SMME #439 Marketing Budgeting Deep Dive: How Much Should Your Spa Really Spend?

Summary

Spa Marketing Made Easy Podcast: Episode #439 Summary

Title: SMME #439 Marketing Budgeting Deep Dive: How Much Should Your Spa Really Spend?
Host: Daniela Woerner, Licensed Aesthetician
Release Date: June 23, 2025

In Episode #439 of the Spa Marketing Made Easy Podcast, host Daniela Woerner engages in an insightful discussion with her referral partner, Tara Zuercher, delving deep into the intricacies of marketing budgeting for spa businesses. This episode serves as an essential guide for spa owners aiming to allocate their marketing funds effectively to drive growth and sustainability.

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1. Introduction

Daniela welcomes listeners to the episode, setting the stage for an in-depth exploration of marketing budgets tailored specifically for the spa industry. She emphasizes the evolving nature of marketing and its critical role in business success.

2. Guest Introduction: Tara Zuercher

Tara Zuercher, Daniela’s trusted referral partner and an expert in advertising, joins the conversation. Tara shares her journey of transitioning from costly agency-managed ads to handling advertising in-house, resulting in significant cost savings.

Tara Zuercher [01:58]: “That move you guys saved me about $30,000 a year. Can you believe that? $30,000 a year.”

3. The Importance of Strategic Budgeting

The episode underscores the necessity of moving beyond arbitrary budgeting. Rather than selecting random figures, spa owners are encouraged to adopt a percentage-based approach to ensure strategic allocation of resources.

Daniela Woerner [04:50]: “...when people pick their ad budgets, they're just kind of. That sounds like a good number. But, like, do you see that?”

4. Defining Business Growth Stages

Tara introduces a framework categorizing business growth into three distinct stages: Maintenance, Growth, and Hyper-Growth. Understanding these phases helps in determining appropriate budget allocations.

a. Maintenance Mode

In this stage, spas primarily focus on sustaining their current client base and compensating for natural client attrition.

Tara Zuercher [07:32]: “If you're in maintenance mode, about 5% of your revenue should get you to that point where you're pretty easily replacing the clients that you're losing.”

b. Growth Mode

Spas in growth mode aim to increase their revenue consistently month over month. This requires a more substantial investment in marketing to facilitate expansion.

Tara Zuercher [09:46]: “If you are in growth mode, you want to be popping that budget up to 10 to 15% of revenue.”

c. Hyper-Growth Mode

Hyper-growth involves aggressive marketing during periods when client acquisition costs are lower, such as seasonal promotions or events. This phase is temporary, typically lasting two to three months.

Tara Zuercher [10:38]: “Hypergrowth is when you are, this is your cheapest time of the year to acquire clients... you are willing to sacrifice perhaps a tiny bit of your profitability in order to have this hyper growth stage.”

5. Allocating Marketing Budgets Based on Revenue

Daniela provides a practical example to illustrate budget allocation using percentages:

Daniela Woerner [12:17]: “If I have a $250,000 business... on average, I'm doing about $21,000 a month. If I multiply that times 5%, that's $1,041 a month that I would be spending on marketing.”

She further breaks down the allocation between ads and other marketing activities, advocating for a balanced approach to ensure diversified marketing efforts.

6. Diversifying Marketing Efforts

Both Daniela and Tara stress the importance of not funneling the entire marketing budget into ads alone. A balanced split ensures robust marketing strategies encompassing both digital and traditional methods.

Tara Zuercher [17:50]: “An ideal split would be 50%, you're kind of organic, not organic, but you're more like analog activities... and then 50% goes towards those Digital opportunities, your Facebook ads, your Google Ads.”

7. Understanding Customer Lifetime Value and Lead Quality

A significant portion of the discussion revolves around evaluating the quality of leads from various sources. Understanding how much a client spends over their relationship with the spa is crucial for assessing the ROI of different marketing channels.

Daniela Woerner [14:21]: “It's not just recouping that $500 and then saying, okay, well, they did a facial and then they bought some retail product... what are they going to spend with you over the course of the year?”

