Spa menu engineering involves maximizing the profitability of a spa by encouraging customers to buy what the spa offers, but at the same time discouraging the same customers from buying other services that although the spa offers, it doesn't want to sell at a particular time. Basically not anytime, not anyhow, and not to anyone.
There are several areas that contribute to Spa Menu Engineering. One of the very important areas is psychology (see details in the video at the end of the article):
Let's not forget that before we understand which treatment brings us very high profitability, a very high contribution margin, first of all we have to evaluate each treatment, we have to determine the costs that are involved.
What we have to remember is that we have to add in our cost calculation the product that is involved in this treatment, but at the same time, the eventuality of the product that is lost. We have to calculate the therapists' salaries. We have to calculate very well all the operational costs that can be fixed, invariable, variable, incremental.
Contribution margin is the difference between the price you have displayed on the menu, we easily subtract the costs and see which treatments give us a higher contribution.
But, what was noticed in this diagram, which is the Boston Consulting Group Matrix diagram?
Basically we can divide targeting treatments into four categories. And these treatments can be divided according to: firstly the interest and popularity with which they are sold on one axis. On this axis is customer demand.
On the horizontal axis are the costs from which we can deduce the contribution margin very well. The moment we have treatments with high demands, which means they are very popular but they don't cost too much, in terms of the products that are included, and so on, they will automatically give us a high margin of profitability.
are the most important treatments. They are the ones that bring us the most income and in this category will fall those treatments that are oriental therapeutic, those USP treatments that differentiate us from our competitors.
Those treatments that are called Signature Treatments.
There are those treatments that although they are popular in sales unfortunately don't bring us very high profitability. They're quite expensive. And generally fall into the categories of: beauty treatments, manicures pedicures, waxing and so on. Maximum attention as receptionists juggle the right time the right treatment for the right client, the right slot.
This is also called management.
Selling the right treatment according to encourage very high contribution.
Though the treatments are the same, but by knowing and training our team how to sell them and at what time to sell them, we can actually add another 20 percent to our daily income.
It's a very interesting type that doesn't cost extra.
Puzzle treatments are those treatments that are not very well known but at the same time they are low cost and as an example I'll give you here let's say four hands massage.
It's not very popular and it brings us some profit but it will never be as popular as a normal, classic massage.
We have quite low demand and we have very high costs so we have to be very careful when we distribute them and how we distribute them. When we have already established and we know how to frame these treatments, it will be very easy for us to drive the business in the direction we want to go. But let's not forget: the investment in therapists and the investment in the receptionist is absolutely a very, very important condition.
I won't go into too much detail here because there is a lot to talk about and a lot to break down. But what I can tell you is that the idea of marketing somehow assembles around the effort to communicate something. And through that something - if we hit the specific target customer segmentation - it will turn into sales. If it remains only at the level of communication in no way had the desired effect.
Within the menu, we really need to get organized and put together a menu based on a marketing plan for the whole year. And this marketing plan has to be very well consolidated, divided into several categories according to the type of clientele we have.
We can have those who have spas within the hotel we have:
That's why when we design and conceive these offers we must not forget to focus on the core clientele. They are the DNA of our spa. Why, because 201TPTP3T of our customers, in fact, bring us 801TPTP3T of the spa's revenues and receipts.
Practically all of us know that we have certain clients who are part of the elite clientele that contribute more to our revenues and in this way we have to analyze them: what do they have in common. What make us different from other members or other customers and why they are willing to invest more than others. So somehow let's not waste our time with that category of customers who basically don't bring us much revenue.
Let's not forget the pareto principle: 20 percent of our clientele can bring us 80 percent of our revenues. Please identify please look in the reports and see what are those treatments that they are focusing on and try to build a trend because that way you can anticipate: what are their needs in the future, how can you modulate the spa's actions according to their desires.
They are a multitude. But I would like to emphasize the ambassadors of value: the Spa team.
Unfortunately, from all the experience I have had so far, very few owners, or very few managers, emphasize preparation, training and especially experimentation with treatments from the team. Think about it: your team are the ones who convey in a very eloquent way. And it's a marked difference between that someone experiences a treatment, can sell much better and much easier. So somehow I'd like to encourage you to give your team permission to experiment with some of your key treatments.
