“Search” and “Review” got married a couple of years ago, and “Searchiew” (Gesundheit!) is the new normal. Consumers don’t have to look for reviews any more–they’re everywhere. And the more reviews there are, the better it is for everyone–because accuracy increases when the sample is larger. It’s true that only a handful of customers have ever written a review, and only a fingerful write regular reviewers (like “elite” level Yelpers, who are chosen not just for frequent reviews but for being “tastemakers” and participating actively in the Yelp “community”.)
Review fatigue is a problem however; reviews are everywhere and so are solicitations to provide feedback. This has probably had a dampening effect on those of us who write reviews for the stuff we feel passionate about, but aren’t inclined to write about the local carwash, like those elite Yelpers–who seem to have an awful lot of time on their hands.
Despite our review-centric society, many spa operators have not figured out how to harness the power of sites like Yelp, TripAdvisor and Google+. They’re still burying their heads in the sand, pretending that every bad review is fake, or arguing with customers online.
Here are the key points to remember:
1. Yes, some reviews are fake, or unreasonable. Get over it. Most consumers have read enough reviews to spot (and disregard) the haters.
2. An unhappy client who writes a review is no different than an unhappy client standing at your front desk complaining. Respond with compassion, respect and gratitude (yes, gratitude: only one out of ten people who has the same negative experience will ever tell you about it. They are the canaries in your coal mine.)
3. Don’t just respond to negative reviews online, respond to positive ones, too. (“I’m so glad you enjoyed your facial with Tiffany! We think she’s pretty special too, and it’s inspiring to receive such kind words.”) This shows that you’re engaging with your community rather than just performing damage control.
4. Print, post and share your positive reviews with your team. We put them in the staff break area in a fun, themed display that changes every month or so. This keeps reviews top of mind for your team, too. Sometimes they forget that their actions can have a very public reaction.
5. When someone has a poor service experience at your spa, the number one priority: Bring ‘em back! Get them in for the same service (if they’re willing; maybe you’ll never get to touch their brows again for botching their waxing, but they might be willing to have a pedicure.) Don’t ever suggest, ask, or demand that someone revise a review as a consequence of a do-over. Yelp is filled with outraged comments by reviewers who felt they were being “bribed” or even pressured to update or remove negative reviews. Remember, just like a complaining guest at the front desk! You wouldn’t demand that they return home to tell their family, friends and neighbors that you’re actually awesome, after all. Do the right thing, and generally they will, too.
6. Don’t waste money on cheesy “reputation management” companies that create reputation-spam, the Cheez-Whiz of the online review world, which any consumer can spot in about two seconds. Some of these companies rely on cheese-bots to generate (sometimes barely intelligible) copious positive reviews, which dilute and push down the baddies. Don’t embarrass yourself. Generally speaking, “reputation management” companies don’t have good reputations and can be very expensive to boot.
7. Inviting customers to write reviews is crucial to understanding just how well you’re doing. However, it’s important that you ask the right people to do this. Inviting non-reviewers to post on Yelp has, as most of us know, very limited impact. If they are not already a Yelper, that new account and single review is the algorithmic kiss of death; their warm words will disappear into the abyss in 90 days or less. DemandForce generates “certified” user reviews following appointments that unfortunately largely go unseen and unfelt by non-customers. However, as a tool for managing customer relationships it’s still valuable and its suite of services includes much more than the review site. Customers are given a chance to provide private and public feedback. For example, on DemandForce Preston Wynne Spa has a 95.5% average approval rating, compared to 80% (four out of five stars) on Yelp, with close to ten times the number of reviews. At the time we signed up, Google was aggregating reviews. They have now plunged into the review market with Google+, and unfortunately this has made Google a less-useful reviewing tool for the time being. However, it is growing. Trackback, Inc., is a monthly subscription service that helps you you generate feedback from legitimate customers (using a contest as an incentive) and then distributes it in the form of new reviews to influential sites like Yelp and TripAdvisor. They have a clever way of inviting the Yelpers in your clientele to share their thoughts, making it oh-so-easy by providing a clever cut-and-paste interface. Love that.
