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23 Apr 2014
Nic Ronco's YeloSpa trials innovative membership scheme
BY
Helen Andrews
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Unused services can be rolled over indefinitely, gifted at no charge to friends and family
photo: YeloSpa
YeloSpa, the fast-growing spa franchise, is trialling a new membership programme at its New York site – the Alive, Beautiful Club to engage customers and develop robust, recurring revenue streams. The aim is for membership income to cover fixed costs and create a more profitable business model. Nic Ronco, founder and CEO told Spa Business. “This is a major evolution in our business – my intention has always been for YeloSpa to become a lifestyle company with the aim of incorporating wellness into customers’ lives".
For US$99 (€72, £59) a month, members get their choice of a 60-minute massage or skincare treatment, plus 20 per cent off additional services or gift cards and a 10 per cent discount on retail.
“We listened to our customers for two years and asked them what would motivate them to come once a month to our spa – they said a membership. It’s a very attractive offer – US$99 is a big discount, as a massage costs US$144 (€104, £86) and a facial US$150 (€108, £89),” said Ronco.
The membership is unusual because unused services can be rolled over indefinitely or gifted at no charge to friends, family or colleagues – in addition, members can cancel at any time.
Ronco says other spas, such as Massage Envy, make it hard to cancel: “We make it very comfortable for customers. We let their memberships roll over indefinitely and they can gift services to friends with no questions asked.”
There are some checks in place however, if a customer cancels their membership, they can’t reinstate it for six months. “This is to prevent people gaming the system’” says Ronco, “This is where we draw the line. If you make it easy to leave, customers feel comfortable coming back for more.”
The programme is being piloted to test the model and the pricing, so only 300 memberships will be made available in 2014. “We’re limiting memberships to 300 to see what it does to the P&L,” Ronco explains, “We want to see how the consumer behaves – whether they roll-over or offer membership services to friends and family.
“It’s been a great success so far,” he says, “We’ve sold 50 memberships online, on the phone and in-store in three days
“Alive Beautiful is our tagline so the Alive, Beautiful Club’s initials stand for the ABC of wellness and taking care of yourself. People will remember it,” Ronco concluded.
Read more: http://www.yelonyc.com/
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