, they receive a discount on all visits until it expires. The only thing to keep track of with this approach is when the membership renews. Some memberships offer specials throughout the year as well as discounts on regular visits.

A price increase is the perfect way to introduce an incentive program if you don’t have one now, especially if you haven’t raised your rates in the last year. You can keep your current prices as the membership rate and raise your regular fees. Regardless of what kind of loyalty program chosen, you’ll want to promote it. I sent an email to all of my active clients a few weeks before starting my new program and displayed it on a white board I have in my office. It’s in my brochure as well as on my website. I don’t have a membership fee at this point but that may change over time.

Getting clients on a regular massage schedule gives them better results and balances out your revenue stream. Creating an incentive program guarantees that more new clients will become regulars, period. This easy strategy has been a game changer in the practice that I love!

What concerns do you have about incentive programs? If you don’t see a comment box below please click the Leave a comment link to share. Thank you!

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Getting Clients to Come Back Sooner

Here’s a massage business no-brainer: If clients come in more quantity-discountoften they get better results and you make more money. Sounds simple, right? For some clients it is but others need some incentive to step up their visitation schedule.

The gold standard in the industry is the multi-session package. When I started my practice, I stumbled upon the effectiveness of this gem completely on accident. I was trying different specials each month and was offering three one-hour massages for $99 as the January special (I know this is super inexpensive but remember I was just starting out with no clients). I sold a few but realized how attractive they were when clients booking in February asked if they could get the same special (of course I said yes!).

Selling packages has pros and cons. One positive is you get a commitment from a client to visit a certain number of times. Even if they choose not to use all their prepaid sessions, you still make money from them. The con I found is that when almost all regular clients are buying packages, they aren’t paying each time. That means you may not actually be paid on a regular basis.

cash-flowThis became a real cash flow problem for me when clients would cancel the appointment a new package would start on. Through no fault of their own, the timing was just wrong. After months of hoping this would work itself out, I knew I had to do something different when two clients booked a day apart who buy my highest priced package both cancelled the appointment they would be paying me on (with plenty of notice). This meant the money I was counting on to pay bills was not going to materialize. I’d been through this several times before and needed a new strategy.

What wasn’t working about the packages was that I wasn’t being paid consistently. I wanted to have money going into the bank every day I see clients instead of in random larger chunks. This would give me more financial stability and predictability.

So I decided to offer the same percentage discount clients received buying a package if they paid per visit at least once a month. This encompassed the majority of my regular clients. As an example, a client who comes in consistently once a month or more would now pay me $50 per visit instead of $150 every three visits. I raised the price of my packages 10% to keep them available for the few clients who would benefit from this option. This way, those who come in every six weeks or have more variation in their schedule still have an opportunity to save while giving more frequent clients a reason to pay me each time.

This change has been amazingly successful! Not only is my cash flow better, a couple of clients have started coming in more often because it’s easier for them to budget this way. All of the feedback I’ve received has been positive. One client even said it would help her stay on her massage schedule during the holidays!

When clients asked me why I made this adjustment, I was honest with them. Clients who love you and enjoy more quality of life because of your work together want you to stay in business. Being able to make a living is the most crucial piece to having a practice that I love!

What kinds of frequency incentives have you offered? What have been your results? If you don’t see a comment box below, click the Leave a comment link to share. Thank you!

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