No one is saying that if you have 40 treatments you all have to do these 40 treatments, but it's very important to emphasize this.
Everything else is perfectly self-explanatory:
when it is part of the hotel not to forget to create small spa corners. Place them in key areas of the hotel. Let's not forget to create symbols that will influence us and subliminally entice us to come to the spa. Don't forget to place menus, work in collaboration with all other departments with F&B, place menus in the rooms.
is about promoting our business through another business. And many are probably already turning to this technique. Our spa can be promoted through other agencies, catering agencies or those who organize wedding events. So somehow make use of all these creative ideas to publicize your menu. Our menu, like I said is our DNA. If it's right, it's healthy, automatically and our cell which is our business will function in a healthy way for the long run with vision, with mission, and all that.
You can organize parties, you can invite VIPs, you can let them experience some samples of your treatments.
I came across a lot of menus with various things they could improve. Most importantly is the introduction of signature treatments.
Why? These signature treatments will set us apart from our competitors.
Unfortunately there is this widespread phenomenon of copy & paste. Which means that we out of a desire to transform business with a very quick result, copy from the spa next door their idea of signature treatments.
But let's not forget those signature treatments for them have a different meaning. When we copy the idea, we don't copy the business model. We just copy the title, we copy the content, but in no way will it necessarily have the same applicability. We risk losing more in the long run than we gain otherwise.
Please do not copy what is happening in other spas because it will not give us the result we expect. I remember the same with great pleasure when I worked in the Channel Islands, in an Ayurvedic spa, where indeed we were mostly using products from Indian elements based on sesame and so on. In another spa where I worked, in Crete, we were using treatments that I was very fond of, which were based on rachi, a wonderful drink.
When you need a special spirit, and so on. But you may wonder what does this rachi do? Basically the moment we had a cold, we had muscle aches in combination with olive oil brought a special mood. So somehow try to get creative. Let's think about what new element we could come up with so that we are perceived differently from other competitors. We take ourselves to another, higher level. We are the focal point of customer attraction.
It doesn't have to be confusing. Imagine when the customer sits for 10 minutes in front of a Bible at reception, because the menu is so thick they can't make up their mind, and the receptionist, that receptionist wastes is very important time communicating.
The point is to communicate. If we don't communicate, it's not good. When we communicate too much, it's not good again. Why?
Because we tend to waste valuable time that we could turn into money by distributing attention to another customer at the same time.
It must not be prohibitively expensive. Think about how important it is to analyze the prices beforehand, and let me tell you to get at the right level in the current market:
Our treatments, by the way, must fully reflect the spa concept, spa location, spa mission, spa vision.
Nothing is by chance in what our spa means. And another very important thing is to run a minimum stock of products. In how many spas have I noticed that the whole operation relies on a huge stock of products. Yes, it's great to have products, but we need to know how to run them in that way and offer treatments that don't require 30 products at the same time in a treatment. So there has to be a balance, plus have minimal health risk.
let's not forget, and it may seem too much, that the Spa can be compared, or likened to a human being. It is probably a bit exaggerated but it has a body, it has a soul, it also has a heart and it has a brain. The moment one of these aspects will not function at the right level at the right level, and we deprive one of these elements, and what do you think will be the end? It will be an unfortunate one because the whole operation will suffer.
We will not have the expected profitability at the time we do budgeting, and forcasting, and so on.
We don't just offer products, we don't just offer services, we offer experiences. Through that we can offer certain unique experiences for each individual customer. The customer doesn't necessarily come back for a product, although it happens, they come back for a product, but the customer comes back to recreate that experience.
Signature treatments bring us an extra amount of revenue. Let's not forget that between 50 and 80 percent of otherwise dominant treatments are massages. Why not replace two massages that are classics, and that we know we can fit in the workhorses? Take them off the menu, and in place of those treatments we can bring in a couple signature treatments that will add another 25 percent to the takings!
Because we will put a first price, we can't put ourselves at the same price as classic treatments.
Larisa Marinica,
Spa Specialist
You can also view the video on spa menu engineering - with more details than the article above, in Larisa's presentation at the SPA Business Networking event in 2017:
Virtual Wellness Explorer