8. Planning and Adjusting Budgets

Tara advises spa owners to align their budgeting with their annual business plans, mapping out periods for maintenance, growth, and hyper-growth. She also recommends adjusting budgets based on real-time data and past performance to stay responsive to market dynamics.

Daniela Woerner [16:08]: “Are we then adjusting our budget based on what actually comes in?... are we just kind of carrying over the budget to the next month and seeing and adjusting it in that life.”

9. Implementing Effective Tracking Systems

To optimize marketing spend, Daniela emphasizes the necessity of tracking where leads originate. Implementing a CRM tagging system and prompting front desk staff to note referral sources can provide valuable data for refining marketing strategies.

Daniela Woerner [19:14]: “You want to also really look at the quality of that lead... how do I diversify that budget more. If I'm getting better quality leads, then I want to make sure that I am taking my percentage budget and really putting it into the lead source.”

10. Conclusion and Final Advice

As the episode wraps up, Tara and Daniela encourage spa owners to embrace a data-driven approach to budgeting. Understanding and controlling marketing expenditures empowers business owners to steer their spas towards sustained profitability and growth.

Tara Zuercher [24:38]: “Just as you start to get really comfortable with these numbers, you're going to start to feel that you really are able to pull the levers and control the revenue and really your destiny.”

Daniela concludes by inviting listeners to join the Spa Marketing Made Easy Facebook group for continued support and resources, fostering a community of empowered spa CEOs.

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Key Takeaways:

• Adopt a Percentage-Based Budgeting Approach: Allocate marketing funds as a percentage of total revenue, adjusted according to the business’s growth stage.

• Understand Your Business Stage: Differentiate between maintenance, growth, and hyper-growth phases to determine appropriate budget allocations.

• Diversify Marketing Efforts: Balance spending between digital ads and traditional marketing activities to ensure a comprehensive marketing strategy.

• Focus on Lead Quality and Lifetime Value: Prioritize marketing channels that yield high-quality leads with substantial lifetime value to maximize ROI.

• Implement Robust Tracking Systems: Use CRM tools and front desk inquiries to track the origin and performance of leads, informing future marketing decisions.

• Stay Flexible and Data-Driven: Regularly review and adjust budgets based on performance data and market trends to maintain effective marketing spend.

By integrating these strategies, spa owners can create a sustainable and profitable marketing plan that drives client acquisition and business growth without compromising work-life balance.

Transcript

[Daniela]

Hey, Daniela here and I have some.

[Tara Zuercher]

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[Daniela]

Hey Danielle here and you are listening to the Spa Marketing Made Easy podcast.

[Tara Zuercher]

We have been producing this show since 2018 and we have hundreds of episodes that are filled with inspiration, education, marketing strategies and more, all just for aesthetic professionals. Right now in this season, my focus is creating content specifically for spa CEOs who desire to build a profitable systemized spa that generates a minimum personal income of 100k per year without sacrificing your family time or burning out. If that is you, you are in.

[Daniela]

The right place, my dear. I am so happy that you are here.

[Tara Zuercher]

Now on today's episode, we are diving into a marketing budget deep dive with my dear friend and APA partner, Ms. Tara Zuercher. Now, Tara has been and will continue to be our go to referral partner for all things ads. In fact, I used to pay agencies lots and lots of money. I'm talking like three to four thousand dollars a month to manage our ads.

[Daniela]

And that was really until I gained.

[Tara Zuercher]

The confidence in myself with Tara's support and her program successful ads club that I could actually bring ads in house. That move you guys saved me about $30,000 a year. Can you believe that? $30,000 a year. And when I think about how much that adds up over the years, we're talking about six figures of savings plus, right? By doing them in house, we were able to shift and change our ads as we saw fit. Nobody knows our brand like we do.

[Daniela]

And that like our results started going.

