Tuesday, June 22, 2010

SpaBooker Tuesday Tip: Easily Generate Revenue with Custom Instant Gift Certificates

eCommerce, and specifically the sale of instant printable gift certificates, is such an important element of successful spa, salon, fitness and wellness facility in today’s market. The ability to generate revenue without having to do anything (any action from yourself or your resources) is a great opportunity. Considering this importance, how can you accelerate your instant printable gift certificate sales? We suggest utilizing custom gift certificate templates as an easy way to keep your online gift certificate offerings fresh.

In the SpaBooker System Settings > Gift Certificate Templates, you have the capability to design your own, unique custom gift certificate templates. You can create as many templates as you like and make them as targeted as necessary. Creating specific templates allows you to create new opportunities to sell your gift certificates. A template perhaps for the wedding season, or even a unique template to celebrate July 4th. If you keep the templates creative and make them targeted, your clients will find them timely, relevant, and alluring. An increase in appeal can only result in increased sales with a little work from you.

Thursday, June 17, 2010

Yield Management and Your Business

You may have heard the terms yield or revenue management (they’re synonymous) usually being discussed by a consultant at an industry event. And, if you’re like some people here at SpaBooker (we won’t name names), you wouldn’t be blamed for starting to get a little drowsy after the mentioning of these often confusing terms.  What we would like to do is to demystify the topic and talk about a few practical applications. 

First off, yield management doesn’t need to be a scary.  To really understand what it is, let’s learn a little about its history. Yield management, as defined by Wikipedia, is the process of understanding, anticipating and influencing consumer behavior in order to maximize revenue or profits from a fixed, perishable resource (like your Tuesday, 10am treatment times). In its simplest form, this means changing your price based on customer demand. 

The invention of yield management is widely credited to the airline industry, specifically to American Airlines with its launch of Ultimate Super Saver fares in 1985.  Prior to the launch of these fares, if you were flying on a Q class ticket then you could be assured that you paid the same price for that ticket as any other passenger flying on the same class of service.  These new fares ushered in our current era of pricing, where airline ticket prices fluctuate on a daily, hourly, or even minute-to-minute basis. After being introduced by the airline industry, the hotel industry (especially in Las Vegas) was quick to take it up. Today, revenue management is used in every large retail industry; from advertising to air tickets, from e-commerce to car rental, prices are changed based on customer demand.  So, how does this affect the Spa and Salon industries? The answer, of course, is - in a bunch of different ways.

If your business is anything like the thousands of spas and salons that use SpaBooker; you’re open six days a week (hopefully Tuesday – Sunday, but that’s a topic for another time), and your schedule probably breaks out into three buckets based on how many of your rooms and stations are booked at the same time – let’s call this Occupancy.
  1.  Peak – 70%+ Occupancy (Saturdays from 11am – 4pm)
  2. Shoulder – 50-70% Occupancy (Friday’s from 12pm – 3pm)
  3. Off-peak – Under 50% Occupancy
The challenge is how do you increase revenue during your peak times, and drive more occupancy during your shoulder and off-peak times?  The answer is, well, there are a few answers depending on your market segment.

Let’s outline a couple scenarios.

Scenario 1 – The Luxury Market
For businesses that play in the luxury segment, discounting is generally considered a no-no. So the best way to manage your yield/occupancy is to utilize different treatments at different times.  For example, we have a very successful luxury client that would never discount, but they do offer “mini-treatments” during off-peak times.  While during peak times, the minimum treatment length is 75 minutes. If you take the price of the treatment and divide it by the length to determine the price per minute (PPM), the mini-treatments offered during off-peak times actually cost less per minute than the peak treatments, but since there is no discount on the offer, it’s opaque to the customer. Put plainly, this means that a 30 minute Swedish massage mini-treatment that costs $45 has a PPM of $1.50, while the 75 minute Aromatherapy massage that costs $150.00 during peak times has a PPM of $2.00, or a 33% premium – not too shabby, eh? 

