Using Spa Management Systems to Enhance Profitability

By. Bill Healey 12th Apr 2004

The spa industry, like all business sectors, is continually monitoring performance to ensure they”re meeting revenue and profit targets. Software tools have been available for more than a decade to assist directors in managing and enhancing the way they do business.

The spa software market has matured, and some developers are providing leading-edge solutions that provide significant benefits – from how the spa”s services are marketed to local clients and tourists, to how staff and transactions are tracked. Some of the more recent software advances also involve significant reduction in costs associated with managing multi-site spa operations. A description of a few of the many potentials of a spa management system is as follows.

Improved Customer Relationship Management (CRM)

Perhaps one of the key benefits to employing advanced software is the depth of data they”re able to collect about their guests. Utilizing software tools, the spa is able to enhance the ways in which they interact with their guests. They”re able to:

  • Build and maintain an extensive database of information on the spa”s guests. This includes profiles, contacts, treatment history, retail purchases, inquiries and complaints. The system should ensure that the spa captures and stores data on every interaction between the spa and the guest through all communications including email, telephone, fax, website and personal visits.
  • Massage the data into usable, accessible management and marketing information. Ensure the data is up-to-date, allowing you to analyze historical data to identify trends. Make the data accessible to management and marketing teams on a timely basis, allowing for corrections to stay in-line with preset CRM strategy. Use the software to develop response and contact strategies that improve customer relationships, team productivity and profitability.
  • Share data across with proper management and marketing personnel to provide staff with a 360-degree view of the guest. This enables your team to provide a better service to the customer, and gives them the tools to identify sales opportunities based on the customer’s history and preferences. This access should be available at any time, 24/7.

A useful spa management system will allow users to improve the frequency and quality of customer contact by automating and personalize customer communications. Use personal dates that are important to their clients. There are important dates in every person”s life, such as his or her birthday, anniversary, child”s birth, graduation or job promotion. Each of these events provides an opportunity to promote the spa”s services and products at a meaningful time to the client.

A personalized email wishing the client a happy birthday, or a special his & her service on their anniversary provides a much greater return on marketing initiatives. Since these events are significant to the client, the spa has an opportunity to strengthen their relationship and increase future business.

The spa can also send automatic confirmations for upcoming appointments, which provides yet another opportunity to highlight products and services in a message the client is more likely to open. These event-based, outbound messages are seen as being less intrusive since they are based on recent interactions. Some have estimated that event-driven marketing efforts produce response rates five times greater than traditional outbound campaigns.

Consider enhancing your guest relationships further though the use of social media. Gartner Research addresses the growth in the use of social media to enhance customer service, forecasting that 30 percent of leading companies will increase use of this tactic by 2013. Data from social communities can be used to enhance customer profiles, improving service and guest satisfaction.

Maximize Yield Per Treatment

A significant benefit of maintaining historical data within the system is the ability to use statistics to maximize yield per customer. Most spa directors will recognize that the demand for treatments greatly exceeds the supply during certain parts of the week, or even certain parts of the day. Using historical transaction data the manager can recognize when demand is strong, when it is moderate and when it is weak.

Using this data, management can set pricing strategies to manage demand at each level. In times when demand is strong, prices could be increased to bring demand more in-line with supply. For times when demand is weak, enticing local guests with lower priced treatments may be an effective measure to increase demand and boost profitability.

Analyzing demand and setting pricing models is difficult when maintained by pencil & paper, or on a standard spreadsheet. Effective review of demand, and setting pricing structures, becomes a much simpler task when using an effective management system.

Employee Productivity

Employee productivity can be positively affected by the installation of an integrated Spa Management System. By electronically integrating the booking agenda with client profiles and sales data, spa managers can receive daily and monthly statistical reports at the press of a button.

Of particular value is the ability to know when therapists may have down-time, or time not booked into treatments. These staff can then be assigned to other tasks, such training for new treatments or cleaning and maintaining another part of the spa. Analytic tools will inform management that the scheduled staff is working toward making the spa a better place to be.

Reduce Inventory Costs and Out-of-Stocks

Knowing more about the historical sales pattern at the spa”s retail shop, and keeping track of minimum stock levels will assist in lowering the cost of both retail and professional stock.

When inventory and sales records were kept manually, the only way a spa would be able to keep retail items in the boutique and professional items in the treatment rooms would be to maintain a very high level of stock. Managing inventory turn times and restocking times is a very difficult task when manually maintained.

With a properly implemented retail and point-of-sale system, lower levels of inventory can be stored in both the boutique and treatment rooms. Each item is given a value that alerts management when these low-inventory levels are met. Further, the system provides re-stock levels to ensure spa management places an appropriate order with suppliers.

Integration between Spa and the Resort PMS

A common missing link between the spa and resort is an enhanced link between the spa IT solution and the resort”s PMS. Often the only connection between the two is a posting link allowing charges to be posted back to the client”s hotel folio. Vital information on the client is often hidden from the spa. This is data that would be important in servicing the client for the current treatment and in future marketing.

Sharing profiles between the spa system and the resort”s PMS, also reducing the time associated with profile duplicates, re-entering data and providing the client with a single itinerary.

Attaching spa reservations to a guest”s profile in the PMS is important, as it helps reduced missed revenues from no-shows. Without a fully integrated spa and PMS solution, it is common for a guest to cancel or change a hotel reservation without notification ever making it to the Spa. When the guest is a no-show at the spa, they lose the guest”s revenue and have a therapist not being utilized.

It is quite important that a full-link exist between the resort”s PMS and the spa booking system. This will improve relations with clients and will reduce lost revenues by missed cancellations. An enhanced link between the spa system and the resort”s PMS is a key factor in increasing the ROI.

Multi-property Sites – Setting Heterogeneous Client Environments

It”s a surprise to see some prominent multi-national hospitality groups bringing in a mix of non-conforming, non-standard IT systems into their spa and leisure facilities. For instance, a company”s resort in India may be using Vendor A, their resort in Oman using Vendor B, and their resort in Thailand using Vendor C. A non-standardization certainly increases the level of complexity within the organization and reduces the return on investment.

Some of these multinationals have been making significant efforts to standardize on a single Property Management System (PMS), but have failed to carry on department, system selection is often left to the spa manager who either has experience with another system or receives a special price to bring another solution in.

Standardization on a single spa IT platform can be a significant step toward achieving a positive ROI for several reasons. First, working with a single system will help reduce the amount of time and effort required to collate and analyze data from spa sites around the world. A single interface and a single method to collect data should make it easier for the corporate office to review vital sales and revenue data.

Standardization should also facilitate the vendor-client relationship, giving the multi-national more leverage when requesting specific software and reporting enhancements. This improved vendor-client relationship should also result in better site-by-site service pricing helping improve the ROI.

Working with a single IT supplier will also allow the group to internalize a portion of the systems training and support. Corporate IT should be able to take on the first level of systems support, helping provide quicker response to issues at their sites around the world.

After a decade or more of various spa software options, the industry has matured and now provides a very robust and reliable set of tools to make a spa more profitable. Following general market advancements, utilization of spa software has also allowed broader access to vital data allowing the spa to enhance customer service, increase revenues and minimize up-front investment.

About Bill Healey

Bill has spent the past 30 years working in the area of Spa, Golf and Resort technology, and has been involved with successful golf & spa systems implementations in close to 40 countries. Aside from overseeing the design of golf club systems as early as 1982, Bill has established software distribution and support partnerships around the world.

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