Menu Engineering: Six Steps to a Better, More Profitable Menu
by Kate Mearns
Your spa’s menu of services should be recognized as your number-one marketing tool.
It’s your revenue generator. It sets your standards for guest experience and it represents your brand. Your menu of services is what guests review as they make their decisions about your facility, your services, your quality and your value. The menu needs to be easy to read, yet packed with pertinent information. It needs to list the available spa services, pricing, pictures, contact and booking information, amenities available, hours of operations, awards and even staff expertise. The spa menu is the lifeblood of your organization. It should be thoughtfully designed and evaluated frequently.
According to ISPA members, updating a spa menu is a common occurrence. In fact, when asked about their future plans, 2018 ISPA research indicated that 60 percent of spas planned to add or create new treatment offerings, 45 percent indicated they would introduce new product lines and 28 percent planned to create a new spa menu. Change is good. It’s just important to know what to change.
Here are six tips to help you optimize your menu of services:
1. SIMPLIFY THE CHOICES
It is easy to overcomplicate a menu and think more is better. However, guests can easily suffer “decision paralysis” when they are asked to select between numerous services, especially between services that seem similar. Too many service options complicate the decision-making process and can ultimately cause a guest to walkaway rather than decide. They become overwhelmed with options and fear making the wrong decision.
I’d recommend limiting the number of services per category to about seven. Ensure there is enough differentiation within the services to allow the consumer to quickly understand the differences. Service names should give the guest an indication of the service benefit, too.
Having a good walk-up menu at the front desk is important, too. According to an American Spa Industry study 46 percent of spa bookings occur at the spa’s front desk. Using your computer reservations system to identify what services you have available, create a simple walk-up menu which lists your most readily available and popular services. This helps reduce choice, allowing the guest to make a quick decision and avoiding having to repeatedly tell them “unfortunately, we’re booked for that service today.” Too many no’s often results in a turn-away. If this menu is electronic, it can be tailored daily to help maximize your bookings.
2. PROMOTE VALUE NOT PRICE
According to ISPA’s 2018 research data, the average amount a guest spends at a resort or hotel spa is about $141 per visit and about $81 per visit at a day spa. This
number has continued to improve year-over-year. Of course, the optimist in me thinks that’s good news, but the cynic in me worries a bit. Spa directors are continually competing for the consumer’s dollar.
For instance, I could spend $141, the average spend per visit at a resort spa, in many ways. I could buy at least a weeks’ worth of groceries at Trader Joe’s for two people, about eight bottles of decent wine or even a new pair of my favorite Blundstone boots. So, remember: to attract your consumer and ensure they commit to spending money at your spa, your menu of services must convey a greater value than other spending options. The benefit or value the guest receives from the spa visit must be greater than the price.
To this end, your descriptions should identify benefits. The goal of a service description is to highlight the spa service’s process, products and benefits in a succinct manner. A cumbersome description is not helpful. Instead, speak to the value of the product or process.
It’s also important to reduce the focus on price. It’s well-known in the restaurant industry that utilizing a smaller font and eliminating the dollar sign derails the consumer’s focus on price in the decision-making process. Avoid formatting the pricing with a trailing dotted line from the description to the right margin which tends to draw the eye directly toward the price. The price is best when nested under the service description.
3. RETHINK ENHANCEMENT STRATEGY
There is a lot of debate around the use of enhancements. Many menus list basic services and oXer the guest the option of adding various enhancements to upgrade or personalize the service. Under this format, the guest is forced to make additional decisions and check the value to cost ratio. I tend to recommend diXerentiating each of the services, rather than requiring the guest to add on and pay an additional surcharge for service upgrades or diXerentiation. For example, rather than offering a basic massage with a separate list of enhancements and leaving it to the guest to add on (or the receptionist and therapist to upsell), create a service that includes the benefits and provide a more specialized and valued service.
After all, enhancements are often just components of a standard service and can be incorporated within the same resource time. Whether you decide to diXerentiate the service listings or to provide basic services with the option to add enhancements, don’t add small increments of time to the service. This will reduce your ability to maximize resource revenue. Think of the enhancement as an “add-in” not an add-on”. Lastly, ensure your price per minute is the same for all lengths of service; after all, the resource—time—is the same.
