TECHNOLOGY
profitability across all of our Sugar Me Wax salons. It’s exactly what we needed. We’re seeing about $1,000 to $2,000 in additional revenue each month per salon – just from Frederick boosts alone.” There might not be a magic equation or set method available to spa operators when it comes to implementing revenue management techniques, but those that have made the leap have seen a positive impact on their businesses. As Ramside Estates’ McIvor explains: “We implemented a new revenue management strategy in November 2016, and since then, we’ve achieved an increase in turnover by 40 per cent. We’re constantly trying to achieve the best yield by forecasting, controlling and manipulating prices for spa day guests, treatment guests, hotel residents and spa members in the facility at each time slot to make sure we are striking the balance that delivers us the highest return.”
CUSTOMER COMES FIRST In an industry where guest experience is key, the customer’s perception of any business strategy needs to be thought through carefully. One of the key concerns for spa operators in using dynamic pricing or availability is that the very techniques that are used to boost profitability might alter customer behaviour enough to lead them to undervalue the service.
Ramside Estates spends time forecasting and manipulating prices to strike the best balance
We implemented a new revenue management system in November 2016 and have seen a 40 per cent increase in turnover Nick McIvor, group revenue manager, Ramside Estates “There are always concerns that customers will get used to paying discounted prices and undervalue a service if they see too many offers and promotions,” explains Booker’s McCarter. “Tools that allow easy customisation of offers reduce that risk by directing communications about promotional pricing to specific customer groups.” Miraval’s Hopper agrees: “The primary challenge with spa revenue management is adapting the sales culture of spa and reservations to see this as a benefit to the consumer, rather than a tactic to optimise profit,” he explains. “Once colleagues are on board and can represent availability with confidence, negative consumer perception becomes minimal.”
FUTURE PROOF
Spas will be under pressure to provide the ultimate experience, as reviews will play a large part in repeat business Leonie Wileman, chief operations officer, Premier Software 102 spabusiness.com issue 3 2017
And what of the future? As spa software continues to evolve, how will revenue management techniques get easier for operators? Premier Software’s Wileman envisages that most bookings and communications will be carried out online in the not-too-distant future, which means the actual spa experience will need to deliver more. “As all bookings move online, the experience changes from personal to virtual, and spas will be
©CYBERTREK 2017
under pressure to provide the ultimate experience, as reviews will play a large part in repeat business,” she explains. “As clients demand more, a spa’s software system must be able to pre-empt a client’s next move, and also integrate with the latest social media platforms.” TAC’s Poellabauer believes that flexibility is key. “Millennials are striving for self-optimisation and selfdetermination, especially when it comes to planning their leisure activities,” he explains. “They’re more flexible and spontaneous, and they appreciate their work-life balance. Treatments such as early-bird sessions before work or quick lunch massages, as well as dynamic packages, will be of more value than appointments that have to be booked months in advance. This flexibility will be rewarded with attractive prices.” As customer behaviour evolves, spa software needs to be adaptable to changing business requirements, helping operators meet upcoming trends and client-spending habits head-on. ●
Kate Parker is a contributing editor at Spa Business. email: kateparker@ spabusiness.com