Are Deal Days a good deal for you?
March 10th, 2010 • Posted by Bill Bice • Permalink
I was pretty clear in my recent post Groupon sucks about the dangers of aggressive discounting. But what about SpaFinder Deal Days, which are running right now? And the original, SpaWeek (whose motto is now amusingly "Imitiated but never duplicated")?
I think it's a bit more complicated. For one thing, since everyone is discounting at the same time, it provides cover for your spa to do so without the brand damage that comes from heavy discounting through sites like Groupon (not too mention the bottom-line damage from the outrageous 50% cut that Groupon takes). The theory of Deal Days and SpaWeek is to generate PR that drives newcomers to the spa experience. And SpaFinder and SpaWeek are certainly more attractive brands with which to align your spa.
On the other hand, can you give up a week's worth of operating margin? Generally, spas' labor costs for providing treatments need to be in the 40-44% range to drive profitability, but are often higher than 50%. Which means for most spas that there isn't much room in $50 treatments to pay for overhead. I was very happy to see they are explicit that "SpaFinder Gift Cards & Certificates may not be used for this heavily discounted special promotion," because taking another 18% off would be almost as bad as Groupon.
I'm a fan of intelligent discounting that drives long-term business, and for many spas I think Deal Days / SpaWeek qualify, assuming the focus and dedication to create repeat clientele. What do you think?
- What is your experience with SpaFinder Deal Days and SpaWeek?
- Do they bring in new clients that become repeat clientele?
- Is it worth it?
- If you don't participate, does it affect your business that week?
Spa Week has worked well for us in the past. We do not promote it internally. We did one year and were completely scheduled more than a month in advanced and had a wait list. The objective is to draw new clientele.
We have not seen a great response from Deal Days… now in progress.
I tried Spa Week last year, and it didn't pay off. Deal Days brought in more clients than did Spa Week this year (this week). I chose to do Deal Days as I receive a lot of business from Gift Certificate Redemptions for SpaFinder. Additionally, their fee was half that of Spa Week. I did not do any internal promotions for either week. The purpose of my doing a discount was to generate new business; therefore, I felt soliciting my own clients would not be to my advantage. I could easily run my own ad for a discounted rate and not pay the fee of either Spa Week or Deal Days.
For years I have participated in Spa Week — which has been a great marketing tool for my company. This company clearly has it together in terms of organization and structure. This year I was intrigued by Deals Days and agreed to participate, although somewhat reluctantly. As of yet, we have not received any response from Deal Days and it is extremely disappointing.
We are participating in "Deal Days" this week. We have booked one appointment for today. It is a regular client that received email from SpaFinder. We have 2 more Saturday and they are new clients. So for us the price to join "Deal Days" is a total loss.
I have participated in Spa Week before, and my results were off the charts. When SpaFinder contacted me, I was made to believe that "Deal Days" was the same thing. Thus far, I have received not one call from any customer about this — not even my regulars. By comparison, the Spa Week event is far superior to "Deal Days," and this is definitely something I will never do again.
I've been helping SpaFinder promote Deal Days, and unlike some other commenters (who either run their spas offline or are trying to hide their identity) I've heard a lot of success stories from participating spas this week. Many spas are booked solid through the rest of the week-long promotion, although some spas are having trouble getting the word out.
In helping promote the event, I've noticed the most successful spas have been promoting the event online- which gives us the opportunity to re-tweet, blog, and update our Facebook page to amplify their word of mouth marketing. To be fair we're promoting 600+ spas in 39 US states (and DC) it'd be unreasonable to every spa to have a runaway success. However I've heard measurable excitement from consumers, many of whom would be otherwise reluctant to get spa treatment under this economic stress, since these promotions offer a strong and meaningful incentive that encourages brand/spa loyalty.
Last year I participated in Spa Week. The one for Spring was very good. We were booked solid for two weeks, so I decided to do it again for the Fall and it was completely dead. Now I am trying Deal Days with SpaFinder. So far, I have 5 appointments of which 3 are already my clients.
This was our 1st time participating in Deal Days and it did not work well for us. It's been 6 days and we have had only 3 or 4 new customers.
This was our first year participating in Deal Days. Deal Days response was positive and the clients drawn were overall appreciative and look promising in the near future. A few were very demanding concerning the ability to use SpaFinder Gift Certificates and Cards. That was disheartening. I don't know if we will use that venue again. Business was not sufficient enough to cover the costs. But, it was not a bad experience. The exposure was good.
Matt, I am a curious how SpaFinder can advertise Deal Days and then the businesses opt out of allowing SpaFinder gift certificates? This promotes an uncomfortable feeling of "bait and switch" when they go to pay — like LeVonne mentioned. Didn't you all think this through? It almost makes SpaFinder look like the cool "we got a deal for you customers" and then when they pay the spa receptionist is the "big meanie" not accepting the gift certificates.
Really, really think these promos through — because it is hard to get customers and if you do something that looks like they were bamboozled… it is bad all around.
