Culture Counts When It Comes to Growth

Written by Terri Maxwell

There’s a growing sense in most corporations that advertising is becoming less effective. There are many well documented-reasons why this is true, and yet most c-suite executives continue to approve ridiculous advertising budgets year after year. Often, the reason executives continue to invest in advertising is quite simply because they want to grow, yet don’t know of any other way to get there.

Conversely, there have been numerous studies showing that show companies that practice Conscious Capitalism perform 10X better. Often, “conscious businesses” can reduce their advertising spends by simply improving their culture. Yes…creating a desirable culture can lower your marketing spend.

To better understand this phenomenon, I set out to compare two brands in a similar industry, each with vastly differing business practices:

Hand & Stone Massage and Facial Spa: One of the fastest growing franchises in history is none other than Hand & Stone Massage and Facial Spa. Taking a page from Massage Envy, this brand invented a better product (i.e. well-lit facilities, including both facials and massages, and spa-like amenities) and quickly grew. Leveraging the start-up capital of franchises, on the surface it looked as if this brand was meant to be a superstar. However, if you look beneath the surface you’ll find massive staff turn-over, customer-unfriendly business practices, and a growing sentiment of distrust within its culture.

The global brand has a 3.3 star rating on Glassdoor, and the Addison franchise where I am a member, has a 3.6 star rating on Google.

Granted, there are several Hand & Stone Spas with better reviews, but the two spas where I held memberships both had the same issues: massive turn-over, and a culture of distrust.

The brand spends oodles of dollars each month on digital and direct mail advertising, as well as outdoor (e.g. billboards, etc.) and social media marketing.

On the other hand, one of my all-time favorite spa brands is Milk & Honey. I’ve become a fan of their products and their overall customer experience. Google reviews are predominantly above 4.6 stars, and Glassdoor reviews range from 3.6 to 4.4. They were named one of Austin, Texas’s “Best Places to Work,” and developed a program for employees called “Spa Partisans” to help staff thrive at work and in their community.

Moreover, for open positions on Glassdoor, great care is given to describing their company’s culture, and discussing their competitive benefits, sustainable products, and competitive healthcare benefits for staff (unheard of in this industry).

Although Milk & Honey is a higher-end brand that appeals to a more discerning customer, I was fascinated with the difference in Milk & Honey’s reputation and the fact that they consistently grew despite spending very little, if any, on marketing.

I reached out to their Founder and discovered that Milk & Honey’s secret to growth is placing their company culture first, and then secondly focusing growth initiatives on building relationships in key markets rather than on advertising. Most importantly, they allow their superior service to customers to speak for itself, and as a result, customers refer others through word-of-mouth which has resulted in increased brand awareness and expanded growth across Texas. In addition, they maintain a commitment to sustainable products in an industry not known for sustainable practices.

Although no company is perfect, ANY company can commit to creating a better workplace culture as a key to profitable growth. And, in an era where marketing is becoming more expensive as it becomes less effective, this might just be the path to experience real growth.