8. Review sites provide rich and nutritious search engine food. They increase your website’s rankings. They drive people to your website for more information.
9. Searchiew drives customers into your business. Mobile apps like Yelp’s can deliver last minute business to spas thirsty for it. If you spend a lot of time worrying about yield management, spend some of that precious time brainstorming some smart Yelp “check in” goodies.
It’s time we all grew up and accepted that review sites do far more good than harm for a quality spa that is well managed!
Last month I had the pleasure of participating in “Creating Raves,” a three day customer service intensive put on by Hospitality Quotient, the consulting and training arm of Union Square Hospitality Group. I’ve been an admirer of the company and founder Danny Meyer since the publication of his book, “Setting the Table,” which I think is the best book on customer service ever written. Creating Raves was customer service fantasy camp–three great days that were spent both in the classroom and in USHG’s restaurants, observing the company’s culture up close. It was exciting to see the core principles from the book in action, to learn from some of the company’s general managers, and from the Man himself!
One of my favorite concepts from the book and the workshop is that of “being on the guest’s side,” acting as their “agent” rather than a “gatekeeper.” This is one of the distinctions that Meyer makes so brilliantly, making his philosophy actionable–and teachable.
Even when a customer service professional is well-trained, the “gatekeeper” role may still be played–just more politely. It’s so easy to slip into, even–and it might be argued, especially–for employees who are highly competent. Just keeping the “on their side” mantra in mind shifts your sensibility in a subtle but powerful way. For example, when a guest calls for a massage and can’t get in, a spa reservationist will offer that guest the opportunity to be on the waiting list, and also express their hope that they can get in, after all. It’s just a matter of anticipating how that person is going to feel, and coming from a place of empathy.
Instead, many requests that can’t be fulfilled will conclude with a dead end. “My apologies,” the scrupulously polite gatekeeper says. “We are fully committed that day.” End of story!
One of my best experiences with an “agent” on this trip to New York occurred in the Rose Bar of the Gramercy Park Hotel, one of Ian Schrager’s famously sultry rooms into which a non-Beautiful Person wanders at their peril. I was tired but not quite ready for bed, and craving…chamomile tea. An exquisite cocktail waitress–a tall blonde sylph in a crimson jersey dress–approached me.
“Do you have chamomile tea?” I asked, noting that the tie-loosened Suits playing pool near me were quaffing martinis. I was ready for aloof scorn or even consternation (“Um, I guess I could get that from the restaurant.”)
No, she was an agent.
“Sure!” she gushed enthusiastically, as if she was thoroughly delighted that someone was not ordering a cocktail, for a change. When she returned with my tea, she brought me an enormous thermal carafe of hot water, and two tea bags, which saved both her and I the trouble of refills, and I sat on a velvet sofa like the grandma I am and contentedly listened to some fantastic live jazz. When it was time to leave, my server refused to charge me.
In a guest experience, each little “moment of truth” has the potential to become a disappointment…or a happy memory. I was expecting nothing more than tolerance, and I received enthusiasm instead. This friendly young woman did more than just fill an order (or, for that matter, comp a pot of tea). By letting me know that she was “on my side,” she made me feel welcome, and that I belonged. (And now I’m telling you about it!)
“How’s that tea treating you, dear?” called the band leader, between songs.
I gave him a big thumbs up, thanks to my “agent” in red. And two nights later, I was back, this time for Champagne.
As we put the recession in our rear view mirror, the spa operators we know have pruned all the dead wood they can from spa overhead. The few tweaks we made at our own Preston Wynne spa in 2013–getting rid of excessive back office space, flattening our organization some more–will certainly help us out in 2014.
But real progress has to come on the “middle line,” gross profit, where there is still leverage.
Here are three key moves to increase gross profit:
1. Increase prices
This doesn’t have to mean an across-the-board price increase, but it can mean adding more high-end services to your menu…especially if you’ve had to reduce prices through discounting for less differentiated, entry-level services. Now that discounting has become the expectation, you may have to set your “rack rates” higher, just as hotels do, to enable you to provide a range of price points that fluctuate with demand.
