Wynne Business

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!

Lessons in Hospitality

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.

New York Gift Show Wrap-up from Lisa Starr

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.

Self-inflicted wounds: More dangers in “conventional wisdom” on discounting

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.

Who’s educating our spa directors?

The spa industry has grown up in the past decade, but spa management education has not kept pace. The Global Spa and Wellness Summit this year even commissioned on a study on the problem with the Stanford Research Institute, to which we contributed our thoughts and observations during an in-depth interview. This excellent report is available as a download on the GSWS website.

Few spa directors have any formal training in spa management. Most have attended the school of “learning by doing,” and even the SRI study underscores the fact that on-the-job experience tends to be valued over formal management degrees, which can be perceived as “disconnected” from the reality of spa operations. It also notes that “hard” and “soft” skills are required to effectively manage spas. We couldn’t agree more. We specialize in teaching the “hard” skills in a way that spa professionals can relate to, and helping those from outside the industry, with more “hard” skills, to learn how to temper their leadership style and communication to make it work for their spa teams.

The study points out, “there are only around 4,000 students worldwide currently enrolled in spa management-related degree programs, but there are an estimated 130,000- 180,000 spa managers/directors currently working in spa businesses globally.”

The gap has always been visible to us. It’s what led us to create the Spa Director’s Management Intensive, which we’ve been presenting for over 15 years as a live spa management seminar, in the San Francisco Bay Area as well as Philadelphia. While it is a short, intensive program, our graduates–even years later–cite learnings that changed the direction of their businesses and careers. That’s because we focus on the highest-return concepts, the unassailable “laws of gravity” for operating spas. The SRI study confirms that most spa management “laws” apply internationally, too.

That’s what led us to produce programs like our September Path to Profitability in China, taught by Lisa Starr. But there’s still only so many spa professionals that can be reached through live seminars.

So we recently launched the Spa Director’s Management Intensive Online, a self-paced program that includes all the content from our live seminar, and then some. SDMI online enables students to learn on their own time. It’s ideal for helping busy spa professionals hone their management skills and knowledge. It’s also excellent for those just entering the industry, who need to quickly get up to speed for a spa startup project, or a spa acquisition.

As we do in our live California seminar, Lisa and I teach SDMI online together. We both deliver Powerpoint lectures for each of the twelve learning modules. As we constantly do, we update our spa management text to reflect the reality of operating a spa in a recession-without-end.

Our online students do have access to us, as well, via e mail and also during a private one-hour spa management coaching session by phone that’s included with each registration.

The course is appropriate for day spa operators as well as “stay” spa professionals. One of the unusual things about Wynne Business is that we own a spa in the San Francisco Bay Area, award-winning Preston Wynne. We offer abundant content for day spa and medical spa professionals, but our graduates include managers and directors from some of the most renowned international hotel brands, including Four Seasons, Ritz Carlton, Shangri-La, Peninsula and others.

Spa management education is becoming more accessible, and we’re excited to be leading the charge.

Selling through Service

Most spa folk believe that “customer service” and “sales” are two distinctly different practices, and that never the twain shall meet. We beg to differ.

Great salespeople usually deliver superior customer service, and customer service geniuses make guests want to throw money at them. But many people think that “selling” is an unpleasant experience wherein someone pressures someone else into making a purchase they don’t really want to make.

It’s like makeup. Over the years, clients would tell me that they hated the way foundation makeup looks on the skin, and didn’t want to wear it. It looked artificial and the color was unnatural.

They didn’t realize that they’d been admiring beautiful foundation for years, on people that they assumed were not wearing any at all. That’s because, when it’s done right, great makeup looks and feels great, too. Just like great sales skills. When you’re aware of “selling” it’s because something isn’t being done right.

Why does a “pushy” salesperson feel pushy? 9 times out of 10, it’s because they haven’t listened to you. They’re promoting their own agenda. When someone really listens to you, what they then offer you is an extension of your own needs and desires. No push required. You feel like you’ve had your mind read, your needs met, and you’re delighted.

A “deep listening experience” occurs when someone is giving you excellent customer service. But it’s also essential to sales. So, what is that–selling or service? It’s both. It’s Selvice.

We identified seven key practices that make up Selvice. Used together, these practices guarantee a lifetime of success in the spa business. By breaking up what may look like a mysterious “talent” into simple, bite-sized behaviors, we demystify the process. Most of your employees are already adept at over half these practices, skills that include creating rapport, expressing expertise and individualizing the guest experience. But seeing how they build upon one another to create a gratifying experiential “flow” for the guest is the real eye-opener.

This free 45 minute webinar is designed to introduce the concepts of Selvice to spa employees. Together with our Selvice e book training manual, it’s a terrific first step toward abundant sales and stellar customer service. For further study, our 80 minute Selvice DVD training program provides role-play vignettes (starring real spa employees and typical situations) with commentary to vividly illustrate the concepts of “selling through service.”

