OPINION W
ahanda has the largest listing for health, beauty and spa compa-
LOPO CHAMPALIMAUD Co-founder, Wahanda
nies worldwide (230,000 businesses). As we’re verti- cally focused, our subscribers are exclusively interested in health and beauty and approximately 75 per cent are women. T ere’s a lot of talk about the repeat rate
of deal site customers, but this can be mis- leading. With most spas running with a utilisation rate of 50 per cent – and up to 75 per cent fi xed costs – the issue’s not just about loyal customers, but about getting more busi- ness in the fi rst place. So unless businesses take the hit on low utilisation, many need to look at discounting to fi ll quiet times – but there are smart ways of doing this. We off er three types of deals to support
businesses depending on the objective: Ever- green, which are long-duration off ers and which businesses control and upload them- selves; MobDeals™, our daily deals option that we launched in January 2010; and a
hotel platform, introduced nine months ago, for overnight and day spa breaks. We don’t prescribe one single solution,
instead we have 16 account managers who are experts in the fi eld, and work with busi- nesses to maximise their deals and off ers. MobDeals are useful for operators who
want to get a lot of customers through the door during particularly quiet periods. T ese short-duration deals are supported by placement on the homepage and in email. For businesses where a full price is crucial [for the rest of the year] we wouldn’t recom- mend doing more than two MobDeals a year. We’d look for a 50 per cent discount on the service and take a 30 per cent cut. We always advise operators to be aware of capacity, because, if they can’t cope with
Unless businesses take a hit on low utilisation, many need to look at discounting to fi ll quiet times – but there are smart ways of doing this
DISCOUNT DEALS
the numbers, that leads to bad reputation. We’ll fre- quently cap a deal, so spas don’t become overrun and we would refuse to work with operators who offer daily deal, aſt er daily deal
and therefore deliver a terrible customer experience and have poor reviews. Although a powerful tool, daily deals
aren’t for everyone. T ose who don’t want to be seen discounting or are not seeking big volumes might prefer a value-add option such as a two-for-one or even a full-price promotion. One of our top 20 sellers is a £140 (us$218, €161) spa day with 75-min- utes worth of treatments, use of facilities and lunch. We take a 15 per cent cut on this. T is is easily manageable for operators when it comes to volume, as it may only result in a few orders per day. Regardless of whether you’re doing a
MobDeal or an Evergreen off er, not all deals are alike. For example, if repeat custom is a key objective, some services such as hair and medi-spa services, are more conducive for repeat custom.
Prior to setting up Wahanda, Champal- imaud was responsible for developing
LastMinute.com’s non-travel business across Europe. Details:
www.wahanda.com.
D
eal sites have made the spa market accessible to more people,
NICKY NOBLE Co-founder, Scin Beauty Spa
but customers no longer want to pay full price. So, it’s important to have a balance in your strategy – running your whole business on deals doesn’t make fi nancial sense. Last year, 20 per cent of our customers came from deal sites, but every spa is diff erent. If I only had two treat- ment rooms, I wouldn’t consider it. Our Scin Beauty Spa in central London,
UK, has nine treatment rooms and fi ve mani/ pedi-stations. We use Dr Murad, Aromather- apy Associates and Dermalogica products. We started off ering online voucher deals
with Buyagift and Activity Superstore in 2006 to generate customers. Our best seller for years was a 50 per cent discount on a mini treatment package with Buyag- iſt . As the market was more buoyant, we could restrict use from Monday to T urs- day, between 9am-3pm. T is helped us to utilise our capacity during our quietest periods. Plus, voucher deals usually have a
bigger profi t margin as you are not normally required to give as much discount. Our most successful daily deal was a Mob-
Deal with Wahanda – a £28 (us$44, €32) mini package including a 30-minute facial, 30-minute massage and fi le and polish. We sold 1,200 and got 900 customers through the door. Gross profit was only £6,000 (us$9,350, €6,900), but it was more about marketing. As we’d just opened our spa, we wanted to expose as many people to it as possible and we got a lot of reviews on Wahanda to help build our reputation. T is instant hit of customers and cash-
fl ow was what we needed at the time, but we wouldn’t run it again now the business is more established. Also the demand for daily deals is decreasing in the UK now the hype has died down. And you need to be realis- tic about upselling – if someone’s only paid
28 Read Spa Business online
spabusiness.com / digital
£20 (us$31, €23) for a mas- sage, it’s unlikely they’ll pay full price for one again, no matter how great it was. I’m really careful about structuring deals and always
look at how easy it will be to upsell, if I have the capacity and what the cost is. My advice to any operator looking to do an online deal is don’t pay more than 30 per cent com- mission and don’t get bullied into doing
‘on-redemption’. T e other day, a salesman tried to convince me that only 1 per cent of customers don’t redeem their deals – I’ve tracked this on our soſt ware system and it’s always between 10-30 per cent. Before going with the bigger companies,
why not test the water with smaller deal sites such as GoGroopie or Crowdity [in London, UK]? Each spa or salon is diff erent and own- ers need to think about what they’re trying to achieve and what will work for them.
Nicky Noble set up Scin with her sister Anna in 2006 and specialises in customer service. Details:
www.scin.uk.com
SPA BUSINESS 4 2011 ©Cybertrek 2011
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