SpaFinder Acquires SpaWish Gift Certificate and Gift Card Business; Expands Spa Gifting Program to Include Vast Salon Market
March 11th, 2008 • Posted by Stephany Toman • Permalink
SpaFinder, through this acquisition, has officially added the vast U.S. salon industry to its spa gift program, while further expanding its reach into traditional spa retail channels.
"Spa & Salon Wish will provide a new dimension to our business with a huge upside for spas, salons and consumers." said SpaFinder, Inc. Chairman & CEO Pete Ellis. "It opens the door to us to bring thousands and thousand of salons into our gifting network while providing us with an opportunity to reach a much broader audience eager to enjoy spa and salon experiences."
What is the fee to list my salon & spa?
I just turned down the offer to join Spa Wish because they said I had to treat each gift certificate as though it was cash with "no exceptions." I do not offer my advertised specials to SpaFinder gift certificate holders. 3rd party gift certificates are excluded from advertised specials, discounts and offers. SpaFinder does not have the "no exceptions" clause in their agreement. Can you afford to pay for advertising, give a 15% discount in the offer then pay them 17% on top of that? I understand that 0% of 0 is zero but I am a solo practitioner who works by appointment only and do not wish to share my discounts with third party gift card holders. I hope SpaFinder does not change my "contract" and add this new clause.
You are so right Stephanie. Looks like SpaFinder is creating a monopoly, first SpaBoom purchasing an interest in them, then Spa Wish. They are also involved with the global spa. Their fees are high for what you get and they compete with spas by selling their gift certificates near spas discouraging the sale of your own. They are in the Walgreens, Safeway and Costco by me. Why walk next door to the spa to buy a gift certificate. Then I am insulted with the Spa Wish is for the low end spa/salon and SpaFinder for luxury spas. PLEASE…
Dan and Stephanie,
I am the CEO of SpaFinder in New York City. Hopefully we can help to communicate between us various issues that arise out our business model. One of the things that we see over and over in businesses is either misinformation in the market or miscommunication. I will say that our messages from SpaFinder and Spa and Salon Wish is so large it is easy to get confused, as we cover a lot of product for the industry. Take this as the basic message… our company is here to help spas grow their market-share and increase not only revenue but profits… without spas there is no SpaFinder. Everything we do in the company is to find models to bring customers to our spa partners and at a cost that works for both sides… this means that the customer, spa, vendors that send us customers, and SpaFinder must win. If any side of the equation does not win, then the business model is short-term and we have invested for the long-term. Our model strives to find a balance between what will work in all instances, thus our pricing system. Let's just think about this a second, a person is looking for a last minute gift-they are at Walgreen's–See SpaFinder Card (something by the way no individual spa can do as chains are national and need national program). This person thinks spa is a nice personal way to give a gift–purchases card-this triggers a 15% fee paid to the seller and distributor–and as a note these purchases are 100% gift purchases not for personal use. No reason. The sale and production of that card costs SpaFinder another 3%. Hopefully you get the picture here, there are costs but this card brings in new revenue to our spas 90% of the time even with our seasonal COSTCO program. (We only sell at COSTCO on holidays as we do not want a discount card in the market year round… we all agree on that issue.) SpaFinder pays out over $2 million a month to spas in our programs and the letters and emails to our offices daily from spas thanking us for our marketing efforts on their behalf are many. One other note on this was that 5 years ago spas were complaining about the payment model, mail in certificates and get paid a few weeks later thus hurting their cash flow, well we went to online redemption and ACH bank deposits for spas on a weekly basis… submit a redemption on Monday–get cash in your account in a few days. Within a year we will have moved this to instant payment through our SpaBooker program, more on that later. One fact that is an huge untouted benefit about being on our redemption programs is the FREE business we send spas. By this I mean our site is also a directory or Yellow Pages for spas. Those spas in our marketing programs get customers who have searched us for spas and go to those spas WITHOUT GIFT CERTIFICATES and at no cost, as the customer used SpaFinder or Spa and Salon Wish to find a spa in their area. So more ways to get customers… here is a number to think about–this week over 105,000 new and unique customers will have come to the SpaFinder site to find a spa… some with certificates and others just looking for a spa… the break-down is about 50/50. A huge benefit that cost nothing for our spa partners to get to consumers that use us as a directory. In fact another thing to understand here is that our thanks are 100 to one on issues like yours. We have 6 full-time people working with spas on the customer service plus a call center that is 24/7 with a huge staff. This all adds millions of dollars in costs each year to make sure our programs are first rate for all concerned.
