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Massage Franchises: Taking the Discussion Further
First off, I would like to thank my wife, Ivy, for letting me hijack her blog post this week!
I recently read the Massage & Bodywork article, “Massage Franchises: The Impact on the Profession” (twice, in fact). Even though I felt the article was fairly slanted, I will withhold my feelings about massage franchises for the purposes of this discussion. As a marketer, I just feel there is so much more to say on how franchises will affect the market of massage therapy, and what individual practitioners can do to market themselves in this new environment.
The opinions I am about to lay out are heavily influenced by the works of Al Ries and Jack Trout, titans in the marketing community. In all, I will reference ideas from four books:
Positioning: The Battle for Your Mind by Al Ries and Jack Trout
Marketing Warfare by Al Ries and Jack Trout
The 22 Immutable Laws of Marketing by Al Ries and Jack Trout
Differentiate or Die by Jack Trout and Steve Rivkin
To understand how massage franchises will impact our place in the massage market, we must first understand how the market will mature. While massage has been around for thousands of years, the massage industry is still pretty young. The Law of Duality states that “in the long run, every market becomes a two-horse race.” Coke and Pepsi is probably the most prominent example of this. In the massage industry, this will likely mean the franchise players will be sorted down to Massage Envy, and one other company.
However, this obviously does not mean other massage businesses will cease to exist. The market will be made up of a leader, Massage Envy; a primary competitor, we’ll say Elements Therapeutic Massage for this exercise; a solid # 3 company, we’ll say Hand and Stone Massage; and then everybody else. If you’re an independent practitioner, you fall into the “everybody else” category. Based on the concepts in Ries and Trout’s Marketing Warfare, each of these positions should employ a different market strategy.
A market leader should defend their position against their strongest competitor. The # 2 company should employ an offensive strategy, with the goal of taking market share from the leader. The # 3 company will not be able to compete directly with # 1 and # 2, and should therefore develop a flanking strategy; targeting a segment of the market where the leader does not hold a strong position. Everyone else should focus on a niche strategy; filling a hole in the market that is large enough to sustain survival, but small enough to not attract attention from the larger competitors. Since the majority of you will need to implement a niche strategy, we will further explore that area.
So what is a “niche strategy” anyway? A niche strategy sacrifices its appeal to the masses in favor of focusing on a very specific unfulfilled need in the market. In massage, that may mean focusing on a unique modality, or offering mobile massage services. To employ a profitable niche strategy, you will need to differentiate your business from those around you. Obviously, you will not be able to compete on price or availability, as the franchises will have more labor hours at cheaper rates than you can offer. Differentiating yourself on quality becomes the next logical assumption. If your only competitors are massage franchises, this is the obvious strategy, as you will be able to give a higher quality massage and greater individual attention to your clients. But what if you’re surrounded by other practitioners in a competitive market? How do you measure quality, and how do you communicate to potential clients that your hour long massage from an experienced practitioner is better than that of another?
Take an honest assessment of your current business and the unique talents you hold. Take an honest assessment of your market. Is there something unique you provide that is valuable to potential clients? (I repeat, must be valuable to clients!) If so, you’ve found your niche. Market yourself on that unique talent or service, and work to ensure you are the market leader for the niche you’ve chosen.
To prevent myself from writing endlessly, I will end the discussion there. If you are struggling to find your niche or struggling to market yourself, I beg of you to read Guerrilla Marketing by Jay Conrad Levinson. It truly should be required reading for any small business owner.
If you can stomach the thought of discussing marketing, I would love to hear your thoughts. Thanks!
Aaron Hultquist
Director of Marketing
Advanced Massage Techniques, Massage Continuing Education
I recently read the Massage & Bodywork article, “Massage Franchises: The Impact on the Profession” (twice, in fact). Even though I felt the article was fairly slanted, I will withhold my feelings about massage franchises for the purposes of this discussion. As a marketer, I just feel there is so much more to say on how franchises will affect the market of massage therapy, and what individual practitioners can do to market themselves in this new environment.