Do clients push back at your prices? If you rarely get push back, it’s likely your prices aren’t high enough. And just because someone asks about a discount, it doesn’t mean your prices are too high. That is the new “consumer entitlement” that’s been created by companies like Groupon. Listening to your customers is important. Hopefully you closely monitor reviews (and actively solicit them). This is the most likely venue for commentary on your pricing. As well, searching social media for mentions of your company may turn up themes, like “expensive, but worth it.”
There has to be a “quid pro quo” for reduced prices, and that’s loyalty. (Sorry, Groupon! You’ve created a monster: the itinerant, discount-blood-sucking consumer who wears their utter lack of loyalty like a badge of honor.) Membership programs can actually help you improve gross profit dollars by stabilizing demand.
2. Sell more profitable retail products
Many vendors cut customer service during the recession, forcing spas to become more self-sufficient as retailers. That makes private label value proposition more appealing. Spas already know how to “go it alone.” I’m fascinated by the industry convention of setting wholesale prices and MSRP in such a way that spas only receive a 50% gross profit. No other industry with this type of gross margin also has a punishing 10% sales commission as a “tradition,” too!
The gross margin on the typical branded product in a typical spa is 40%. I don’t know any spas whose overhead is 40% of revenues these days.
After years of being forced by the marketplace to discount their services, a lot more spas are grumbling about this somehow sacrosanct industry “tradition.” Private branding is the answer to “how can I realize a better profit on my retail sales?”
3. Revisit your incentive programs
Many spas are still paying commissions that are simply not sustainable. It’s not easy to re-tool a commission or incentive plan, but it may be unavoidable.
Kids, don’t try this at home! A comp conversion is fraught with emotion and the potential for staff loss is high. Engage a spa consultant who understands not just how to design a program but help you “sell” it to your staff. That individual can play “bad cop” to the spa owner’s “good cop,” as the new program is rolled out. We also recommend enlisting your team’s “thought leaders” in an informal task force to help you implement the program. Simply handing it down from on high probably won’t work.
Remember, as you consider the moves that will give you the best return, gross margin is something you can control more readily than overhead. You can make a decision to change vendors or prices and implement it quickly. Fixing a dysfunctional compensation plan is a bold move that can revive a struggling business.
Keep your neatly-pruned overhead in check and resist the temptation to “relax” as revenue improves. Don’t take off your “financial Spanx.” If you stay strong, those additional points of gross profit will create dramatically better financial outcomes for your spa in the New Year.
As spa consultants, we spend a lot of time talking to clients about their dreams and vision for new spas. Not surprisingly, a lot of people who love spa-going believe that becoming a spa owner is their destiny.
We meet many impassioned would-be spa owners, but not all of them have the skills, knowledge and emotional intelligence to be successful spa entrepreneurs. Even businesspeople who’ve been successful in other industries frequently have a hard time making their skillsets “translate” to the spa world.
Most of us are familiar with the story of the talented home chef who believes that opening a restaurant is the logical evolution of their gift. But turning your passion into a business isn’t always a recipe for success. This great article from the Wall Street Journal explains why something that seems “meant to be,” is often better left as an avocation.
In our Spa Director’s course, in the financial management module, we tell our students that the phrase, “Do what you love and the money comes…” should continue, “…keep doing it and the money goes.” Love is not enough to create a sound business. Even robust sales are no guarantee of profitability, especially for stand-alone spas.
Creating a good business is lot like creating a good marriage. Passion may be an essential ingredient, but a relationship that is mostly about passion rarely lasts. This fascinating short video about the Sara Blakely, founder of Spanx and the world’s youngest female billionare, demonstrates that passion is sometimes where you find it. Blakely set out to become an attorney, but failed. Her company was Plan B.
Falling in love with a great idea, as Blakely has demonstrated, can be a more successful path than building a business around your love.
