Spa Business Management

Problem: You offer too many packages and some that are excessively long.

• Can be costly to track and train employees to perform
• Are often complicated and time-consuming to schedule
• They expose your business to big business losses when cancelled
• They decrease your retail sales

Solution: Reduce your packages to 3 in total and most less than 4 hours in length.

• Always include a strong retail producing service (such as a facial) at the end of the package to increase the chance of purchases.
• This plan opens more of your prime time appointments for established clients — the most loyal, referral active and retail buying clients you already have!

Posted in Preston Professionals, Spa Business Management • Comment »

DiscoverSpas points us to the ISPA 2006 Consumer Trends Report — nothing shocking, but some good stats on the industry and a few interesting tidbits:

• 31% of all US spa goers are men, barely inching up from their 2003 study at 29%
• The average spa goer has visited a Day Spa 2-3 times in the past 12 months
• 57 million US adults have been to a spa in their lifetimes and 32.2 million in the last year
• Stress reduction is the biggest driver for spa visits

The study points out one trend I particularly like, which SpaBoom spas already know:

Posted in Spa Business Management • Comment »

Ah, credit cards. Most of us love 'em as a consumer, and hate 'em as a merchant.

Whether doing business on the Internet or not, credit card fraud is a problem for all businesses, and can impact you no matter how careful you are.

Here are two actual instances of credit card fraud we've heard of over the past few months. Could you find yourself in a similar situation? We'll give you some helpful tips to help reduce your exposure, after these examples.

The Boyfriend's Credit Card

One spa had a regular. For a year, she came in once a month, usually lavishing herself with exotic services and making regular product purchases. One time, she started using her boyfriend's credit card to make her purchases. The spa reluctantly accepted the new credit card — because after all, she was a regular — and they even called the boyfriend who gave them his verbal approval to use the card. This happened for several more months, with some months raking up several hundred dollars of product sales. After 5 months of this, the regular stopped showing up. Soon after, they received chargebacks for all the previous purchases on the boyfriend’s credit card. Sure enough, the boyfriend denied he had ever given permission for the regular to use the card.

The Overseas Purchase

Another spa received a phone call for an over-the-phone purchase of product. Lucky them — it was an order for almost $5,000 worth of product. There was just one catch: The caller was overseas. Nigeria to be specific. He spoke perfect English, and explained that the reason he’s ordering her product, is because he’s an American who can’t get decent products in Nigeria. So, he wanted to order in bulk to last awhile. He even had an American billing address “to prove he’s an American.” The spa accepted the order and shipped the product, only to learn later that it was a fraudulent order using a stolen credit card. The product is hung up in Nigeria, and the spa is out the cost of the product.

These two examples highlight how even discriminating merchants can become the victim of credit card fraud or abuse. Remember the following:

• Consumers can dispute credit card charges (called a chargeback) up to 6 months after their purchase.
• Most banks will immediately take the funds out of your account and charge you a fee for every chargeback, and some will even charge you additional fees to dispute the chargeback.
• It is difficult to dispute a chargeback, and winning depends on a number of factors (Did you imprint or swipe the card? Can you prove it was the card owner that presented the card? Can you prove they received the product or service promised and of the quality agreed to?)

Eventually, you may get caught up in credit card fraud. Don’t get angry or upset. It's the cost of doing business. However, please consider following these suggestions to reduce your exposure to credit card fraud:

• Always ask for identification when accepting credit cards. Make sure the picture, names and signatures match.
• Require people to use their own credit cards (i.e. don’t let someone borrow another’s credit card). Remember the Boyfriend’s Credit Card example.
• Don’t ship product out of the US.
• Don’t ship product to anywhere but the billing address. If the customer really needs the product to be shipped elsewhere, ask questions. Does the other address make sense? I.e. a work address located in another state (doesn’t make sense). If it’s a gift for another, is the order abnormally large? If so, have the customer fax in an order validation, with a signature and copy of their credit card and driver’s license.
• If anything appears out of the ordinary, don’t be afraid to call the issuing bank for the credit card (phone number is always listed on the card), to make sure the credit card is valid and circumstances are appropriate.

What other tips or suggestions do you have to reduce credit card fraud?

Posted in Spa Business Management, General • 6 Comments »

In American Spa magazine, Peggy Wynne Borman asks a good question:

We tend to recommend paring down your services menu for Instant Gift Certificates for exactly this reason: too much choice can make it very difficult to choose. Anecdotally, a very long services menu appears to reduce online sales.

As Peggy's article on The Simple Life points out, simplifying your services menu can also streamline your operations and increase your profits.

