Before 2020, many salons, spas, and medical spas didn’t think a membership model was right for them. That’s changed. The challenges of COVID, and unmistakably positive numbers from membership-focused businesses, show the membership model as one of the most reliable sources of profitability today.
As part of Innergize 2023, the landmark beauty and wellness event from Zenoti, four industry leaders discussed the value of a membership model and some innovative approaches to managing yours.
Cindy Meiskin, Chief Experience Officer, Hand & Stone Massage and Facial Spa
Ryan Rose, CEO, VIO Med Spa
Josh Goodell, CEO, Boardroom Styling Lounge
Moderator David Crisalli, former CEO, Massage Envy
Here are on-the-ground insights from these executives on why every business can benefit from a membership model, and how to run a profitable, successful program that delights customers and excites service providers.
Why should a beauty and wellness business run a membership program?
1) A membership model delivers predictable revenue.
Every member of your brand represents guaranteed income every month, regardless of whether they frequent your locations for service. That kind of regularity helps you forecast and budget your business and ensures that you never start a day or month from zero.
2) Upselling to members is easier.
Cindy Meiskin from Hand & Stone says that membership provides “a great opportunity to upsell,” and consumer data from Zenoti backs that up: Three out of four beauty and wellness regulars express a high level of trust in their service providers. That trust easily translates into greater comfort taking advice and recommendations for add-ons and upsells.
3) Your members represent far more financial value than other guests.
Again, data tells the story. Josh Goodell says analysis at Boardroom Styling Lounge shows a member’s lifetime value (LTV) about seven or eight times more than a non-member's. Whether that’s from more visits, higher spends, or longer loyalty to the brand, the result is the same: much more revenue.
4) A membership program engages your team of service providers – when done right.
Members have one-on-one relationships with their stylists and providers. Just the presence of a membership program helps providers build their book of business faster, with a clientele that’s already loyal and built in.
How to run a membership program that maximizes profits
1) Think of your members as active brand advocates.
Cindy Meiskin calls members “a little army of brand ambassadors:” “They’ll go out to your community and tell everybody how wonderful you are – just by virtue of being a member,” says Meiskin, hinting at the psychology involved in being part of a communal fan group.
2) Keep your membership program simple.
When your staff can easily explain your membership program, two things happen: 1. They’re more likely to want to sell memberships. 2. Customers are far more likely to understand their options. As an example, VIO Med Spa has just two membership offerings, including a basic banking membership that serves about 80% of the VIO clientele.
“Keep it simple. We tried a pregnancy membership; it was just too niche. We looked at a stretch program – just too complicated. When somebody comes out of a massage, the last thing they want is a complicated membership pitch. Keep the pitch simple, that’s our biggest lesson.”
- Cindy Meiskin, CXO, Hand & Stone Massage and Facial Spa
3) Use best practices to train your team to sell memberships.
It’s not enough to just create a membership program that’s easy to understand. You still need to educate your team on how to sell it. Use tried-and-true training to get providers and staff in the right frame of mind. For instance, role-playing is at the center of membership education at Hand & Stone. At Boardroom, staff are trained to approach membership sales as experienced professionals rather than “salespeople.” Boardroom training also shares data that shows members tip more, a metric that gives providers an added incentive to sell.
4) Ensure that your staff believes in the membership program.
A top-selling team doesn’t just know the details of their program – they also believe in it and can convey that to their clientele. As Ryan Rose suggests, “Do your front desk people believe you have the best membership in the game? Some of them can’t actually relate to it yet. You need to have belief... then you can execute on all the technical stuff.”
5) Take your membership program on a test run – especially when introducing changes.
If you’re looking to launch a membership program, or revise a current one, work out any hiccups in a small setting. A multi-location brand should launch a new program in one region or one shop, learn from the process and any mistakes, and use that learning to launch across the entire brand.
“Test in small buckets. Work out some of the operational kinks. Spend some time, take learnings from that test and build out a more holistic launch plan for the system.”
- Josh Goodell, CEO, Boardroom Styling Lounge
6) Know your customers’ tastes and trends.
A membership program must be flexible enough to evolve with its members. One surefire way to keep members engaged and loving a program is simply to ask what they want – and then see which of their wishes can be implemented.
At Hand & Stone, Cindy Meiskin found it easy to respond to some requests, making “tiny little tweaks to our services.”
For instance, some customers complained about massage therapists’ cold hands. The tweak: heated oil. To respond to requests for more aromatherapy, Hand & Stone added that into some of their introductory services.
The key is to identify the specifics that keep your members in the “likely to recommend” category and apply those that make sense and can drive sales.
7) Raise your prices as markets allow – and let your members know.
Ryan Rose explains that VIO Med Spa has three tiers of membership pricing across his network, based on location. Each level is assessed differently.
“Obviously, Boston is more expensive than Cleveland. Seattle is more expensive than Nebraska. We typically do annual analysis on where those tiers are going.”
David Crisalli, former CEO of Massage Envy, summarizes the membership operation as revenue driver: “Once you get into the membership realm, these are living, breathing products. As you navigate the economic climate, communicating prices to your membership is critical.”