[Tara Zuercher]

Up higher as well. Was it fun? No. I will be super honest about that. I'm not gonna sugarcoat it, okay? I did not enjoy the process. But was it worth it? A hundred percent, you guys, it was worth it a million times. It was a short term pain for a long term gain. So one of those things that I have absolutely zero regrets on, and if you're interested in learning how you can either start doing ads yourself if you have not really kind of dipped your toe in that pool or if you're.

[Daniela]

Like me, and you're like, gosh, I'm.

[Tara Zuercher]

Spending so much money on ads, and I just wanna figure out how to bring this in house and save myself that much money, then I want you to click the link below this episode to get registered for a free training that Tara and I are hosting together on July 14th. Okay, that was just a little side note, but let's get back to the purpose of today's episode, and that is.

[Daniela]

To dive into ads, budgets, to really.

[Tara Zuercher]

Get clear on how much should you be spending on marketing. So we're breaking it down to marketing.

[Daniela]

In general, and then how much of.

[Tara Zuercher]

That should be ads? How much should that be? Traditional marketing, all of those fun, fun things that we get to play around with and do as spa CEOs. So I hope you enjoy this episode, and I hope to see you in July at the training that Tara and I are hosting. All right, let's go ahead and play that interview.

[Daniela]

All right, Tara, welcome back to the Spa Marketing Made Easy podcast. I don't know how many times you've been on, but I love that you're here again. And I think that, you know, talking about marketing, talking about ads is always something that is evolving and changing and growing as the market and the economy shifts the way that we're doing things. And so today I wanted to specifically dive into budgeting, because budgeting is such. How much are we supposed to be spending? How do we. You know, I feel like when people pick their ad budgets, they're just kind of. That sounds like a good number. But, like, do you see that?

[Tara Zuercher]

I mean, I used to do that all the time. Absolutely.

[Daniela]

And then it was like, okay, no, if I want to be really strategic and I want to really get into the numbers, I want to look at the percentages that I'm spending specifically on marketing. And it doesn't have to be all on ads or all on SEO or all on events or referral programs, but we definitely want to take that total marketing budget and then allocate what is working and what is making the most sense right now.

[Tara Zuercher]

100%. And I think the more that you can think of your business and look at your business through the lens of percentages, because how many of us, myself included, that's how I used to do budgeting, too. It's just like, I don't know, maybe this amount, like, just kind of guessing your way through that is not your most effective way. So we really step into more of that stronger sort of business.

[Daniela]

The more sophisticated. Yeah, more sophisticated Business owner as we kind of grow and evolve and when we started really getting into our numbers and really diving into, like, profit first and in profit first, you do everything in percentages, right? It. That was. This is probably five or six years ago that I was like, oh, we need, like a percentage for our marketing budget too. So let's. Let's talk about kind of the different stages a business might be in or different goals that a business might have and how we're looking at, like, what. How do we know what a healthy budget should be for those different businesses?

[Tara Zuercher]

I love it. Okay. So when I'm thinking about budgeting, I always want to think of my business. You're thinking of it in kind of three stages, stages of growth. And really your business is probably going through all three stages of these growth markers every single year. So there's maintenance, there's growth, and there's hyper growth. And so should I just take us through Daniela, kind of each one. And. Okay, so if you're in maintenance mode and just kind of think to yourself as you're listening to us today, like, which. Which place am I in right now? You're probably just kind of maintaining your current numbers. You're covering attrition, essentially. If, you know, you lose an average of seven clients a month, you're just covering those seven clients and you're just kind of maintaining your capacity. And there's certainly times of the year where you might be in that stage. I mean, maybe if you're a solo Estee, you might just be, you know, maybe summers are a little. Not only are they slower just in the spa world in general, but you might also have kids out of school. And maybe you're just trying to maintain certain, you know, client percentage.

[Daniela]

What we see in spa on average is that you're going to lose about 20% of your patient base or client base every year. And so just plan that you want to add 20% new clients to whatever that active number is. And it's really important to not get attached to that because people, People move, people get pregnant, people, people's financial situations change. People find other locations that are a better fit for. For them. And all of it is okay. It's just, you know, if you plan for that average of 20%, that's your maintenance mode that we're wanting to spend our marketing dollars to recoup, to stay at that level.