Wynne Businesss spa management education returns to South Africa this summer. Wynne Business’ Lisa Starr, Les Nouvelles Esthetiques, and TUV Rheinland are teaming up to present this information-packed, advanced spa management training course, presented in Johannesburg after the Spa Conference 2013. A one-day, abridged course is being offered in Capetown, an ideal program for supervisors you’d like to train, too.
South Africa’s rapidly growing spa industry requires attention to detail in every aspect. Our training programs will give you the tools you need to improve your spa’s performance and profitability. They also provide a valuable networking opportunity.
Topics covered in both sessions will include:
* Advanced Financial & Operations Management
* Spa Marketing Concepts and Tactics
* Quality Management Best Practices
* Optimized Retailing
* Human Resource Strategies to Retain Top Talent
* Developing your Leadership Vision & Strategies
New this year:
Catch the abridged course on July 25th, 9a-5p, in Capetown!
R 3600.00 SA Spa Association Members
R 4200.00 Non-members
R 2400.00 SA Spa Association Members
R 3000.00 Non-members
Admission includes lunch and tea breaks as well as your course text, a valuable reference tool you’ll use repeatedly. Attendees will also receive a certificate of completion.
Les Nouvelles Esthetiques Conference Room, Craighall Park, Johannesburg
TUV Rheinland Corporate Offices, Century City, Capetown (Abridged Course)
To REGISTER, or for more information on the “High Performance Spa Workshop,” contact Les Nouvelles Esthetiques on 011 447 9959 or e-mail:
Following is a blog I wrote for our Preston Wynne Spa website. I was a little hesitant to do this, given the popularity of discounting, but I also wanted to make sure that we explained why “deals” are not the way we market our business. Consumers don’t understand the destructive effect of unwise discounting. This won’t change a lot of minds, but I thought it was important for our guests, and potential guests, to understand where we’re coming from and why it’s better to do business with a spa that does business well.
Quality time, Part One: how discounters do spa-goers a disservice
I’m constantly being stalked by representatives of Groupon, formerly the world’s fastest-growing company (and more recently, one of the fastest-shrinking.)
We all love a bargain, me included. It’s pretty tempting to buy a spa Groupon when they show up in your in-box. Hey! It’s cheap! Why not? Let’s give it a whirl!
Here’s the rub.
Groupon and its copycats require spas to discount their services dramatically, usually by 50% or more. Then they give the business 50% of the sales, in lump sums, up front. That means the business is receiving only 25% of its normal revenue for the service. According to one Slate magazine article from last summer, Groupon functions like a loan-sharking operation for small business.
Why does this matter to you, the spa guest?
It’s very, very expensive for a spa to run a “social discount” promotion that offers a discount of 50% or more. That’s because spas have a high variable cost; most of us compensate by employees for the services they perform. (A whale watching boat, by contrast, has the same basic cost whether 3 people or 30 show up.)
So spas that run Groupons generally reduce their employee’s compensation in order to offer them. And Groupons often sell in very large quantities. Which means employees may be providing a lot of facials or massages at a fraction of their normal pay. Groupon users frequently don’t leave gratuities. You can imagine the effect on employee morale! Discounting is not a strategy for retaining great talent.
At Preston Wynne, cultivating a team of wonderful spa therapists is our #1 priority. Our clients deserve the best, and we work hard to find special people who share our philosophy. Talent and knowledge are key, and so is hospitality and plain good judgement. (The latter quality is rarer than hen’s teeth!)
We go through an average of 20 potential employees before we find one that meets our hiring standards. They even interview with their potential teammates, who have veto power over our finalists. Our goal is to have a harmonious and talented staff–the key to a relaxing spa experience.
Veteran therapists like to work at Preston Wynne Spa. It’s professionally operated. There is a well-trained, positive support team. There are standards and protocols and a passionate commitment to customer service and to the therapeutic work that we do. We use extremely high-quality products in our services. We provide a beautiful, and safe, working environment. We follow sanitation practices that exceed the standards of the Board of Consumer Affairs. We offer medical benefits for employees who work 20 or more hours a week, something that is still a rarity in the spa and salon industry.
