Yielding for Success.
5 effective tips on how to implement yield management successfully in YOUR Spa!
I have worked previously in Spas with and without dynamic pricing. However, there is no doubt that each Spa or Wellness operation should implement a yield management approach today.
No one system works for all. Before diving into this exciting field of optimizing our revenue, you should first consider a few things to ensure a smooth implementation and successful longevity. Let me take you on that journey!
To start, you want to get a clear vision of what you want to achieve. Reflect on the following thoughts:
Conduct a market analysis to understand the overall business and potential in the marketplace. Visit competitors to discover their spa offering and programming. Find out where you stand within the market. From here, you can get a clearer vision of where you see your positioning in the market with the product you are offering.
Understand your business regarding hotel guests vs. local guests, first-time guests vs. regular guests.
What are your financial goals?
Once your vision is clear, you can start the implementation process. Here are some steps that I have witnessed Spa Leaders overlook when planning a dynamic pricing structure:
The first step when entering into this adventure is to understand your booking software and its capabilities to its fullest. Not all are the same, and all work differently. Then you need to find the best compromise in what you wish to achieve and what the software supports. Some software systems support dynamic pricing by the hour, others only by day of the week.
Create a plan on how to communicate this to your guests: in a printed/ PDF menu, on your Spa’s website and on your online booking platform.
Allow yourself time to set it up and use the help of your software provider to support you in this. Test it several times - and ask your team to test it.
Train your reservation/ reception team to communicate pricing to guests when they ask how much a service is. Create verbiage samples for your team like "our services have a price range, and the price will depend on the day you reserve your treatment. If you have a specific date in mind, I am happy to confirm the price for that day for you."
Allow glitches to happen. Stay flexible and adjustable. There may be here, or there glitches in the first weeks on how guests interpret the information that is shared with them. Be generous with those guests and grant the price they were hoping for. Though look into this feedback and search for ways to improve the communication to avoid such incidents for future guests.
Having a plan in place and a vision as the Spa Leader is key to a successful implementation.
What can be the benefit: At one point, I adjusted our Spa's yield approach slightly due to business increase and demand. The change took me 45 minutes to update our software system and online booking. In these 45 minutes, I added a bit over $40 K to our bottom line for the year. Quite a profitable 45 minutes, wouldn’t you agree?
Read more from my experience with Dynamic Pricing in this feature by Pulse Magazine from ISPA here.
I am curious to hear about your yield management approach for your Spa. Share it with us below in the comments.