Your Spa Diversification Strategy

For spas, diversification entails moving into new areas closely related to your business’s core wellness services—while still offering those original services. For a long time, spa services were siloed into wellness & relaxation, and could be perceived as “too luxurious” and inaccessible to many. This is no longer the case. To stay competitive, many spas have blurred industry lines, uniting complementary wellness, beauty & grooming, and even fitness services under the self-care umbrella. If you own a spa business, diversifying like this enables you to reach new markets and adapt to changing consumer preferences in this evolving industry. Below, we’ll answer why diversifying is necessary for your spa’s continued success and offer some practical spa diversification ideas that you can implement.

Why Your Spa Should Diversify

As we touched on above, spas are no longer considered a luxury reserved for the elite. They cater to a broader and more diverse clientele, and their services have expanded well beyond massage modalities and facials.

This is driven in large part by:

A Growing Wellness-Centric Approach: Spas are increasingly adopting a holistic and prevention-based approach to wellness, incorporating services such as yoga, meditation, nutrition counseling, and fitness programs. Consumers think of wellness as an “ecosystem” encompassing “six key dimensions.”¹
Demand for Customization & Personalization: Clients expect tailored experiences that align with their specific needs and preferences. This includes personalized treatment plans and product recommendations.²
Technological Integration: Spas are adopting newer technology to enhance customer experiences, from booking appointments online to utilizing innovative treatments and equipment.³
Increased Market Saturation: The spa market is becoming saturated in many regions, intensifying competition among businesses⁴. Diversifying can help you reach new customers (and new revenue).

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Spa Diversification Examples

Before forging ahead, remember that there are many things to consider with diversification, such as which market is best for you to branch into and whether your spa can manage it from an economic perspective. Answering these questions and more requires a carefully planned business diversification strategy.

Once you have this strategy, it’s time to massage your brain a bit and get some ideas flowing. The ones offered below fall under three of the four main types of diversification umbrellas:

Horizontal Diversification: Entering a new market that is different from, but shares a connection with, your spa business.
Concentric Diversification: Expanding products or services into new markets that are related to your spa business, sharing resources and/or marketing with your existing spa services.
Vertical Diversification: Expanding into areas of your supply chain or customer journey that are related to your core business, like starting your own skincare product line.

Wellness & Holistic Services

These services are probably the easiest and most logical to branch into. Diversify by incorporating a wide range of wellness and holistic services. These can include:

Yoga & meditation classes
Nutritional counseling
Mindfulness workshops
Energy healing sessions

By offering these services, you can serve clients looking for a more comprehensive approach to health and wellness.

Beauty & Cosmetic Treatments

Beauty and wellness just seem made for each other, don’t they? Think about expanding services to include beauty & cosmetic treatments, such as facials, Botox injections, dermal fillers, and non-surgical cosmetic procedures.

This kind of diversification allows spas to tap into the growing demand for aesthetic enhancements and antiaging solutions. Flexible payment options, like Vagaro Pay Later, enable spas to sell more of those luxurious, holistic services and packages to clients by splitting the bill into four manageable payments.

Fitness & Health Programs

Recovery, healing and mobility have become big priorities for the fitness community. To attract fitness enthusiasts and health-conscious clients, spas can offer fitness programs, personal training sessions, and wellness retreats.

Combining spa treatments with fitness activities provides a holistic approach that bridges the gap between physical and mental wellbeing.

MedSpa Services

This one requires a bit more of a leap, as diversifying into medical spa services requires adherence to strict medical regulations. Medical spas, also known as medspas, offer a range of medical & cosmetic procedures under the supervision of a licensed medical professional.

Antiaging and aesthetic medicine services such as laser hair removal, skin rejuvenation and injectables are only growing in populrity.⁵

As with fitness and beauty services, expansion of this kind likely requires significant funding to buy necessary resources and create space for your new services. Spa businesses using Vagaro are in a unique position for growth, thanks to Vagaro Capital, which makes funding available quickly for a range of projects.

Nutrition & Dietary Counseling

Some spas have diversified by offering nutrition and dietary counseling services. Clients can receive personalized diet plans and advice on maintaining a healthy lifestyle, complementing traditional spa offerings. Personalization and lifestyle are the operative words here.

Retail Product Sales

Many spas have taken a page from the salon handbook and incorporated retail sections within their establishments, selling skincare products, essential oils, spa-related accessories, and wellness items. This enhances the overall customer experience by providing access to high-quality products and enables you to claim a nice chunk of revenue that would otherwise be left on the table⁶.

Selling product bundles or including them in regular and/or seasonal service bundles are also fantastic ways to boost revenue. Developing and selling your own line of spa & wellness products is also an opportunity to really turn your spa into a brand.

Beauty & Wellness Subscription Box

This combines your new focus on retail and beauty services with a drive to bring in recurring income. Curate and sell subscription boxes filled with spa products, wellness items, and self-care essentials that you already sell in-store, but just delivered to customers' homes. Set up a membership for it through Vagaro to secure that extra income each month.

Alternative Therapies

Alternative therapies like acupuncture, reflexology, cupping or reiki allow you to attract clients seeking nonconventional approaches to wellness and relaxation.

Additionally, low-touch, or touchless therapies, such as cryotherapy, flotation therapy, LED treatments & IV therapy, are not only popular, but they free you and your staff to schedule other services in the same timeframe, which equates to more revenue.

Geographic Expansion

Once a spa business has reached a certain level of profitability, physical expansion is almost a necessity. Expanding to new locations is a way to diversify geographically, reaching new demographics and growing your brand.

Adding fitness and beauty-related services as described above makes perfect sense—provided there is a demand for them in your area. Maybe your flagship spa’s demographic aren’t 25-year-old fitness fanatics who need recovery services, or expectant mothers who would benefit from prenatal massage or prenatal yoga. But what about a few towns over, near that college campus, corporate park or new suburb?

If diversification entails opening another spa with a different scope of services than your flagship location, Vagaro’s bevy of enterprise features can take the headache out of running multiple businesses.

Benefits of Diversification for Spas

Remember that any diversification avenue you choose should align with your spa's goals, resources and target audience, all of which are, ideally, mapped out in your business plan.

With a diversification plan in place that enables you to evolve with your industry and keep up with consumer demands, you can:

Increase growth with new revenue streams and protect your primary business in slower times
Spread your investments and reduce the impact of risks
Attract new clients and reach new markets that your competitors can't
Stabilize your spa by reducing its dependence on a single service or market
Adapt and stay relevant in an industry that is always evolving
Forge meaningful partnerships with local gyms, beauty salons and other businesses

Spa diversification can take various forms, each tailored to the specific goals and resources of a business. By expanding service offerings, catering to niche markets, incorporating retail strategies and adopting a holistic wellness model, spas can unlock new revenue streams, enhance customer loyalty, and adapt to evolving market dynamics. Vagaro is the ideal tool for running a nuanced spa business and selling a range of diversified services. Start your 30-day FREE trial and experience how Vagaro can maximize your spa’s efficiency, revenue and growth.

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