Meanwhile, scratch the surface of many a discount-fueled or bargain spa and you’ll find dodgy practices like pretending that staff members are “independent contractors,” or not employees at all. Schemes can be as elaborate as setting up “schools” to bring non-US workers in on student visas to practice in the “clinic,” which is the spa operation.
Why is that a problem? If a spa pretends that a therapist is really an independent contractor, they deny spa therapists worker’s compensation insurance if they are injured on the job, and unemployment insurance if they lose their job. They’re not paying employment taxes. They’re saddling legitimate employers with a bigger burden. They’re competing unfairly and illegally. And the practice is epidemic.
If a spa is willing to flout employment laws, do they bother to obey other laws? Laws about professional licensing, or laws governing sanitation? It’s worth asking.
We’re delighted to have our massage therapy department voted Best in Silicon Valley last month by readers of the Metro. There’s a reason our team earned those accolades. They hold themselves to the highest standards. They love their work. They exemplify professionalism. And they’re really, really nice people.
There are really two “purchases” happening when you visit a spa. First, you’re investing money. You’re also investing something just as valuable: your time. You deserve a great return-on-time-spent.
Bargain-hunting can be fun, but when it comes to your health, appearance and well-being, finding a great value is much more important.
Comments? Questions? E mail Spa Owner/blogger Peggy Wynne Borgman at firstname.lastname@example.org
Lisa Starr’s latest Global Spa Trends presentation from her recent appearance at the SpaTec conference is available as a pdf on the Wynne Business website. Browse the zillions of images she’s included and you might just get your next big idea!
Last week, I went to an hour-long Hospitality Fantasy Camp (well, that’s what it was for me!) I attended a cooking demonstration and “conversation” with Danny Meyer and Carmen Quagliata of the Union Square Cafe in New York, at the Pebble Beach Food and Wine Festival.
Meyer is the author of the best book on hospitality ever written, Setting The Table, The Transforming Power of Hospitality in Business. It’s on the syllabus for our three day management seminar, The Spa Director’s Management Intensive. It shares a straightforward and easy-to-apply philosophy that is every bit as relevant to the spa world as the restaurant world. In fact, it’s relevant for any business with employees and customers.
I’m pretty sure I was the only person in that audience that morning at the Spanish Bay Resort who was there to pick up management tips, not pasta-cooking tips. (I got those, too–I’ve been over-stirring my pasta and using over-salted water!) At ten o’clock in the morning, the ladies sitting next to me were already happily quaffing glasses of chilled Chardonnay handed out by event staff.
The new cookbook they’ve collaborated on is called Family Table. It’s based on the type of recipes served for a restaurant’s “family meal,” the meal that a restaurant staff eats before service. Family Meal is a humble, hearty affair which utilizes ingredients that are still good but not ready for prime time in the dining room. Meyer believes that when his employees are nourished with a good meal (not fancy, but prepared with love and gratitude) they can, in turn, give good service to customers. Meyer’s Union Square Hospitality Group, which operates more than a dozen restaurants in New York, practices a form of hospitality management which puts employees first.
The concept of the Family Meal really struck me as I was listening to the affable give-and-take between Meyer and Quagliata during the cooking demo. There was something almost spiritual in the way they described this time-honored ritual of sharing food before work.
I wondered, what is the spa industry’s version of the Family Meal?
What do we do on a daily basis, prior to sending our team into the spa to help our guests feel great?
In our spa, we have a pre-shift “huddle.” It focuses on sharing information about the day’s schedule, including anomalies, updates. It’s operational. In fact, it’s transactional. Huddle is when we distribute the cash tips collected by our front desk team. A lot of restaurants do a huddle too: it’s called the “lineup.” (Kind of scary-sounding, isn’t it?)
Inspired by this session, I’m brainstorming ways to upgrade our huddles:
Ideas I’m considering:
- Family Snack: something healthy, changing daily, at the break table.
- Mini chair massage before shift. 3-5 minutes per person.
- An employee-led routine of stretching, warmups and grounding
Studies tell us that guests are not loyal until they’ve been “emotionally satisfied” by their experience with your business. Emotional satisfaction is much easier to create when you’re experiencing it yourself.