The opinions I am about to lay out are heavily influenced by the works of Al Ries and Jack Trout, titans in the marketing community. In all, I will reference ideas from four books:
Positioning: The Battle for Your Mind by Al Ries and Jack Trout
Marketing Warfare by Al Ries and Jack Trout
The 22 Immutable Laws of Marketing by Al Ries and Jack Trout
Differentiate or Die by Jack Trout and Steve Rivkin
To understand how massage franchises will impact our place in the massage market, we must first understand how the market will mature. While massage has been around for thousands of years, the massage industry is still pretty young. The Law of Duality states that “in the long run, every market becomes a two-horse race.” Coke and Pepsi is probably the most prominent example of this. In the massage industry, this will likely mean the franchise players will be sorted down to Massage Envy, and one other company.
However, this obviously does not mean other massage businesses will cease to exist. The market will be made up of a leader, Massage Envy; a primary competitor, we’ll say Elements Therapeutic Massage for this exercise; a solid # 3 company, we’ll say Hand and Stone Massage; and then everybody else. If you’re an independent practitioner, you fall into the “everybody else” category. Based on the concepts in Ries and Trout’s Marketing Warfare, each of these positions should employ a different market strategy.
A market leader should defend their position against their strongest competitor. The # 2 company should employ an offensive strategy, with the goal of taking market share from the leader. The # 3 company will not be able to compete directly with # 1 and # 2, and should therefore develop a flanking strategy; targeting a segment of the market where the leader does not hold a strong position. Everyone else should focus on a niche strategy; filling a hole in the market that is large enough to sustain survival, but small enough to not attract attention from the larger competitors. Since the majority of you will need to implement a niche strategy, we will further explore that area.
So what is a “niche strategy” anyway? A niche strategy sacrifices its appeal to the masses in favor of focusing on a very specific unfulfilled need in the market. In massage, that may mean focusing on a unique modality, or offering mobile massage services. To employ a profitable niche strategy, you will need to differentiate your business from those around you. Obviously, you will not be able to compete on price or availability, as the franchises will have more labor hours at cheaper rates than you can offer. Differentiating yourself on quality becomes the next logical assumption. If your only competitors are massage franchises, this is the obvious strategy, as you will be able to give a higher quality massage and greater individual attention to your clients. But what if you’re surrounded by other practitioners in a competitive market? How do you measure quality, and how do you communicate to potential clients that your hour long massage from an experienced practitioner is better than that of another?
Take an honest assessment of your current business and the unique talents you hold. Take an honest assessment of your market. Is there something unique you provide that is valuable to potential clients? (I repeat, must be valuable to clients!) If so, you’ve found your niche. Market yourself on that unique talent or service, and work to ensure you are the market leader for the niche you’ve chosen.
To prevent myself from writing endlessly, I will end the discussion there. If you are struggling to find your niche or struggling to market yourself, I beg of you to read Guerrilla Marketing by Jay Conrad Levinson. It truly should be required reading for any small business owner.
If you can stomach the thought of discussing marketing, I would love to hear your thoughts. Thanks!
Aaron Hultquist
Director of Marketing
Advanced Massage Techniques, Massage Continuing Education
Views: 396
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Comment by Rob Buckley on March 24, 2010 at 11:39pm
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Hello everyone, :)
Seem to be a lot of emotions coming up with these postings... I wonder how different it would be if we all sat around a coffee table and had a nice discussion? Probably very different, and that's one of the interesting aspects of online dialogues...
At any rate, to clarify:
1. I simply disagree with the assertion that there will be 2 large massage franchises that dominate the market in America. In fact, I would be profoundly amazed if that were to occur.
2. The "Law of Duality" is suspect.
3. I am certainly not an "elitist". My example of Boonesfarm wine versus other wines that are more refined, have higher quality ingredients, are aged longer, have better recipes, etc... is that there is a difference between mass market and quality. It is not elitist to say that a local, organic wine is likely to be better tasting than Boonesfarm.
4. I do agree that pricing is a positive aspect and trend. As an example, I charge $40 per hour, $60 per 90 minutes, and offer discounts on group certificates. I also give away at least 10 massages every month, along with community service. I'm curious if that would fit your term of "elitist"? Perhaps the tables could be turned?
5. It IS great that there are options, for different tastes and motivations.
6. I still do not believe that franchises will dominate the massage therapy market in America. The original posting was in fact addressing this seemingly unavoidable trend, and my belief that this is very unlikely to occur. From this initial focus and post, some strong emotions, tangents, and dare I say, diatribes have been evoked.
