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Thursday, August 26, 2010

Global Spa and Wellness Briefing Paper: Part 2

Last week, SpaBooker VP of Operations, Dan Chandre, explored the impact of the recent economic climate on the spa and wellness industry in the United States. Here, Dan looks further at some of the statistics and innovation in the industry.

What would you consider to be the most interesting statistic to come out of your region in the past 12 months?

The most intriguing, and at the same time troubling, statistic that has emerged in the US spa and wellness industry in the last year has been the overwhelming percentage of single item transactions. Looking at a sample size of over 800 operating spa locations, over 80% of the transactions that occurred over the past 12 months only contained one ticket item[1]. The implications of a statistic like this point directly to the much discussed economic situation and reveal two key conclusions.

First, spa and wellness organizations in the US are doing a poor job of up selling add-on services to compliment the primary treatment. Additionally, the overwhelming majority of the single item tickets are for only the treatment performed, meaning that spa and wellness facilities are not doing a sufficient job at adding retail items to tickets. The importance of a successful retail selling operation is well documented, and adding retail to less than 20% of treatment tickets is not a positive statistic.

Second, the high percentage of single item transactions reflects on consumer buying habits in the spa and wellness arena. Ultimately it is the consumer that makes the buying decision, and this statistic implies that the consumer, while still consuming to a degree, is focusing on the core of their spa and wellness experience and not purchasing peripheral items. The silver lining is that it leaves room for improvement once the consumer loosens the proverbial “purse strings”.

What innovative things have you seen in the spa and wellness arenas in your regions this year?

One innovative trend that we’ve seen in the spa and wellness arena in the US is the growing importance of offering online booking for spa services. As simple as it sounds, the spa and wellness industry has been well behind the rest of the hospitality arena when it comes to offering the convenience of online booking to their customers, and in kind, customer adoption of this method of booking. In Q1 of 2009 across all businesses offering online booking on the SpaBooker system, there was an average of 10 online bookings per month per spa. In Q1 of 2010, that number has jumped to 29 online bookings per month per spa[2]. That’s a 190% increase in the number of online bookings made per spa per month with online booking available.

And what have you done to innovate your own business recently?

Since SpaBooker is an online, SaaS (Software as a Service) tool for spa and wellness companies to manage their business, we’ve focused on helping these businesses more easily connect with the online consumer, and more specifically, the mobile online user. The first avenue we took was to develop the SpaFinder iPhone Application, which allows consumers to search for spas directly on their iPhone, and through integration with the SpaBooker Platform, actually book appointments in real-time. This is a revolutionary step forward for the spa and wellness industry as it brings the concept of real-time booking to the fingers of the world’s most technologically savvy individuals. Secondly, we have optimized the online booking engines of all of our clients to adapt to mobile devices and provide an easy-to-use booking platform for all of our partners. The significant innovation in this regard is that we’ve done the mobile adaptation on their behalf so the individual businesses don’t need to commit time and expensive resources to have it done.


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Tuesday, August 24, 2010

Tuesday Tip Celebrations!

It’s a year since we started the Tuesday Tip. Each week we send out an email to all our partners with a slice of information about how they can enhance their SpaBooker experience. It might be a guide to setting up a popular feature, or the answer to an often-asked support query. Whatever the topic, the Tuesday Tip is opened and enjoyed by our partners all around the world.

The Tuesday Tip this week celebrated its birthday by highlighting how to send birthday emails from SpaBooker. To continue the celebration, the SpaBooker Blog pays homage to the Tuesday Tip by providing some birthday tips of our own.

We recommend you start celebrating clients’ birthdays in three great ways. Each provides a really effective way to drive business and reward your best customers.

1. Happy Birthday specials are easy to set up with just a few steps. Visit System Settings>Specials>Add Special> Follow Steps 4-8. Pay special attention to Step Three, where you will decide how many days before and after the customer’s birthday the special can automatically be applied. When all the steps are complete, select Save.