Let’s say you’re a massage therapist at a spa. You drive (or bike, or walk) to work, probably not thinking about what you’re about to do, but about all the other things you have to do, and can’t. You come into the spa, most likely through an entrance not used by guests, and prepare for your shift: gather linens, restock supplies, set up your table. You’re probably hustling to get it done in time to greet your first guest.
When do you get into the spa mindset? Probably about the time your hands first touch your client.
If the “family meal” is about nourishing a restaurant staff, the equivalent would be “practicing what we preach” with our team. How better to get our staff members into the spa mindset than by sharing a little bit of it with them?
Demonstrating and sharing self-care just may be the “family meal” of the spa industry.
In her latest blog for Booker.com, Wynne Business spa consultant Lisa Starr prowls the New York Gift Show for goodies to goose your retail sales this spring and summer.
by Lisa Starr
Ever since WWII, Americans have been in love with the idea of discounts. For many people the thrill of getting something for less than the advertised price overshadows the actual acquisition (or at least for people who are focused on price, rather than quality). Our recent economic situation created a new iteration of discount strategy: the membership program. No finer example of this exists in the spa industry than Massage Envy, and with over 700 locations, each reputedly grossing over a million dollars a year, it’s still growing. Volume like that inspires a lot of wannabe businesses hoping to cash in on this concept, but I think the Massage Envy ship has already sailed. Not that you can’t have a discount membership program at your spa, but building an entire business around this concept has already been done, and done well.
Peggy Wynne comments: The other major consideration about establishing a membership model: if it doesn’t work well for you, “stopping” it is next to impossible without angering a lot of customers. Think about it carefully and look at a variety of models.
One of the simplest we’ve seen was a membership whose sole perk was a discount. The spa sold a 20% discount privilege on services for $20 per month. While on the face of it that seems much too generous, how many of your guests diligently come once a month and spend an average of $100? That’s the minimum spend if a client is going to break even on their membership. Depending on your price point, that might not be a workable model, but when you look at average monthly spending, you may be surprised at how much this has slipped in the last ten years. Your membership might need to be $30 a month, which still sounds like a deal to a power user. And yes, some clients will overuse it. That’s the whole idea…the health club model. A handful overuse it, but most people underutilize it.
Certain industries have ingrained the discount message into consumers; just look at what is happening at department store JCPenney. JCPenney hired the innovative executive Ron Johnson, the former Sr. V.P. of Retailing for Apple, to be the CEO last fall. Johnson created one of the highest sales-per-square-foot environments in the retail world at Apple, and JCPenney felt like it needed some innovation. Johnson’s plan for JCPenney upended its standard discount and coupon-driven mantle, and focuses on providing everyday low prices and value, and staying away from the “sale” word. Turns out, folks that shop at JCPenney like prowling the aisles for deals, and they’ve been staying away from the store in droves. Whether this experiment to transform the company and its reputation will be successful or not is yet to be determined, but I give Johnson credit for bravery. I’m guessing it’s going to take more than just a few months to retrain the consumer on JCPenney’s new value proposition. Why? Humans are creatures of habit.
So what does this mean for spas? It means we need to be very careful about the message and image we convey to our target audience. If we start training guests that our prices are as malleable as they are at department stores, we risk beginning a dangerous downward spiral. Consider this interesting article, “Customers Will Pay More For Less,” by Alexander Chernev, in Harvard Business Review, in which two researchers discovered that consumers were willing to pay more for two separate items than they were willing to pay when the items were bundled together. For instance, people were willing to spend $225 and $54, respectively, on two pieces of luggage when purchased separately, but when they were bundled together, consumers were only willing to pay $165! The reason is attributed to a thought process called categorical reasoning, and can be seen particularly when an expensive item is bundled with a less-expensive one. If you create special offers that pair higher-priced spa services with less expensive ones, you may be devaluing both of them in the eyes of the consumer. Be strategic and consistent with your pricing, and you won’t run the risk of thoroughly confusing the consumer about your true value proposition.