Posted in Spa Business Management • 1 Comment »

We don't think so. Most buyers of Instant Gift Certificates are looking for a great gift for Mom. They are husbands, sons and daughters. The closest relative Mom could possibly have. These buyers will choose a discounted offering if available, but are not motivated by price. They are motivated by love.

So, how do you appeal to these buyers? By selling love.

Offer them special packages or services … just for Mom. Use creative names with Mom as the centerpiece, such as “Pamper Mom” or “Soothing Soak for Mom”. Use a description that really makes the point that this is a special service, just for Mom, and only offered now before Mother’s Day.

Save the discounting for the slower months.

Posted in Spa Business Management, Spa Gift Certificates • Comment »

First, the bad news: spas aren't very successful at selling products online.

Today, there are two primary ways to sell product online. First, you can hire a web designer to build a "catalog and shopping cart" website for you. The good web designers will use pre-built packages, to keep costs down. They will look nice and be somewhat easy to maintain. Despite the pre-built nature of the package, your upfront expense will still be somewhat significant. The second way to sell product is to take advantage of a vendor who is already selling product online, and you refer business to that vendor using a "reseller id" from your website. The advantage of the first method is you get all the revenue associated with the product sales (less your costs), while the disadvantage is you have to maintain the catalog, handle fulfillment, and keep your website updated as new products and pricing comes out. The advantage of the second method is it's very inexpensive to start, and you don't have the responsibility of managing the ecommerce transaction and fulfillment.

Either way, almost every spa or salon I talk to, has indicated dissatisfaction with the level of sales being generated. By almost every measure, these folks feel their effort has been a waste of time.

Online Instant Gift Certificate sales, in stark contrast, work very well for spas and salons.

Why the discrepancy? I don’t know, but I would love to hear your comments. What are your experiences with product sales and what have you done that you feel boosts product sales from your website?

Is there another way? Well, I want to fill you in on two options to consider.
First, SpaBoom is considering providing a built-in product capability into its offering, that will behave and work very much like the Instant Gift Certificates do. We feel it should be easy and seamless to sell product on your website. We feel you should have an option of whether to fulfill orders yourself or have someone else do the fulfillment. How do you feel about this? Please comment or . SpaBoom is interested in talking to vendors or manufacturers to partner with, who desire to enable their spa and salon customers to easily sell product on their websites. If you have vendor suggestions, please . Let us know what vendors or manufacturers you think we should be working with!

Second, and something you can easily do right now, consider enhancing your product and gift certificate sales by merging your products with your services. Make a really cool and unique package or service combo, combining the best of your services and products. For example, offer an “Aromatherapy Massage,” where after the massage, the massage recipient received a supply of the aromatherapy oil used in the massage. Or, in another example, they receive facial cream after receiving a blissful facial.

You would then combine the service and product price into the overall package, highlighting the benefits of both, and really exciting the gift giver, because not only are they giving the gift of a wonderful treatment, but their recipient also walks away with a tangible product after the treatment.

Have you tried this already? If so, share your thoughts and experiences with us!

Posted in Spa Business Management, Spa Gift Certificates • 3 Comments »

When I was talking with Elissa at Betty's, she made a great comment: "Without SpaBoom, we would have been understaffed and overwhelmed for Valentine's Day."

Valentine's Day is crucial crunch time for your gift certificate sales, along with Mother's Day and the Holidays. Those three occasions can easily account for over half of your gift certificate sales for the year. Performing well during these times is crucial to serving your clients and the profitability of your spa.

It's also very challenging. The front desk at a spa during crunch time — clients checking in, checking out, buying gift certificates, setting appointments, the phone ringing — can sometimes seem more like a feeding frenzy than the tranquil, relaxing experience that we really want.

The lifesaver for Betty's is Instant Gift Certificates on their website. Betty's tells everyone how easy it is to buy a gift certificate on-line. When someone calls to purchase a gift certificate over the phone, the front desk checks to see if they'd like to go to the website and instantly print or e-mail it themselves. On-line sales make up 30% of Betty's total gift certificate sales; during crunch time for Valentine's Day, it was almost 40%. Clients get instant gratification, and the front desk doesn't have to do all of that last-minute fulfillment. The time savings is significant, and it goes right back into the customer experience.

Posted in Spa Business Management, Spa Gift Certificates • Comment »

What is your outstanding balance of unredeemed gift certificates and gift cards? In my unofficial, completely anecdotal personal poll, the top ways of tracking a spa's unredeemed balance:

1. A manual ledger of sales which you flip through to find the gift certificate from nine months ago to mark it as redeemed
2. Excel spreadsheet — just like the manual ledger, but it is on a computer
3. The really scary one: none

If your current method isn't working as well as you'd like, there is a better way — in addition to tracking your online sales, you can also track your retail gift certificate and gift card sales in SpaBoom. You'll get a complete history of all your GCs with easy reporting to balance your books and you'll always know where you stand.

