Each week, we seek out expert advice to help a small or medium-sized company overcome a key issue.
Dwight Hayter, owner and president of the Manitou Springs Hotel and Mineral Spa, remembers his surprise in 2010 when he was told that the spa's pool, the focal point of the business's operation, was being shut down by Saskatchewan health authorities over concerns about the safety of the water.
The problem: A buildup of calcium carbonate had blocked some pipes that pumped in water from Little Manitou Lake, a salt-water lake its proponents say has medicinal properties. The blockage prevented the spa's pipes from being properly cleaned and maintained, which posed a health risk to bathers, the Saskatoon Health Region decided.
It was not an easy fix, because the facility, in Manitou Beach, Sask., is not an ordinary mineral spa. Located about 125 kilometres southeast of Saskatoon, the saline lake that provides the water for the spa's swimming facility is so rich in minerals that it has been compared to the Dead Sea.
Nevertheless, Mr. Hayter spent several months and $400,000 to fix and test the spa's piping and water filtration system. The pool was reopened six months later, but not without a cost: The business lost about 60,000 visitors and $2-million in revenue in 2010, Mr. Hayter estimates.
Mr. Hayter, who took over the business in September, 2009, following his father's death, had begun a $2-million renovation of the property, which includes a 102-room hotel, gift shop and restaurant, before the shutdown. The renos were meant to attract new business but, because of the closure and news reports surrounding it, Mr. Hayter's goal changed to regaining customers.
He took other measures to encourage the return of visitors, who had numbered more than 1,200 a week before the shutdown, including advertising special deals, such as buy one night and get one free at the hotel.
The marketing initiatives had some success; visitors gradually returned in 2011 and 2012. While the numbers are now near where they were prior to the shutdown, the deep discounts offered to entice clients back means it is taking Manitou Springs longer to make up for the renovation costs and lost revenue, and get the number of customers up to where he'd like, Mr. Hayter says.
He worries about lingering negative perceptions because of the shutdown. "It's obviously not a positive thing, not in the mind of the consumer. People will get an impression, sometimes the wrong impression, when they hear in the news that a business has been shut down by the region's health department because it had 'dirty' water. Even if that wasn't accurate, it can take time to get them all to come back," he laments.
The spa's "remote location" is also a hindrance, he says. "Our biggest struggle from the time of the shutdown has been to let people know that we are again open for business. … A lot of people simply don't know we're here," he says.
Mr. Hayter is trying to find ways to recoup the revenue lost from the 2010 season, show it has dealt with the issues that led to the closure, promote the facility's improvements, and boost business.
"If it wasn't for the shutdown, we would be a little further ahead of our plan in terms of our visitor numbers, but we would be way further ahead in terms of the profitability of the business," he says.
The Challenge: How can Manitou Springs combat any lingering negative public perceptions and attract more business?
THE EXPERTS WEIGH IN
Melanie Greco, owner, Get Ink PR and Communications, Toronto
They've had two seasons under their belt since the shutdown, they've made some renovations to the property and they have a unique product. Now they need to get the word out to as large an audience as possible, especially to those who have never heard about the health department ruling.
This is where earned media can really help a business. Organizing visits for credible journalists and using social media strategically will help to overcome any lingering doubts the public may have and to shape the perception of those who are hearing about the spa for the first time. If the media are the ones who brought news of the shutdown to people's attention, they can also be the ones who spread the word of the turnaround and create buzz around the facility.
Barry O'Neill, managing partner, Zed Financial Partners, Toronto
Perception can be a hard thing to overcome. The spa should focus on establishing a new image and developing a new perception not linked to the past. Your loyal customers will still come back and you will start attracting new people. Little things like redoing the website can have an impact on the image of a business.
Depending on your target market, you may want to partner with reputable brands or local attractions to draw in visitors. Find brands that are targeting the same demographic and package a promotion that both you and your partners can benefit from. Perhaps organize a "family day or weekend" linking your establishments with other local attractions.
Or enlist one of Saskatoon's best chefs to get involved in a special promotional package focused on a "romantic couples weekend" to the hotel, where the guests get a dinner, a hotel stay and a chance to try out the upgraded spa.
David Patchell-Evans, chief executive officer of GoodLife Fitness, London, Ont.
I would make a big deal about the renovations and say to people, "Not only do we care about your business, we have done things to improve and we intend to do things right from now on." Create a press release that invites people to come and inspect the new, ultra-clean place. Say that pipes can get clogged, and tell customers that you've cleaned it and fixed it and made the pool better.
Anybody can make a mistake, and even if it's not intentional, you learn from it and do it better in the future. I always believe the best thing to do is just tell the truth.
THREE THINGS THE COMPANY COULD DO NOW
Create a new image
Try to engage the media and use social media to help overcome lingering doubts, draw attention to the spa's upgraded offerings and create a positive story.
Put together promotional packages with others
Partner with other local attractions, chefs, tour operators and others aiming for the same clients to draw in visitors.
Rely on your track record
Help your loyal customers assist in your recovery. Offer them incentives to introduce new clients to your business.
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