Scenario 2 - Mid Market
What about spas that are more mid-market? If you’re not allergic to discounts, one of the best practices we see in this segment is to offer off-peak (and sometimes shoulder) discounts.  For instance, many of our customers offer morning discounts. Some discount across all services; perhaps offering a 30% discount from 10-12pm,while others specifically target treatments with better retail opportunities, like facials.

Scenario 3 – Membership Programs
A great way to drive sign-ups for your membership program (you have a membership program, right?) is to offer killer benefits. These can come in the form of discounts, free treatments, retail therapy, etc. but the key factor to remember is that they don’t have to be the same all the time.
One of the best practices we see is businesses taking a page from the ski industry, especially the idea of the “locals season pass” otherwise known as no skiing on weekends or holidays.  How would this work for your business? How about a two tiered membership program, one with a monthly membership fee that is higher than the other; which of course allows benefits to be used all the time, versus just during off-peak and shoulder times.

Of course, there are lots of other scenarios, and the software you use to power your salon or spa should allow you automate all of them. If it doesn’t, then you might want to contact us.  Regardless of the scenario, the next step is calculating how much to discount or where to price your treatments, and unfortunately the answer is a little fuzzy.  It really depends on the type of business that you run and how you compensate your employees.  However, the place to start is to calculate your fixed costs per day (rent, utilities, insurance).  Once you have a clear idea of what it costs to be open on each day of the week, it’s pretty straightforward to come up with your fixed hourly costs.  And once you have those, the world of yield management is your oyster – really – and you can figure out exactly how to price your services.

How you ask? If your business has eight rooms/stations, is open from 10am – 7pm on a typical day, and your hourly fixed cost is about $30, then you know that you need to earn $30 plus staff costs per hour to be profitable. Let’s say that your service staff make $10 per hour plus 40% of any services (we know we’re generous) and your typical service rate is $1 PPM. If you have 2 treatment staff working during the off-peak time (10am to 12pm), and discount your service rate by 30%, then you’re covering costs.  Where’s the math you ask, here:

Employee 1 = 120 minutes x $1 per minute – 30% = $84
Employee 2 = 120 minutes x $1 per minute – 30% = $84

Fixed Cost = $.50 per hour x 120 minutes = $60
Employee 1 Cost = $20 ($10 per hour x 2 hours) + $33.60 (40% x $84) = $53.60
Employee 1 Cost = $20 ($10 per hour x 2 hours) + $33.60 (40% x $84) = $53.60
TOTAL COST = $167.20

PROFIT = $.80

Now, we know that this is over simplified (we didn’t factor in payroll costs, etc.) but look at it from another angle, if those time-slots went unsold then you would still have spent $100!

If you’ve made it this far, then you have probably figured out the key to successful yield management, but if you jumped ahead for the conclusion, here it is.  The key to successfully using yield management is understanding your fixed costs and realizing that every room or station that goes unsold during your open hours is costing you money.  Once you not only understand this, but believe it (listen to us now, hear us later) then creating a strategy for adjusting your pricing or treatment menu by time-of-day, day-of-the-week, and even seasonally is the next step.

If you would like to learn more about how SpaBooker can help automate your yield management strategies, please contact us for a free consultation.

Tuesday, June 15, 2010

Gaining Business From Your Walk-in Customers

With customers flying in and out of your business all day, there may be times when it is easier to get your client in and out with as little exchange of information as possible. When these instances arrive, you can skip on the need to match the purchase with a customer name if using SpaBooker, and instead place an order for a Walk-In customer. By using the Walk-In option, you are able to place a new order with a few strikes of the keyboard.

Without needing to have a booked appointment, you can easily start a new order by visiting the Orders Tab > New Order > Walk-in Customer link. Once the order is initiated, you are able to sell products, gift certificates and services. When you arrive to the Enter Payment page, you have the opportunity to enter the customer’s contact information or continue without collecting any client contact information. A one-time only customer still means revenue to you, so visit the Walk-in customer link for a quick and easy check out process.