I joined the SpaFinder Deal Days and did OK considering it was their first time doing this and mine. I did not internal advertising either, just did not have the time too. So my 13 Deal Days appointments all came via SpaFinder marketing. I made enough to pay for the ad cost, but I figured this was more about getting exposure. I may offer a similar $50 for 50 for 1st time customers on going… or will look into it. I've got too many Massage Envy's in my town and some people are looking for that 1st time deal and I don't like the idea of cheapening my brand. However, if I do a very "pared down" version of my signature massage just as a sample taste — maybe.
Once again, it seems like another marketing plan that we chose not to be a part of this year. There are a number of reasons for this. First, we are in Fort Lauderdale which now has a highly saturated spa market. Second we do primarily massage therapy. We set ourselves apart from the million dollar mega spas and Massage Envies by offering superior service in a highly personal atmosphere, and slashing prices just doesn't bring in that sort of clientele. I don't know if it works this way everywhere or not, but generally those who find us looking for a deal, continue to look for that deal either here, or elsewhere in the future. The same bunch that will be at massage envy getting a cheap massage next week. It is difficult for us to come up with a bargain treatment at those prices where we can be competitive and still even cover expenses. I realize it is about exposure, but at what cost? Keep your experiences coming in please, I'm excited to hear about how it has worked for all of you. Planet Massage
For spas that have all the bookings they need, there is no need to spend money on programs like this. For spa that need bookings, the only question to ask is whether a $50 appointment is better than no appointment… over time you may find, in your market, that for a week in the Spring and Fall you get no business because you don't participate and spa goers choose to go to a participating spa for a $50 treatment. If this is acceptable, then you have your answer. If you'd rather be booked up than be left out, participate. I'm no longer in the spa industry, but I do understand marketing. I think spas and businesses in general should care about what and who they support. ASK questions. Do you want to support companies that do not hire minorities, or pay women less? If the company has 80% turnover, do you care? Put your marketing dollars where they count but also make sure they are with an organization that has principles and ideals that are compatible with yours. It is the only way to truly change the world… and you can still get rich and be successful at the same time.
I participated in Deal Days and it was successful for my studio. I was a sole practitioner but recently added two new therapists who work on commission only. They each agreed to accept their regular commission rate on the discounted services as a way to try and build up their book. We received a tremendous response. I did not market this to any of my existing clients and we only received new clients who participated in Deal Days. Our week was completely booked and several clients have already booked future appointments. In fact 2 clients signed up for our membership program. I definitely think it was worth it for my studio at this point in time. It got my name out there and gave good opportunity for my new therapists to build their business. Even if many of the clients don't return (I know they won't… just seeking a deal and are not regular spa visitors) the fact that they had a great experience will be with them the next time they do want a massage or facial or know someone who does. It also gave me the opportunity to talk to a lot of new people about the new service I offer. It was definitely worth it for us. I considered doing Groupon, but when they told me that they take a 50% of the already hugely discounted service I said, "No, thank you." I definitely do not need to be killing my body (or my therapists bodies) for no money and on people who would most likely be in search of the next great deal the moment they walked out the door.
I know competition is a good thing, but why would a Company like SpaFinder have to copy an existing event instead of creating something on their own? It seems like the "supposed" industry leader is more of an industry follower.
We have used Spa Week since it came out. This year, we went with Deal Days which was a total loss. We really did not have any clients. The positive side was that the clientele that came from Deal Days was a lot easier to handle than Spa Week's. Also, we were able to rebook the few clients we did get. It’s sad to say that the employees hate doing Spa Week because the clientele is tuff, and we hardly have return clientele… they wait until the next spa week. I would not do Deal Days again, it was a waste of time and money.
SpaFinder Deal Days went well for us. As the Spa Director it is my job to set policy and I ensured that all guests booking deal days services were told at reservation and confirmation that Spa Finder GC's were not accepted for Deal Days services. All the marketing collateral introduced through PR efforts explicitly stated that Spa Finder GC's were not valid — and to tell you the truth we didn't have any complaints as it was properly explained to all guests. As for the clients (90 new clients and 196 services) we were referred from Deal Days time will tell if they turn out to be qualified repeat guests but a large percentage purchased retail and I would do the promotion again.
Full Disclosure: I work for PrettyCity.com, so I am a little biased! First, I think both SpaFinder and SpaWeek are great marketing options for Spas, as both are online and both reach a targeted audience. I can say, from the responses above, it seems as though Deal Days was not that big of a hit, which I believe confirms the fact that SpaFinder is a place where people go to buy Gift Certificates for others, not to search for a spa to visit themselves (probably the clients owners want to reach the most). SpaWeek however, I think does appeals to the actual spa-going consumer, but focuses much of the content on the one week of discounts. My favorite spa site, naturally, is PrettyCity.com, as their discount campaigns are cause-related/themed (think Breast Cancer Awareness Month, National Heart Month, Green & Gorgeous, etc.), and these campaigns are only part of what they do year-round for their audience of Spa, Salon and Medical Spa loving women.