Bonus: By tracking your retail GC sales in SpaBoom, you'll also be building your client database. Make it a habit to ask for your clients' email addresses, and start putting them in SpaBoom.

Posted in Spa Business Management, Spa Gift Certificates • Comment »

Recently, I was talking to a very successful Spa/Salon owner, who was disappointed in her online sales activity for this last holiday season. She had devised an arbitrary revenue target for her online sales, which seemed reasonable given her retail sales volume. Unfortunately, she didn’t come close to meeting her online sales goals.

It was all the more disappointing for this individual, when I showed her that on average, her peers were actually close to her online sales target (and therefore, well surpassing her in online sales).

The big question on her mind was: Why the difference?

What makes one organization more successful than another, when selling online? Does it always follow that a larger organization (in the retail context) will sell more online, than the smaller organization?

Treat Your Website Like a Retail Location

I think this individual’s fatal flaw is, she doesn’t think about her website like she thinks about her retail location. At retail, she has a store manager. She keeps track of all sorts of statistics. She hangs banners on the outside of her store, announcing new specials and events. She keeps an eye on traffic patterns into and within her store. She modifies her displays, her services and her people to maximize sales. She pays for billboards that have her company name on them (but not her web address).
In short, she's very engaged and simply amazing at the retail level. For the website, it’s hardly an afterthought. Of course, she wants sales and referrals from the web. She would like to see a decent percentage of her sales occurring from the website.

However, she rarely does those things on her website, that make her retail outfit such a success.

It seems so obvious from our standpoint, doesn’t it?

The same general principles that make a retail location successful work just as well on websites. Marketing your store helps drive traffic. So does marketing your website. Keeping your content fresh and current on your website helps drive traffic, just as it does when you keep your store clean and relevant to your customers' needs.

It's not rocket science. Devoting more time to your website, like you do your store, will yield positive benefits. And, those positive benefits will have great returns for you. Your website is an extension of your business … into the living rooms and offices of each of your customers. How many of your customers think of your business at any given time during the day? Now, how many of those customers pursue that thought, to the point of actually picking up the phone to place an order, make an appointment, or drive to your location? I would be willing to make a bet that the difference between the number of customers thinking versus acting is huge. And, with today's busy lifestyles, more and more people think about making an appointment for a treatment, or think about purchasing a gift certificate for their friend; but fewer and fewer people act.

Because your website is an extension of your business, it gives your customer an fast and easy mechanism to do business with you. Educate your current customers about your website, and what they can do on your website. In short, if you had a new retail location, you need to tell your customers about it. The same is true for your website.

Tell your customers about your website and how easy it is to do business with you. Walk around your store. Are there at least seven spots announcing your website, and what you can do on your website? Do you have at least one location announcing your website outside? Seriously. Give your customers at least eight impressions of your website in your store. Tell them your website address, and key features of your website (i.e. "Instant Gift Certificates Available Online", "Request an Appointment on the Internet", etc). How?

• Put your web address and key website features on your store receipts.
• Consider inserting a bookmark into every bag that leaves your store, announcing your website and upcoming specials or events (do your bags have your logo, phone number and web address?)
• Have a decal on your door for people to read coming in, and leaving, the store.
• Place posters in strategic locations throughout your store.
• Train your receptionists, therapists and cashiers to mention your website to your customers.
• Make sure your web address is on every piece of advertising, sales collateral, business cards and other sales and marketing material you generate.
• If you advertise, make sure your web address is present and prominent.
• Put your web address on your outside sign(s).
• Reference your website when handling inbound calls (many people would rather read-up and reference your services at their convenience).

Impressing the message "Instant Gift Certificates Now Available on the Internet: www.yourorg.com" to your customers will go a long way to increasing your sales.

In summary, the path to a more successful website is to treat your website like a retail location. Spend the time or find someone to help. And, the best first step in improving online sales is to reach out to those who already know you're great: Your existing customers. Make sure they know about your website. Do this, and not only will your online sales increase, but your overall sales will increase because you've made it easier for your customers to act.

Posted in Spa Marketing, Spa Business Management • 2 Comments »

Complaints make the world go round. Why? Because complaints are opportunites in disguise.

Where would we be without a little complaining? Complaints can be annoying and we sometimes take them too personally, but they really can help us in developing our businesses. Would FedEx or UPS be around if people didn’t complain their packages took too long to deliver through the USPO? Would we have diet soda if people didn’t complain about losing their teeth and adding inches to their waistlines?