4. ENGAGE YOUR STAFF
Spa directors have an extremely valuable resource walking through the halls every day and should take advantage of it. In any given period, our entire staff interacts with the guest during their experience; whether it’s making the reservation, assisting in the locker room and lounges, or providing the actual treatment. Take the time to engage your staff when creating or updating a menu. After all, they have firsthand guest knowledge about your treatments. They know what guests like and why they booked it, because guests often give direct feedback to therapists. Involving the staff in your menu development will ensure services are either continually
improved to meet the expectations of the guest or left just the way they are.
5. REVISIT YOUR BRAND FILTER
Your spa menu must reflect your brand. It should be designed so a guest feels they are in your spa, enjoying the benefits of your services, your staff expertise, your
products and your processes. Your brand distinguishes your guests’ experiences from your rivals. It is what makes you diXerent and unique. Yet, it is easy to dilute your brand. Since spas rely heavily on the partnership with vendors, I am simply suggesting you work with the vendors to tailor the services to amplify your brand.
Promoting a product or service that doesn’t support or compliment the brand can be jarring and disjointed to the guest.
To help keep the focus on your brand, create a brand board. This is your brand template. It might include words, colors and feelings that you can refer to in your service descriptions, promotions, scripting, etc. Using the brand board on all your menu items helps give the guest brand continuity. A unified brand allows for a stronger distinction of your spa over your competition.
When it comes to your brand, strive to be different, not better. You want your menu to stand out. You want your guests to understand how you are different than your competition, not just better. If you provide better service, better amenities, better staff, will you also provide better pricing? Move the dialogue from better to different. How are you unique? How are your products, processes or people unique and different?
6. USE LAYOUT TO BOOST REVENUE
Over the years, I have seen many menu formats and I’ve learnt there is no one magic design or layout. However, there is data and research available to optimize layout which spa directors can incorporate into their menu design. Most importantly, the menu must speak to the brand. It should be simple and easy to read. The typeset should be large enough to easily read and the ink dark enough to be distinguishable. The menu should give the guest the information needed to easily reserve an
appointment—online booking info, reservation numbers, location on the property, etc.
In addition to the basic menu necessities, service placement within the menu helps influence guest selection. Having sales and revenue data available, as mentioned in this story’s sidebar, will help you know what services you want to influence your guests to select; then, you can optimize the placement of those services within your menu.
Remember that guests initially scan the menu. When a guest picks up a menu, they quickly scan it, and the first item they see typically makes the most lasting impression. Therefore, the services which provide your spa the most revenue and are most popular should be placed on the menu in an area designed to attract attention. You can also call attention to a service by adding a “menu magnet,” such as a highlighted color or a box around the service, to “stop” the eye and force the focus on a particular service.
Price anchoring is another powerful tool you can use. Consumers tend to rely heavily on the first piece of information offered (the “anchor”) when making decisions.
Therefore, the first price a guest sees sets their expectation. If the anchor price is high, there is a tendency to reduce a guest’s price sensitivity on the other services listed.
A CLEAR PURPOSE
As spas become more savvy with the development and refinement of their menus, revenues and guest satisfaction will improve. The project of creating and enhancing a menu should be fun. It is, however, vitally important to make updates and enhancements with a clear purpose in mind. And then, you can track your results. The impact your spa menu has on your business is priceless.
KNOW YOUR NUMBERS
To optimize your revenues and guest satisfaction scores, it is important to continually track your actual booking data. You must know what services are being performed and what each service is contributing in revenue to your top line.
Revenue Contribution: To determine the revenue contribution of each service you simply subtract the fixed costs to perform the service from the service price. (Costs do not include labor, or any other costs associated with running the spa like laundry, and marketing.) The result gives you the revenue contribution value of each service. This helps you know what services to promote to generate the most amount of top line revenue.
Service Popularity: Tracking how many of each service within a category is being performed over a given period gives you the service popularity or service demand. But please note, there may be inaccuracies in the actual demand of a service. For example, a service might have a low booking rate not because it isn’t being demanded, but because of a lack or a staff or resources. Be aware of this data.
Once you have this data, don’t be afraid to remove the services that are continually under-performing. Eliminating extra inventory and training time reduces overhead and allows you to focus on the services which are most popular and contributing the most revenue. Also, tweaking services that are popular but not high revenue contributors can prove beneficial.
Also, make sure you don’t discount your top performers. It’s better to add additional service value and avoid discounting. Also, I don’t recommend discounting your Signature Services—that’s your brand, and that’s not negotiable.