Long winded here for sure but love to try to communicate another side. On the Spa Wish component.. this is about us driving more business to both spas and salons. Here is something that needs to be communicated and hopefully beneficial to see… this card is sold mostly in $25 denominations thus it costs $4.25 to get a customer that should spend $50 to over a $100 with a spa or salon… pretty cheap customer acquisition cost and you only pay when the customer shows up, something newspapers, radio, and printed marketing cannot claim. Regarding Spa and Salon Wish, do not know were the communication went to cheaper spas vs. luxury… at issue here is that we do not redeem these certificates through get-a-way spas where people stay overnight–this is a day spa and salon only card. It is not low end but another tier of distribution. That is the difference.
You might be tired of reading by now but let me address several other issues. We invested in SpaBoom because we saw that their product was a fabulous product offering for spas to sell their own gift certificates and KEEP ALL THE MONEY. We liked the fact they help spas in a technology area that they need help in. We invested in them so they could get the message out and help more spas… and know this… no one gets fat over their charges and the investment was used to support SpaBoom's efforts and to the huge benefit of spas using their instant gift certificate programs. SpaBoom is a very very great company for spas to work with. A simple investment for us as it helped the industry. Now for more help to the industry, recently we launched a new online booking platform for day spas called SpaBooker. The reason for this model is pretty simple, we are a technology driven company and see how consumers use the internet to spend their dollars. Our new SpaBooker program went as far as actually driving down your total costs in systems like this and many spas have contracted and use this program and find it is COST NEUTRAL, meaning it cost them nothing for a point of sale management system that brings them customers. One thousand spas will join this booking program in 2008. Too lengthy to get into here but I think you might want to look at http://www.spa-booker.com and see the program. We spent years working on this program and designed it in a way that spas would find it a no-brainer to use as it grew the business and at a very small to no cost. We really strive to be a GREAT partner to do business with. This is our whole model. Lastly you mention the Global Spa… not sure why but let me say that the name is the Global Spa Summit. This organization was formed by senior industry leaders from around the world-Europe-Asia-Middle East-and North America. The whole basis for the summit is to grow the industry and find solutions for problems we all face. Those problems are things like labor shortages, available financing for spas, use of technology, management training, going green, latest trends, marketing and such. All things that help to grow this industry on a global basis. There were world leaders from the spa industry in attendance who met to discuss and find solutions to issues facing this industry. All of our efforts in running our business and support of the Global Spa Summit are done to encourage the use of spa and the growth. We are your friend, not your enemy. I will gladly talk anytime to anyone regarding the statements I have written here… and gratefully some of you have taken the time to call me… direct NY line is 212-716-1210.
Thanks for reading and for your comments which sparked this dialog. Pete.
Whew Pete! That was a long winded response!
I appreciate your feedback and dialogue all the same, however here is my point of view that I think you missed.
I am a lone reed… the little shop around the corner
Sound familiar?
I understand what you are saying but it doesnt apply to me unless I can make exceptions. I have to make a lot of money at the end of the day to cover my "solo" expenses/overhead.
every dollar counts.
Again, I appreciate your response and love SpaFinder and especially SpaBoom… I have referred several business friends to both to sign on.
Warmest regards.
Stephanie, we make the model work the best we can for all concerned. At the end of the day if a spa has a good tracking our model it will reveal that we return more than any other source of marketing/advertising dollars invested. That said, thanks for being a partner with us and if ever you need assistance please feel free to contact either our customer reps or me personally… we are right in the trenches with you. Many Thanks, Pete
Stephanie, if I could chime in here — you should look at pay-per-click advertising with Google. It's called "Google AdWords." So cheap! So immediate! You can set a budget of say $40 a month. Customers find you by searching on your unique key words. I can help if you need any assistance. I have been doing Google AdWords for 3 years now and it is awesome! Janet at Cleopatra's Day Spa Fort Collins Colorado. Search us. Love to help!