View FREE Selvice webinar

Download FREE Selvice e book

Learn more about the Selvice Training on DVD

Yelpocrisy

Many spas have had the online equivalent of a flaming bag of dog poop left on their Yelp doorstep, and a couple of weeks ago, it was our turn. A nasty “one star” hatchet job appeared, courtesy of someone with the handle of “Oliver P.” Our lead massage therapist brought it to my attention, in an absolute fury.

“Oliver P” focused his slander on our massage therapists (he described a fictional “strike” by our “underpaid” employees), and the fact that the owner of the spa is a “woman who does facials,” and thus incapable of operating a good massage program. Cue ominous music.

Interestingly, the account had a different name on it when the review was first posted. A couple of days later, both the account user’s name and city had changed, and he/they had added a five star review of Remede Spa in San Francisco. Due to our distinct shortage of disgruntled ex-employees, I figured it was likely someone who had tried and failed to obtain a job at our spa, or a competitor. (Though honestly, I’ve never seen anyone quite this psychotic in the spa industry.)

The screed he posted on the Preston Wynne Yelp page was so poorly constructed (he forgot to actually review our spa, he was so busy defaming us) that I was pretty sure we’d be able to have it removed. After all, it didn’t meet Yelp standard (I hear you snickering.) I contacted Yelp and quite quickly, the post went away.

Not that long after that (surprise!) a new post appeared, one that met Yelp’s “standard.” Using the format of a review, “Oliver P” continued his barrage of insults and innuendo against us. Once again, I contacted Yelp.

No sale. “Oliver P”s new post, surprise, met Yelp’s standard! Even seeing that this individual’s original intention was to damage our reputation and our business, Yelp, following its policy of editorial purity, was unwilling to prevent him from striking again. Though I don’t advise doing this for anything less than sabotage, I posted a public comment, saying that Yelp had removed his previous post, and that as a Yelper, I was “saddened when someone uses the site for destructive purposes.”

“Oliver P” blasted back at my this public comment, claiming that I “harass” other reviewers who make negative comments and have “filled” his inbox with messages. He is clearly not done with his mischief.

Browsing some Yelp chat threads, I saw more than one business owner remarking at the appearance of nasty reviews and subsequent calls from businesses offering to sell them “reputation repair” services. A new cottage industry of pay-to-praise reviewers has sprung up, not surprisingly. These are the sort of unintended consequences that germinate in the messy ferment of social media.

What bothers me more is something far more insidious, Yelp’s “baked in” negativity. I’m not just Yelp-bashing, I have statistical data. Preston Wynne Spa is a customer of a company called DemandForce, whose product is a bolt-on for our Millenium spa management software. Among DF’s services is a native review site, with reviews solicited from certified customers (i.e. people that have actually had an appointment or made a purchase at our spa.) We’ve amassed hundreds of reviews now, and our average rating is currently 95%. Contrast that with our four stars on Yelp, which equates to an 80% average rating. That’s a 15 point negative bias.

When a one-off, positive review of your business is posted on Yelp, it disappears quickly–as soon as a couple of weeks, we’ve observed. In other words, if the only reason someone has signed up with Yelp is to say something nice about your spa, Yelp does not consider their remarks trustworthy. Yet a user who displayed clearly slanderous aims is protected. If Yelp really wants to be pure, they need to permit folks who aren’t hard-core Yelpers to share their opinions too. The “hidden reviews” section, where Yelp imprisons the wanton one-offs, was a sop to angry business owners, but no one looks there.

Fortunately, DemandForce is objective: you’ve been to the spa, you receive an invitation to review us, and you write one. What’s great about this system is that it stimulates a much broader cross section of your customers to write reviews, something that Yelp fails to do. What Yelp wants is “Yelpers,” self-styled reviewers that review everything and anything. Since the advent of DemandForce, we see fewer Yelp reviews. To date, we have about 700 certified reviews on DemandForce, which has been in place about two years, and just 100 on Yelp.

I’m probably on the low end of the Yelp activity scale, but I know what stimulates me to write Yelp reviews: really amazing experiences and egregiously bad experiences. But that’s not an accurate cross section of my interactions with businesses. The merely good ones just aren’t interesting enough to write about.

It’s a reflection of the old word-of-mouth statistic that a very happy customer tells 3 people about their experience, whereas an unhappy one tells 9. This is now amplified to bizarre extremes by Yelp, which give folks like the mysterious Mr. “P” a massive megaphone–while stuffing a sock in the mouth of legitimate customers who want to sing your praises.

A final footnote. We tried Yelp advertising again last year, and once again the results were utterly underwhelming. In fact, our page views for the month of May were higher this year, our first year-over-year comparison month (with no advertising.)

That’s what I call adding insult to injury.

Online gift shopping bigger than ever

When was the last time you polished up your online gift selling program? With Mother’s Day approaching, it might be a good time to take stock.

Spas selling gifts online (that is, all spas) need to make sure their marketing system is up to scratch. Everyone wants a piece of the gift market, and your big online competitors are better at optimizing search, (Google “spa gift certificate, Yourtown” and see where you stand.)

