The Machine Man was a character created by Marvel Comics back in the 1970’s. Here and now, in 2018, I reckon it’s a pretty good name to descibe a potential business model for the spa industry of tomorrow. Not the distant tomorrow, but real soon. Like now.
Any number of operational issues can come in to play with the use of machines as part of the spa experience. Capital cost and flexibility are perhaps the biggest of these. These machines can often be expensive and once your spa has made that investment, you are committed. If the specific treatment or service that this machine is delivering falls out of favour with your spa consumers, you lose. The Machine Man Spa model could solve the problem of both cost and flexibility.
A Machine, by any other name…
To be clear, by ‘machines’ I am really referring to any specialist equipment that can be used in a spa to provide either part of all of a treatment. A standard massage table would not, in this context, be considered a ‘machine’. A specialised massage bed where the mattress is replaced with hot sand or a bed of water or with lights fitted for chromotherapy, would be. As would the machines used in facial treatments. You get the idea.
The companies selling the wide array of spa equipment, or machines as I like to call them, and the spas they sell them to are in some ways at crossed purposes. Spas want to introduce a new machine to be able to offer an additional service to their clients and in doing so generate more revenue. The equipment makers simply want to sell as many machines as they can. These two goals are not aligned. A simple sub-contract type of arrangement could effectively change all that.
Instead of being a seller of this equipment to the spas, the supplier could become the provider of the services to the spa. The supplier would retain ownership of the equipment. They would come in to the spa, complete with the machine and the staff to operate it and provide the services to the spa clients directly. It would be like a spa within a spa. Revenues from the sale of the treatments and services using the machine could then be split between the spa and the supplier.
Changing the Dynamic
At first glance, this may seem like a great deal for the spa but a highly risky one for the equipment supplier. However, if this machine really does deliver something of value to the spa clients, the Machine Man concept should actually generate more revenue for the supplier in the long term than just a one-time sale would. With this model, the supplier has a vested interest in driving the sales related their machine. And in some ways, the supplier is actually better able to provide the services and treatments to the customers than the spa staff are.
The supplier should know all the features and benefits of their machine intimately. That should make them a better salesperson when it comes to the treatments and services their machine enables. People buy from people. That is something that is universal. If I believe that you believe in the benefits of this machine, that will go a long way to me believing in it too. And if I believe in it, of course, I would be happy to try one of your treatments. All the sales training in the world will not make the spa staff better at selling your product than the Machine Man.
Know your Machine
Specialisation is another benefit of the Machine Man model. The supplier would provide the staff to operate their machine and provide the services associated with it, and only those services. This ensures that the staff providing the service will be far more experienced in providing that specific treatment than if all staff were providing them. Indeed, one of the big challenges for spas that adopt an extensive spa menu is maintaining a level of quality of treatments across multiple services and multiple therapists. Like any skill, if you do not practice it regularly, your skills drop off. With one therapist from the supplier focussed on providing only the services using the machine, they will simply be able to perform a better treatment.
As we all know, therapist turnover is a big issue for many spas. If all therapists are trained on the use of this machine, there should always be someone available who can perform the treatments. However, as identified above, training the whole team may not always lead to optimal results. Conversely, if one or two therapists are trained as specialists on this machine and then they leave, the spa now needs to take time out to train replacements. Not to mention the lost revenue until the new therapists are trained and up to the level of the ones who left. Even if the supplier’s specialist therapist was to leave, the supplier should be better equipped to find a replacement and train them up quicker than the spa would be.
The most interesting aspect of the Machine Man model is the flexibility that would then be afforded to both the spa and the equipment supplier. Assuming there is no significant installation work required, the machine can be moved from one spa to another at any time. So, rather than have the machine as a permanent feature at any one spa, the supplier could instead change locations every month or two. In this scenario, the spa could promote the machine in advance to its clients as a short time offer. If done right, promoting this new machine as a Special Event, rather than a new piece of equipment, could generate more interest than if it was installed permanently at the spa.
From the supplier’s perspective, the rotating Machine Man model allows them to expose their product to a wider audience. Not just an audience of spa businesses but also the end consumers. Each spa business and each customer is a potential buyer of the next product the supplier brings to market.
Return on Capital Employed (ROCE) is not a term often associated with spas. Nonetheless, the basic premise of making the most efficient use of your resources is fundamental to all businesses. By sharing in the upside of the revenue generated by the spa when using their machine, the supplier should be able to generate a better return over the life of the machine.
If the machine really is as good as the supplier says it is and it really can generate the sort of revenues that they claim, the Machine Man model makes total sense from the supplier side. #OwntheUpside. If not, then they probably should not be selling that machine anyway. From the spa’s perspective, the combination of no investment, an additional revenue stream and the flexibility to swap it in and out, makes the Machine Man model super attractive.