[Tara Zuercher]

So good. The next stage would be growth. So this is where you're looking to grow your revenue. And. And everybody always says they want growth, but when you really look at it. You know, there may be times of the year where you're not planning for as much growth. Right. So this is like you're really looking to grow your revenue month over month. And then we go into hypergrowth. And this is. It sounds exciting, but listen to what hypergrowth is. Hypergrowth is when you are, this is your cheapest time of the year to acquire clients. So we're thinking this might be a Black Friday for some of you maybe, Right. You know, as fall starts, like these are just periods of time where it's really easy to acquire clients. I'm also thinking of beginning of the year is another beautiful time for this stage. But there's a. But you are willing to sacrifice perhaps a tiny bit of your profitability in order to have this hyper growth stage where you're getting a ton of clients. And you know that's going to pay off long term. Right. So you don't want to be in a hyper growth for longer than two to three months. You know, your bookkeepers, CPAs would get very angry with a suggestion of staying in hypergrowth for longer than that. So, and the reason why. And you're going to hear, when I go through, back through this kind of timeline or these, these markers again, you're going to hear the percentages and it's going to make sense. By hypergrowth, you're sacrificing just a little bit of something else in order to get into that stage. So when we're in maintenance mode, we want to spend and I would just ask yourself, like, am I overspending or underspending? So this should be pretty easy to calculate and you're just basically going to think of your total revenue and I'm going to give you the percentages of how much you should be or could be allocating towards your marketing budget at each of these stages. Okay. So if you're in maintenance mode, about 5% of your revenue should get you to that point where you're pretty easily replacing the clients that you're losing. So we're just maintaining, if you are in growth mode, you want to be popping that budget up to 10 to 15% of revenue. And that should be fairly comfortable. It shouldn't be, you know, affecting too many other things. And then when we go into hyper growth, that's where you're willing to bump up even a little bit further to 15 to 20% of your revenue. And again, you're only doing that. You're doing that intelligently. You're only doing that during the periods of time of the year, where you just know it is less expensive to acquire customers, acquire clients than it might be during other periods of time. Like, people are just in the mode of finding their spa services for the year, and that's when you want to capitalize on that hyper growth period. So when you think through that, it should be pretty easy to start thinking to yourself, am I underspending or overspending? And I will tell you that overspending is rarely the problem. Danielle, I would love to hear your thoughts, but for the most part, when I see folks and we go through kind of their P and L, they're dramatically underspending. Typically.

[Daniela]

I see that a lot in spa, and I think that, you know, when someone's first starting out, typically we see them starting out as a solo provider and, you know, they're doing the work in the room. They're trying to operate and grow the business, and. Or if they're hiring somebody, they're either overpaying them or, you know, so there's. They feel like there's no money at the end of the month. And so to think about investing, you know, thousands of dollars into marketing, they're looking at it as an expense rather than an investment. And so that's why it's incredibly important to be comfortable with your numbers and really track like, okay, if I am doing. Let's just say that I have a $250,000 business. I love getting my calculator out here.

[Tara Zuercher]

Yes.

[Daniela]

So 250,000. So if I break that down, divide by 12. I know that's not how it all typically works out, but on average, I'm doing about 21,000amonth. If I multiply that times 5%, that's $1,041 a month that I would be spending on marketing. So we may say that we want to spend $500 on ads and then use the other $500 for your other marketing activities. Well, if you spend $500 on ads and then you're getting clients coming in, what we have to look at is what is the client going to spend over the course of their relationship with you as a business, it's not just recouping that $500 and then saying, okay, well, they did a facial and then they bought some retail product, and it's, what are they going to spend with you over the course of the year? And that's why it's. I mean, this is. Might take us down a different rabbit hole, but I think it's so incredibly important to know who you are and who you serve before you really dive into ads. Because targeting the wrong person can really lower your retention rate. And then you can feel like, well, ads don't work well. No, it's that you're just throwing ads out there to anyone under this, anyone out there. We have to speak our ideal clients language that we're connecting with them on a deep personal level, that we understand their needs and desires. And so if you have that piece dialed in and know who you are and know who you serve and what problems you're solving for that individual, then you're attracting the right person that's gonna get you an ROI way more than the $500 that you spent on the ads.

