editor’s letter Fine tuning deals for profi t W
e’ve been busy investigating the daily deal website market for a series
of features for Spa Business – the first runs in this issue on page 24 and we’ll be following up with more coverage in future editions. When websites like Groupon fi rst
launched, many senior fi gures in the industry railed against them, fearful of their impact on reputation, margins and profi tability. However, things are changing and deal sites are becoming an increasingly popular, eff ective way for spas to improve yield, by shiſt ing all but their most premium time. T e way consumers buy spa experiences
is changing too and as with most areas of life, is moving online, with purchases increasingly being made on mobile devices. ISPA’s latest research (see page 38) found that 95 per cent of
spas now have a website and 28 per cent are already using deal of the day sites, while 8 per cent are using ‘fl ash deal’ sites. T e management information which can be generated from
analysing the way consumers respond to deals is invaluable in guiding the development and fi ne-tuning of menus, pricing and marketing as well as guiding the development of deals. Some operators have been using deal sites long enough
to know which clients buy which packages at which rate and which are likely to become either regular customers or members or spend the most on retail. It’s also a straightforward way to see how two deals stack up against each other. One example of spas fi ne tuning their off er as a result of
analysing deal-buying behaviour is the transition from ‘buy one, get one free’ – or BOGOF, as it was aff ectionately know
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MANAGEMENT
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SIR PHILIP
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How sport is coping with cuts
New Zealand’s Rugby World Cup venues
Using deal sites is a straightforward way of seeing how two deals stack up against each other and offers invaluable insights into how consumers respond to a spa’s pricing and product development
– to the newer and reportedly far more eff ective ‘two-for-one’ off er, otherwise known as ‘bring a friend’. On the face of it, these two deals are identical, yet one works
a treat (two-for-one) and the other (BOGOF) really didn’t work at all, highlighting the importance of small diff erences. T e power of two for-one is that it immediately adds a social
dimension – not only is it great value at a perceived 50 per cent discount, but you can take your partner/friend/relative along and suddenly it’s a whole experience. T ere are inevitable tensions between deal sites and spas
because deal sites can – at worst – be ruthless and parasitic, but those that are in it for the long-term set fair rates, off er good advice on deal structure and spend time developing relationships and there are defi nite signs that many are developing symbiotic relationships.
Liz Terry, Editor twitter: @elizterry subscribe online:
www.leisuresubs.com SPA BUSINESS 4 2011 ©Cybertrek 2011
contact us Spa Business magazine, Leisure Media, Portmill House, Portmill Lane, Hitchin, Hertfordshire, SG5 1DJ, UK Tel: +44 (0)1462 431385 Email:
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