How does a complaint help? How is it an opportunity to you? Because a complaint will always tell you of a client’s need. People complain because they need something… sure, sometimes these complaints can be ridiculous and absurd – people can be over demanding, grumpy and single-minded. But most of the time, complaints are telling us something. They are telling us when we need to improve our services or our business in some way; we can always learn for that and make our business better for everyone. Happy clients = word of mouth = success & more happy clients.

How did SpaBoom start? Well, interestingly enough, it was from a complaint from our founder, Bill Bice. Bill wanted to buy a gift certificate from a spa many states away; he wanted to buy it the moment he thought about getting this gift and that was at one in the morning. He couldn’t call the spa; it was too late at night. What’s more, he wanted that GC delivered to his loved one that morning… he knew that couldn’t be accomplished by mail, so he moved on to the next faraway spa on the list and found the same problem. This problem of not being able to get instant satisfaction from a spa Bill sparked the idea for SpaBoom. Bill, being a tremendous problem-solver, came up with our Instant Gift Certificate solution…. Print or e-mail your GC from your desk.

In a way, you could argue complaints are the mother of invention and innovation; because without others expressing a need to find a better way to sell Gift Certificates online, we wouldn’t be in business.

People’s problems should inspire us to always strive to make things better. Look at a problem or complaint and work backwards from it. How did this complaint come around? What could we have done to avoid the complaint in the first place – what does hindsight teach us? Are they mad about a service? Do they wish there was another service that would be more to their liking or expectation? Problems are opportunities for finding ways to improve your business and yourself. Without the feedback and sometimes complaints from our customers we identify the broader needs of our customer base and attack it.

A few choice words from Janelle Barlow and Claus Moller's excellent book, A Complaint Is A Gift:

• "No-one likes to receive complaints. Yet this is the method by which customers tell us how to run our businesses and our organizations."
• "In a major study of 700 service incidents from the airline, hotel, and restaurant industries, researchers found that of all positive memories customers have of good service, fully 25 per cent started out as some kind of failure in service delivery. The lesson to management is critical. Businesses do not need to run away from service breakdowns. Each provider has a chance to turn a negative situation into a positive experience for the customer."

So, the next time you get a complaint consider if there is an opportunity behind it…

Posted in Spa Marketing, Spa Business Management • Comment »

Spa Finder has a habit of putting out what they see as the upcoming trends for the year. SpaTrade has done a nice article and webinar with their spin on it, particularly as it applies to day spas. They make a couple of great points about your online presence, to which I'll add my own spin:

• "Make sure the look of your website reflects your spa’s brand"  — Your website should be an extension of the experience at your spa. When someone goes to your spa after seeing your website, they should immediately sense they are at the right place. It's amazing how many spa websites I've seen with a logo that doesn't match the signage at the spa.
• "Update transaction functionality of your website" — In other words, your clients and prospective clients need to be able to actually do something at your website, say buy gift certificates or schedule appointments.
• "Link to as many aggregators as possible (SpaTrade, SpaWish, SpaFinder, Spa Addicts, etc.)" — Always good advice; this will bring traffic to your website and increase it's ranking in search results.
• "Spend your marketing dollars online" — We're working to quantify this more, but the feedback from our clients says that an increasing portion of your advertising budget should go online, particularly if you've done the second point above and are selling online.

Posted in Spa Business Management, General, Spa Website Design • Comment »

Last week was the first ever Day Spa Expo, and our first trade show, too. It's good to actually get out in the world so we can meet in person occasionally. Well, ok, not actually me — Matt and Steph went to the show, and you can see their picture in DiscoverSpa's excellent review of the show. Julie gives us the Cliff Notes version of five of the presentations from the expo — there's some great stuff in there.

Posted in Spa Business Management • Comment »

Time is money. We’ve been told this from our earliest days in business. Availing ourselves of tools that simplify the spa management process by reducing time spent on certain activities is one way we can use that precious time commodity more effectively.

Instant Gift Certificates allow your front desk people to focus on answering the phone, greeting your clients, selling retail product and scheduling services. We’ve found that a significant amount of our spas spend far more time and energy on the traditional gift certificate fulfillment process than they’d like.

When clients can print (about 75% do this) or email (the remaining 25% choose this method) gift certificates at all hours of the day and night, 24/7, your front desk is relieved of that responsibility, freeing staff time up to develop stronger relations with each client (encouraging scheduling their next appointment before they leave your spa this time, for example.)

Time is money, literally, and the more you can manage to save and use in profitable ways, the better your spa’s bottom line will fare.

Posted in Spa Business Management • Comment »