[Tara Zuercher]

I mean that's so powerful and I think there's even layers of wisdom there. Just in general, so many, so many people, so many business owners of all types and you know, definitely in the spa world have targeted the wrong customer. Especially when you're starting out, you're figuring all that out. You just don't realize the long tail on that because guess are going to be who they're going to bring in their friends, they're going to be. It's just like it create. You really want to attract that right avatar. And I think one mistake that people make in our world with ads is they think that you have to do these massive discounts, you have to do attract kind of the lowest paying client. Right? That is not true. We see luxury brands, very premium brands in our world that are targeting very effectively with ads. And really I think it comes down to, and this is just usually, you know, some self reflection now there's so many wonderful chatgpt prompts you can go through. It's really identifying what your unique selling proposition is. What is that unique result that you get for your clients? And once you figure that out, oh, everything becomes so much easier and definitely your ads.

[Daniela]

So how are we going to, you know, you talked about being in these different seasons of maintaining or growth or hyper growth. Is this something that we're looking at when we're doing our annual plan for the year that hey, from, you know, January we're going to have a hyper growth and October we're going to have a hyper growth or November depending on if we're doing an event or a Black Friday and then are we just maybe looking at quarters how we're mapping it out?

[Tara Zuercher]

Okay, yes, yes, absolutely. I mean I would say generally we know that there's a summer sort of slowdown so you don't want to be usually in any sort of hyper growth situation at that period. Because it's actually going to cost you more. Right. Cost you a little bit more. You might be able to maintain kind of a good average, but you don't want to spend more during that time. And then yes, I would just kind of look at. And your data should tell you like, when are your promotions the most effective? You know, typically we're thinking that kind of that fall season, early part of the year is wonderful. Perhaps an anniversary period. Those are typically periods where it's like. And hyper growth doesn't need to be a full three or four months. It can be one month where it's like we're going to increase our ads budget this month knowing it's our anniversary month or whatever it is. And we typically just get a lot of client activity, new client activity. And so we want to capitalize, increase the budget a little bit during that period. No, we might see a little bit less profitability percentage wise during that month, but that's okay because back to what you said earlier, that lifetime value more than makes up for it.

[Daniela]

Okay, so we're mapping this out in terms of timeline of when we're going to do it. We're mapping it out. Are we then adjusting our budget based on what actually comes in? Because I know we like to do projections when possible, but sometimes it's over and sometimes it's under. So are we just kind of carrying over the budget to the next month and seeing and adjusting it in that. Absolutely, in that life.

[Tara Zuercher]

Okay. And something for people that are nervous about this, maybe you don't have as much data to kind of inform sometimes I'll say, well then go with last month. You know that revenue that's already, that already came in the door. Base your, base your budget on last month. So if last month, I don't know, let's say we did had a $20,000 a month, then let's take, you know, maybe we're in growth mode. Maybe you want to take 2,000 of that. And I think something that we want to pull out here as well, and you mentioned it earlier, is that's not all going to ads. I know I'm an ads person, but you don't want that all to go to ads. An ideal split would be 50, 50, 50%. You're kind of organic, not organic, but you're more like analog activities. Maybe you're sending a mailer, maybe you are going to be present at a couple of community events. Like those things are very, very good. And then 50% goes towards those Digital opportunities, your Facebook ads, your Google Ads, things like that. So you want to diversify that marketing budget, but that would be a very, very good way to do it. So if you're nervous and you don't really have enough like year over year data, then just go based off of last month or maybe it was, you know, May of last year. If it's May this year, May of last year, you know, so there's ways to kind of look at that so you're not just, you know, throwing a Hail Mary out there and hoping for the best.