7. To return to that initial focus, I simply believe that massage franchises will not dominate the American market. This is not to say that the franchises provide accessibility for the community, opportunities for therapists, etc... It is simply to say that I do not see them dominating such a deeply personal and often spiritual experience. It's tough to be that type of stuff in a bottle to mass market and sell.
Wishing everyone a healthy, positive, emotionally grounded day, :)
Rob
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Comment by Kelly Grounds on March 24, 2010 at 7:00pm
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We currently have students at 3 different franchise chains, ME, H&S and Elements. All reported they had to sign a non compete clause.
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Comment by Ivy Hultquist on March 24, 2010 at 5:37pm
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Kelly,
Fantastic comments and thank you for sharing your experience! I have refrained from voicing any opinion for or against massage franchises in this discussion, but I have been very curious as to whether or not franchised employees were required to sign a non-compete. Thanks for the info!
Aaron
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Relax and Rejuvenate,
I did not know who the Mr. Sink you were talking about was, so I did a Google search of "Mr. Sink Law of Duality." It appears Eric Sink is a blogger who wrote a cliffsnotes series on Ries and Trouts' 22 Immutable Laws of Marketing. So I have to ask, did your other arguments come from quick Google research as well?
Eric's comments about #2 not becoming #1 were spoken as a generalization (to which I agree), and not rigid law. Positions can most certainly move around, but in general, it takes a serious strategical error of the leaders, or major innovation from a competitor for there to be much movement.
As for Porter's Competitive Advantage, I agree, with the exception that I feel using a low-price model is a differentiation strategy because only one player can successfully own that position. But I agree there is almost always a competitor using a low-price model, and in mass consumption markets, that player is generally in the top 3.
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As someone who has been both a business owner and a franchise spa worker, let me throw in my observations. I moved and sold my very successful private practice when my husband was offered a great job in an urban area. I took a job at a franchise to learn the 'lay of the land' so to speak. The spa itself was lovely, peaceful and had many very good LMTs. The franchise spa indeed introduced many brand new massage goers to the benefits of massage through their 'special offer of $39' (What I was never privy to was 'how many of these people returned within the year and how many took this deal but never came back)' I know that around 10%-15% purchased memberships that same visit. The owner was not an LMT but the Manager was and together they worked very hard to balance 'personal experience versus massage.' However, because it was a franchise, we were locked into doing the 'company mandated massage routine.' (Seriously, we had test out on a manager with this 'massage routine' before we were allowed on the floor!)
Fast forward a year later: My book was full. My clients had to schedule a month ahead to see me. But I chose to leave. Why? Because although it was a nice place to work, no matter how many additional certifications and new techniques I learned, I was always going to receive no more than $20 a client (depending on the service) and maybe some tips. At my franchise, there was not an hourly wage. We were paid a flat rate based on the service the client ordered. Turnover was and is still high at this franchise. At most of these franchises, the owners have not thought ahead to the retention of good employees. My clients were mostly members locked into contracts. They were assigned to other therapists. Some did the detective work to seek me out (we sign a non compete clause). They were even more delighted with a non-franchised trademarked massage session. Not one has complained about paying my higher prices. I see them as often as I did when they came to the franchise.
I do not see the Franchise Spa as a horrible thing anymore. They make massage 'demystified' and 'accessible' to the Everyman/woman. (in the words of one client "Massage isn't for creepy perverts like my mom had me believe!") However, I do think that as the clients build a relationship with the therapists, they will be put off by the high turnover of staff and maybe choose not to take on the burden of a membership. Plus these same franchise places are going to be challenged in the future if staff try to unionize (as I hear ME employees are trying to do) and become overly qualified to work at lower wages. I don't see them going away, but I do see them having to adjust their marketing plan in the next 5-8 years. We as LMTs need to adapt the franchises into our marketing plans.
Kelly G.
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Comment by Relax & Rejuvenate on March 24, 2010 at 2:58pm
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"While they might have the nationwide mass sales, any one who truly appreciates wine would either be offended or laugh if you suggested that was the future of wine, or really, if that was even wine at all. Same for massage therapy."
What an unbelievable elitist statement! Who are you to judge what wines anyone should drink of the quality of any MTs work based on where they chose to seek employment?
