Week 2

Neha K -

Welcome to Week 2!

For background information, I want to explain how the membership works in greater detail. The Hand and Stone membership is a monthly membership, so you get charged once a month and that gives you a “credit”. Each credit can be used towards a massage or a facial, your choice. These credits continue to roll over and never expire, so even if you came in for the first time after 3 months, you would still have 3 credits in your account to use towards 3 services.

This week I focused my time on preventing members from cancelling. This is something we call membership retention. Our objective is not only to gain new members but also to keep the members we already have, retaining our membership count. Now you might be wondering how we can do that. There are a few options. We can freeze a membership for a few months, where the client isn’t charged but can still enjoy their membership benefits. We do this if a client is having medical issues and isn’t able to come in while they recover or if a client already has a bunch of credits built up and needs some time to use them all up before they keep accruing more. If a client is going through some temporary financial troubles, we can switch them to a bi-monthly membership, so they only get charged (and accrue a credit) every other month instead of every month. Lastly, if a customer wants to cancel because of a bad experience, we do our best to work with them and compensate them for any inconvenience.

Here is an example of membership retention that I did this week:

There was a girl who came in a few days ago wanting to cancel her membership. After talking to her a bit, I found out she had 3 credits accrued and had recently started a hectic job. It wasn’t that she had any complaints with the membership—she actually loved it very much and wanted to keep it—but she didn’t want to keep being charged for credits she knew she wouldn’t have the time to use and was already behind on. Instead of just allowing her to cancel, I asked her if she knew about our “freeze” option (she didn’t). I explained to her that for these next few months, while she’s getting settled in at her new job, we can stop charging her monthly so she doesn’t accrue any more new credits, but she can still come in to use the three she already has if she ever finds the time. If she canceled, she would lose the three credits that she had already paid for (if she wasn’t able to make it in the 60-day grace period we allow canceled members to use any remaining credits). The girl was so much happier with this option and didn’t cancel.

Sometimes, all it comes down to is a little bit of listening and educating your clients on what might be in their best interests.

 

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Comments:

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    Jamie
    Hi Neha, I'm interested if this lack of knowledge on the marketing strategy could be fixed by more detailed promotion. Do you think people would see that specification and be more enticed, or grace pass it unknowingly? It sounds like the customer pool would like this idea, using similar strategies to Audible, but hasn't been informed about it's existence at all. To add on, what is the membership signing-up process like? I'm guessing the credits accumulate through a digital system, but an in-person system would let one discuss these specifications with their client.
    February 21, 2024 at 5:56 am -
      neha_k
      When we sign up a member, we do briefly go over these options with them, but we also don't want to bombard them with too much information at once. After they sign up, we do send them home with a pamphlet going into more detail about their member benefits and options, it's just that most choose not to look at it.
      February 25, 2024 at 9:32 pm -
    mugi_s
    Great post Neha! I had a quick question on the credit system, can a customer use multiple credits to fully cover a premium service at the spa?
    February 21, 2024 at 2:47 pm -
    georgia_b
    Wow Neha! This was a very detailed post! Do you have a set process when a person wants to cancel their membership or is it on a person-by-person basis? It seems like everyone has their own reasons and concerns when thinking about freezing or canceling their membership, so I was wondering if you have had any big challenges with "negotiating" with people to keep their membership. Keep up the great work!
    February 21, 2024 at 6:38 pm -
      neha_k
      That's a great question Georgia! It does vary from person to person, so we always have to consider which option would be most beneficial for their situation. The hardest people to have keep their membership are the ones who've had bad experiences. The best we can do is try and rectify the situation, but sometimes even that isn't enough.
      February 25, 2024 at 9:59 pm -
    Ethan K
    Hey Neha, it seems like you have established a pretty good way of retaining memberships by freezing people's accounts and by giving credits each time a customer is charge. However, I'm interested in your advertising strategy for gaining people to sign up for memberships. Considering this a luxury spa, would customers receive some extra bonus for signing up such as receiving some credit to incentivize customers to sign up? Additionally, is there a certain plan for what to do during quiet seasons when there's not many customers compared to more busy seasons?
    February 24, 2024 at 2:52 pm -
    eric_p
    Hi Neha! I love the idea that frequently educating clients can result in a mutually satisfactory result! Do you think there is another "link in the chain" that needs to do a better job at educating clients before they consider cancelling a service?
    February 26, 2024 at 5:56 am -
      neha_k
      Hi Eric! The main people who need to make sure our clients our properly educated are the spa associates (front desk). Since we're the people the client comes to when wanting to cancel, it's our job to make sure they know about all other options first before going ahead with canceling.
      February 26, 2024 at 12:22 pm -
    Covalciuc
    1. How long are credits good for if you don't cancel? 2. How many credits do premium services require?
    February 26, 2024 at 7:14 am -
      neha_k
      1. After canceling, you get charged one final payment which also gets you one last credit, and then 60 days after that payment to use up all remaining credits. 2. It depends on the price of the premium services. A credit equals about $80 in monetary value.
      February 26, 2024 at 12:25 pm -
    O F
    Hey Neha, in regards to freezing a client's membership, how many times can one client freeze their membership over the course of their time at the spa? Are there any set guidelines for freezing the membership, so that clients don't freeze them unnecessarily? Also, to earn a credit do clients need to pay for a service or just pay for the membership fee that month? Overall this is a great post packed with lots of detail, so great job.
    February 26, 2024 at 7:23 am -
      neha_k
      Hi! A client can freeze for three months at a time. If they want to continue freezing past that period, they have to pay one month's membership fee, then they can resume freezing for another three months. There are no set guidelines, it's mainly a judgment call of the front desk. If we think a client is overusing that benefit, we can start charging them a $10 freeze fee each month. As long as they pay the membership fee that month, they earn a credit that covers their service.
      February 26, 2024 at 12:33 pm -
    srivarun_v
    Hey Neha nice post. I was wondering what other methods you could employ to retain membership retention, and if policies are stated for people where it's easy for them to access.
    February 26, 2024 at 12:00 pm -
      neha_k
      When they sign up, we give them a brief overview of their benefits. After that, we send them home with the membership agreement they signed and a pamphlet reiterating all the membership benefits.
      February 26, 2024 at 12:36 pm -

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