Wednesday, June 9, 2010

Premiere Orlando Report

We just got back from the Premiere Beauty Show in Orlando, FL and what a show it was. If you work in the spa or salon industry and have never been to a Premiere event, I suggest you go.

The shows are full of energy that you can feel throughout the entire conference. This recent show in Orlando was no different. There were tons of great classes, workshops, and even Tabatha Coffey from Tabatha's Salon Takeover was there to emcee the event.

And of course, SpaBooker was there to speak to so many wonderful people in the spa and salon industry about our industry leading technology. That is the great part about doing and going to trade shows. In the short time we are there, we get to meet so many great people, who have their pulse on the industry and are looking to better their business like our newest customer, who is in the photo to the right with two lovely members of the SpaBooker team.

Not only did people get an opportunity to learn about our product at our booth, but they had a chance to enter to win an iPad, which we are raffling off and were treated to some delicious espresso.

Kudos to the Premiere Show Group for making this such a wonderful event.

See everyone again next year!

Tuesday, June 8, 2010

Promoting Online Booking

Online booking can play a crucial role in the success of your business, especially by attracting more customers. As a partner of SpaBooker, adding online booking to your website is as easy as copying and pasting a link. Once you add the booking engine to your website, it is time to inform your customers. The team at SpaBooker has a few tips for promoting online booking.

To start, update your voice mail recording to announce the option for online booking from your website. Also, create a sign for the front desk that attracts attention and update your business cards to include the web address where the customer can book online. An important trend to take advantage of is social networking sites such as Facebook and Twitter. This is an excellent way to keep your customers informed and promote your business at the same time. A few other ideas are to send out an email blast, advertise through radio and newspaper ads, or write a press release announcing your online booking. These are just a few simple ideas of promotional tools that will encourage online booking and keep your customers well informed. Online booking can really help your business, but only if you let your customers know that it’s waiting for them!

Friday, June 4, 2010

Using Pencil & Paper To Manage Your Spa?

Are you currently using pencil & paper to manage your spa? If the answer is yes, then you might want to read the latest SpaBooker success story.

Nobody likes change, especially if they have been doing something the same way for a long period of time. We were working with a spa in Florida that had been using pencil & paper for the past six years.

However, that didn't prevent them from signing up for an online demo. Once they participated in a customized  demonstration of all of the features that SpaBooker offers, they quickly realized that their previous method -- while convenient -- was costing their business money. With SpaBooker's online booking and marketing capabilities, this spa was quickly, and easily, able to expand their visibility and reach new customers.

At SpaBooker, our implementation team is filled with experts that help new customers transition from paper appointment books and legacy software systems every day.  If you're curious about how SpaBooker's online scheduling system can improve your business, sign up for a free consultation today.

Check back soon for another SpaBooker success story.

Thursday, June 3, 2010

Charge-up this weekend with SpaBooker at Premiere Orlando

Going to Premiere Orlando this weekend? Stop by SpaBooker booth #2020 and power up at our charging station with a complimentary espresso - and while you're there, enter to win a brand new Apple iPad!

While you're charging up, you can see just how well SpaBooker's spa software works on the iPad, iPod Touch, and iPhone. We look forward to seeing you!

Tuesday, June 1, 2010

SpaBooker on the iPad

Did you know that SpaBooker works on the iPad without even installing a dedicated application? The easiest way to use SpaBooker on an iPad is to treat it like a normal computer. That means open mobile Safari, enter and click customer login. Once you login, you’ll see your appointment book and you’ll be able to create appointments, view customer records, and process payments.

While you can use every part of the SpaBooker system on your iPad, there are a few things that can’t be done since it doesn’t have a USB port. Swiped credit card transactions won’t work, and there is no way (yet) to print receipts. Saying that, with SpaBooker’s quick and easy ‘email receipt’ functionality, you can offer your guests this solution.

Finally, keep in mind that if you come to a page that requires scrolling, but doesn’t seem to work with one finger, try it with two fingers pressed together. If you find new and cool ways to use SpaBooker on your iPad (or even bugs), let us know!