[Daniela]

So that's a great bit of advice for someone who maybe is not budgeting at all. And you know, like that's how we get started. So if that's you, like just take this next step and say, okay, I'm gonna start to start treating my business like a business. I'm going to step in. If I want to be a seven figure spa owner, I need to start acting like that now. And that is the way like seven figure spa owners are creating budgets. They are out there marketing, they're testing things that are working for their businesses. The other piece of advice that I want to touch on here, when we get around budgeting and kind of the how we're looking at how it's working, I like to keep track of where your leads are coming from. So if your leads, if you have X amount of new clients or patients from Google or SEO, X amount of new patients from ads and then X amount of new patients from referrals, you want to also really look at the quality of that lead. Let's say that you have 50 new people that came in from search and you have 30 new people that came in from ads. What you want to do. And this would really, I would love to see this over like a quarter basis, really looking over like a three month time span. Take everybody that came in from SEO and check their retention rate and check what they spent in your business. Do the same thing for ads and do the same thing for referral. You may have less from ads, but they may be more qualified leads. And so that's going to help you understand how do I diversify that budget more. If I'm getting better quality leads, then I want to make sure that I am taking my percentage budget and really putting it into the lead source. And this might change, it may change quarter to quarter. So you may have 1/4 where ads is outperforming Google and vice versa. And so it's really important for you as the CEO getting into the numbers, looking at these types of things and paying attention to these types of things because that will make your dollar go so much further and help your business to be more profitable. The one thing that I can tell you for sure about marketing is that it always changes. The basic concepts are there, but there's always going to be things that are shifting and changing in how we are getting the attention of our ideal client.

[Tara Zuercher]

100%, yes. That's so good. And I feel like you don't need to be a trend chaser necessarily, but to understand and just keep a pulse on where the market kind of is. What I want to say about that is like, don't chase like micro trends, like what you know, what's popular on trending right now on social media probably isn't as important as which platforms your client is on and trace kind of paying attention to or keeping a pulse on those like bigger trends. Right. The macro trends of where people are at, how they're interacting. I mean we see things like, I know you talk about this often, but just the importance of things like Google reviews and how much the client, the customer behavior has changed over the years to where used to be a little bit more like somebody would see your ad, they go and kind of do the thing you wanted them to do, but now they see your ad and there's several layers that they go through. They go and they Google you, they read your review. So you just have to understand those macro kind of where things where your entire online presence, entire online presence and how people are going from point A to point Z, which is ultimately booking with you.

So good.

[Daniela]

So I know this is a little bit shorter of an episode than we typically do, but I want to keep this really focused on budgeting. And if you're listening to this and you do have some gaps in your schedule or you do have some time that you can focus on strategy of your business. This is what I want you to focus on. I want you to look at the numbers, I want you to look at your budget, I want you to see where your leads are coming from and I want you to create a clear plan so that you know, here's how much I can spend and here's where those marketing dollars are going. And be sure that you have time allocated to track the leads that are coming in and understand and that can be done through a simple tagging system in your CRM. You want to make sure at the front desk that they're asking, you know, where did you hear about us? We want to make sure that we're collecting all of that data that will make you a very sophisticated business owner, that will make you a spa CEO in your business to really help you build it into a company. It's so, so important. Tara, anything else that you want to add?

[Tara Zuercher]

Oh, this was great. I always love being with your community, Daniela. And, you know, I would just say, like, just as you start to get really comfortable with these numbers, you're going to start to feel that you really are able to pull the levers and control the revenue and really your destiny. And so understanding how you're allocating what you're investing in and how that's coming back to you and not being afraid of it will start to elevate your skill set as your as a spa CEO and you'll be able to control the flow. You know, you will be able to kind of determine, not with exactness, but pretty close how many new customers you need, how much it's going to cost you to get those customers. And then from there, things start really moving in really cool ways.

[Daniela]

Love it. All right, well, as always, if you want to keep this conversation going, please head on over to the Spa Marketing Made Easy Facebook group. We've got all the information on our free trainings and tons of videos and resources to help you build your business. We will catch you on the next episode.