If you’re like most spas, you probably have the ability to sell instant gift certificates online. If you don’t, that’s your first step. Vendors like Spa Boom make it easy, though they take a goodly chunk of the transaction.

The next stop is your website. Do you make gift buying easy and obvious? Some tweaks may be necessary. There’s a picture of a gift card right on our Preston Wynne Spa home page (it’s a link, of course.)

Need more ideas? The always edifying luxury expert Pam Danziger shares some impressive intelligence about today’s gift shopper in this informative blog.

Loyalty lives.

To hear Groupon, Living Social and their imitators tell it, we’d all better get on board if we want to do business in the brave new world of 24/7 discounting. Discounts create feeding frenzies, but that excitement is short lived. The next discount that pops up carries the herd away to feast on a fresh new carcass. The theory is that discount users will be converted to a loyal full price customers. A few of them actually are. Meanwhile, you’ve trashed your brand and worn out your staff. The wear and tear of extreme discounting hammers morale.

Whatever happened to loyalty, you wonder?

Smart spas know that loyalty isn’t dead. They’re moving in the opposite direction. While their peers have been wantonly discounting, they’ve developed premium treatments and marketed them to clients who are searching for something special. Not gimmicky, overpriced stuff–like the silly-luxe services of the past that were the equivalent of a mobile phone encrusted with diamonds–gold leaf masks and such. No, these are serious treatments that offer a higher level of results and offer a platform for your top performers to shine (and earn.)

A terrific example is AvantGard spa in San Carlos, California. Blanca Caballero, entrepreneur extraordinaire, has never followed the herd. She’s a savvy yield manager, but she never let the recession drag her into the discount fray. Recently, she created the AvantGard Five Star Facial and Five Star Massage, and they’re one of her most successful new service launches ever, despite the $175 price tag.

Why are guests responding so well to expensive services during a down economy? One of the factors is the heightened awareness of celebrity beauty rituals. Videos such as this demonstration of the Tracy Martyn’s “Red Carpet” Facial–which includes advanced modalities of electro current, oxygen infusion and diamond tip microdermabrasion, to name a few–have whetted the appetites of Millenial and Boomer clients alike. Watching this video, shot in Martyn’s elegant Manhattan skin care studio, makes you crave, not just the treatment, but the experience of being special, a quasi-celebrity.

But skin care is not the only treatment that benefits from premium positioning. Massage therapy, which many mistakenly consider a commodity, is anything but to the educated consumer. Many affluent guests who travel the world and experience different bodywork modalities return to their hometown spa in search of something more sophisticated than a 50 minute Swedish session.

One of the greatest advantages of offering premium services is that they showcase the best that your team and your spa is capable of. When you constantly promote the “base model” service, which is harder to differentiate, you set yourself up for an “apples to apples” comparison to lesser competitors.

Instead, put your specialties, talents and capabilities in the spotlight. Bust out those triple axles. Give them an experience–and results–to remember. I know that if we send a client out to see a friend after a HydraFacial and Caviar Masque that friend, unprompted, is going to rave about how great their skin looks.

It’s time to put the magic back in your menu. As Apple has shown us, the reward for real creativity is real loyalty.

Absolute Power

If you need any proof that the world has changed, behold the empowered consumer.

The other day, one of our regular spa clients said to our spa director, “I received a gift certificate from (your competitor). I don’t really want to go there. Will you honor it?”

With super powers forged by the fires of recession, today’s SuperConsumers have thrown off the rusty old shackles of loyalty and fairness. Trailed by their golems, Groupon, Living Social and (really, Jeff?) AmazonLocal, they roam the land feasting on deals and discounts.

Today's SuperConsumer is happy to say "buh-bye" if you don't meet her demandsthe land feasting on deals and discounts.

In a country where half of the population is now considered low income or poor, a small, powerful percentage of the population is doing almost all of the discretionary consumer spending. This client’s request would have been outrageous ten years ago. But in a world where “free” has become an expectation, not a treat, it’s the cost of doing business. SuperConsumers know that they’re large and in charge. And I would be the first to declare that we are fortunate indeed to have this client.

What did we do? We honored that competitor’s gift certificate.  (It will be given to one of our team members as a perk; mystery-shopping other spas is terrific education, after all.) Effectively, our client’s gift certificate became my half-off coupon. One, of course, that I was not planning to buy.

In discussing the phenomenon of “gift leakage”, where clients are spirited away to competitors when they receive gift certificates, I used to say that I defined a loyal customer as someone who’d receive a gift certificate to another spa and simply re-gift it to someone else.

I guess I’d better update my definition. How does this sound? A loyal customer is someone who asks you what you’re willing to pay for their loyalty.

Here’s my fantasy of a perfect world: every consumer would be required to operate a small business for at least one year of their life. To function as a responsible member of a capitalist society, we all need a practical understanding of the “laws of  business gravity.” You know, stuff like “cost of goods sold” and “overhead expense.” (Try getting that onto the curriculum, folks!)

Eeeeeyeeew, that’s math.

Today’s SuperConsumer is proving to us that ignorance is bliss.