2. Click here to see the Tuesday Tip’s description of how to send a Happy Birthday email in SpaBooker.

2. If you want to send your clients a more personalized email, use MailChimp to create a birthday template and send an email blast to a custom list. Monthly birthday promotions are great for increasing the frequency of visit. If you’re not using MailChimp already, contact us to find out how to add it to your SpaBooker account.
3.Watch out for those Birthday cupcakes with SpaBooker! In the Details tab of the customer profile, use the Birthday field to record the birth date. SpaBooker will automatically place a cupcake symbol on the appointment and next to the customer’s name prior to and after the actual birthday.

We do love feedback, so if you have topics you’d like to see the Tuesday Tip cover, please let SpaBooker's Partner Success team know.

Happy celebrating,
SpaBooker Blog
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Thursday, August 19, 2010

Robert Scoble Talks with SpaBooker's Own Daniel Lizio-Katzen

Earlier this month SpaBooker's managing director Daniel Lizio-Katzen sat down with building43's
Robert Scoble to chat about the technology powering the SpaBooker platform and some of the
new products in the pipeline. 

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Tuesday, August 17, 2010

Global Spa and Wellness Briefing Paper: Part 1

The Global Spa Summit in Istanbul, Turkey explored the impact of the recent economic climate on the spa and wellness industry in the United States.SpaBooker VP of Operations, Dan Chandre, discusses the very clear and dramatic effect of the economy on the industry.

How has the recent economic climate affected the spa and wellness industry in your region, both negatively and positively?

The recent economic climate has had a very clear and dramatic affect on the spa and wellness industry in the United States. The economic crisis that all major industries experienced in the United States was exaggerated in the spa and wellness arena due in part to the period of time that immediately precipitated the collapse. Prior to the economic downturn, the spa and wellness industry in the US had experienced its most prolonged period of expansion and economic success. This, combined with the fact that most consumers budget for spa services comes from their disposable income, exacerbated the economic contraction that resulted from the poor economic climate. The combination of an expanded marketplace and the economic downturn resulted in distinct primary and secondary reactions in the spa and wellness industry.

The primary reaction of the spa and wellness industry in the US was an immediate market contraction and correction. In particular regions of the US, particularly Southern Florida and Southern California, the number of businesses in our industry had grown by so much that the supply greatly outweighed the demand. In areas of overcapacity such as these, the market saw immediate business closures throughout 2009. Of the businesses that survived in the US, over 45% reported reduced revenues compared to 2008.1 To survive, business owners needed to adapt to the economic climate.

One of the most prevalent negative effects of the recent economic climate is the propensity of spas to routinely and deeply discount the price of the services offered. Discounting is a slippery slope and one that has potentially irreversible effects. The industry is continually trying to strike a balance between rising overhead and labor costs and shrinking profit margins. Discounting only narrows the available margin for business owners. Furthermore, wide-spread discounting of services weakens the industry on a whole by devaluing not only the treatment, but also the provider performing it. Once an industry conditions its customers to expecting discounts as a pricing philosophy, it can be nearly impossible to revert to “rack rate” pricing.

Even when faced with challenging economic factors, the best and most industrious business owners find ways to steer through the difficult times and emerge on top without destroying the value of the services they are providing. There has been a short term shift from concentrating on the acquisition of new customers to focusing on the retention of existing customers. The spa and wellness industry in the US has reverted back to focusing on the core customer; the customer that existed prior to the massive expansion.

The shift to retaining core, loyal customers consists of three primary manifestations. The first is the growth and emergence of membership programs that focus on providing value to clients who are already consuming services on a regular basis. Contrary to traditional membership models that are designed to benefit the business through breakage, these membership models are designed to provide intrinsic value to the core consumers that are already spending; essentially providing them with added incentives to continue their spending habits and even increase their frequency of visits. A second trend is the increase of loyalty programs specific to spa and wellness operations. A parallel can be drawn to other hospitality industries, such as hotel and airline, which have been years ahead of spa and wellness with regards to loyalty and point programs, but to which our industry is now catching up. These programs provide an excellent and proven way to encourage customer loyalty and repeat spending. Lastly, more than ever before, spa and wellness businesses are leveraging existing clients to be the source of new clients. By structuring beneficial referral programs, spa and wellness businesses are able to capitalize on the social networks of their existing core clientele to grow their business.

Look out for second installment of Dan Chandre's Global Spa and Wellness Briefing Paper in the coming weeks.

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