I would be willing to bet that if you sent 100 consumers to get massage from 50 independent practitioners and 50 appts at franchises you would get a proportional # or raves and complaints. As was pointed out, "This is a profession with a specific skill-set, among a variety of skill-sets, combined with their personality or style, and it's applicability to each client and the client's shifting needs." Since every client and every practitioner are an independent equation (meaning A+B will not necessary = B+C, where B is the MT and A and C are the consumers), holding one variable constant will not give constant results -- meaning not everyone will always prefer the work of an independent practitioner to a chain employee.
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I find your analysis to be rudimentary and misguided, as is Mr. Sink.
His law of duality has already proven intellectually bankrupt-- #2 can become #1, just look how Ford and GM and Flip-Flopped in recent years. Walmart blew the doors off of Kmart.
In the first example, the leader faltered. Had nothing to do with Ford's strategy -- which was hardly aggressive. Walmart, however did employ an aggressive strategy. But so did Kohl's. when they were a 3rd tier player and is now number two. They did not flank anyone, so much for Sink's theory of 3rd place strategies.
What Sink is trying to explain, but not well, are two different classic business theories. 1) is the Boston Consulting Group's Growth/Share matrix whereby you can define you position in the market. 2) is Michael Porter's seminal work on Competitive Advantage, of which their are really only two advantages and therefore two strategies -- be the low-cost player so you can exert market pressure and/or maintain superior profits to fuel your growth or a Differentiation strategy.
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Comment by Kevin M. Deighan on March 23, 2010 at 10:20pm
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Hello...if anything is to be learned it's that the franchise makes Massage affordable. Bottom line...it's a wake up call. Clients from all walks of life pass though franchise doors, get their massage and make a choice to become a monthly member based on their experience with the therapist, the cleanliness of the facility, the atmosphere and environment and a professional staff to meet and greet them coming and going. The client makes the "affordable" decision to get their needs met...sometimes weekly! AFFORDABLE...not a cheaper alternative. To those that believe that the franchise therapist is less than capable of delivering quality work...think again. The requirements (National Certification & Licensing) to work in a given state apply to everyone. There are excellent, good and not-so-good therapists across the board; we all strive to be better therapists. Time and again I've heard the complaint from spa owners overcharging for services to make huge profits that franchises will place a black mark on the business. They are actually concerned that their pricing will tumble to realistic, affordable rates...unless their clientel can justify the plush robe and slippers.
I believe the consumer is speaking loudly and the massage industry should listen! I have been a small business owner, worked in a health club, several spas and massage locations throughout my career. I am NCTMB and licensed in South Carolina. I work for one of the franchises and I can tell you that many of you are mis-informed. The massage therapists I work with are of the highest caliper, well trained and knowledgeable. Most clients that pass through our front door have experienced paying too much for massage work. They become members because they see value in the franchise formula....it's about making massage affordable...not cheap!
It's time for the massage community to come together. It's time to agree that there is room for everyone to be successful. If you are confident in your ability, meet your clients needs and they in turn trust you and feel you are looking out for their best interest...you have nothing to fear. Peace.
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Comment by Vlad on March 23, 2010 at 8:22pm
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I would be interested to see a tweet or post re: actual % of McMassage franchises owned by MT's.
I'd be interested to know that too.
"That doesn't mean that quality places go out of business, sometimes they do great, but the mass merchant is also right there with them.
Change happens- embrace it, make it work for you. Fight it and you will get worn out and fall."
I agree with that statement.
I think if anyone has had a client pulled by a franchise and then had them come back then the value of THAT client from a marketing standpoint is great. I've had 2 clients that tried them out. When they tell people that they tried a franchise and then came back to me it's the best word of mouth marketing I can have.
I also had a new client who was pregnant and couldn't get in to see the one therapist that could do prenatal massage at the franchise she was signed up with. The story she told me about how long she'd tried to get in (it spanned over months) and how bad they were at communicating with her was good news for me. Now I know that if any of her buddies get pregnant, she'll refer them to me.
I don't see the franchises as a threat to my business. I see them as a motivator for me to be a better therapist. I also see them as an option for people coming out of school. When I was coming out of school there were much less options available.
Although, I have to admit, starting out as an independent therapist today may not be as easy as it was when I was starting out. It's something that I can't really address well or comment on - I think those of us that have a client base have a level of security and coziness part of that comes from the client/therapist relationship. Relationships will never be franchised.
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Comment by Alex Frigino on March 22, 2010 at 9:29am
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I would be interested to see a tweet or post re: actual % of McMassage franchises owned by MT's.
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