Our big shout

photo1About two years ago we launched our appointment booking system and it has grown like wildfire since.  As I have described in earlier posts, Wahanda provides a free and powerful cloud based scheduling and management software to spas and salons which allows us to see their availability.  This in turn allows consumers to find and book their hair, mani/pedis, waxing, massage or facials online in just a few easy steps.  When we launched the service we had only a handful of businesses that were on the platform but today we have more than 5,000 business and we expect to double this in the next 5 months.  Businesses love the system because it lets them fill their diary exactly when they need.  Just as importantly, consumers love the convenience and the customer experience and our customer base grew largely through word of mouth (a net promoter score of +65 really does help).

A few months ago we felt it was time to start investing beyond our existing online marketing activities and we decided to launch a major new outdoor advertising campaign.  The campaign is initially focused in London and can be seen across the city on the tube, outdoor and on bus stops and will run for much of the summer.  Its hard to miss.

We have tried above-the-line campaigns before with mixed results so we went into this determined to make it work.  We were lucky to have met the very talented Flo Heiss who had recently left to start his own agency.  Flo is immensely talented and it was clear that he completely understood the brand and the proposition, and he clicked with us right away.  He suggested the tag line “Book Yourself Fabulous” and we loved it.  We wanted to capture that sense of confidence and happiness that someone feels when they feel good about themselves and this does it.

The harder thing was trying to find a way of communicating the brand and service, while cutting through the marketing clutter.  While the campaign is large by almost any measure, out marketing budgets can’t compete with the L’Oreal and Estee Lauder’s of the world.  We struggled with different types of photography for a long time until Flo suggested the use of this really talented illustrator, Malika Favre.  Her work was amazing — vibrant, modern, feminine, and original.  It captured our attention right away.  Of course, the hard thing about commissioning an illustration is that you never know what you are going to get in the end but the resulting three images from Malika were superb and communicated what we were looking for better than I could ever hope for.

Keep an eye out for the campaign when you are in London and let me know what you think.  In the meantime, Flo has also put together a great collection of images here.

 

 

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Why we turned off daily deals — A birthday message

Birthday FiveToday is the fifth anniversary of Wahanda.  While we officially launched six months later, it was Valentine’s day five years ago that we signed the incorporation papers and our first investment.  A lot has happened in those five years and we have grown tremendously over that period into the largest spa and salon site in Europe and like any five year old there are a few things that we have grown out of including, most noticeably, daily deals.

When we started Wahanda, our vision was to bring the spa and salon market online by making it bookable.   We realised that every other consumer vertical had sites that helped you book your services online but that for a number of reasons, the spa and salon market was still largely offline.  About 2 years into that journey, the Daily Deal phenomenon hit.  We saw that a big portion of Daily Deals being sold in the U.S. were health & beauty focused and since we were the largest marketplace for spa and salon services in the UK we were not going to let this go by without reacting.  We moved quickly and were the first to launch a daily deal product in the UK.

The initial daily deal period was fast paced and insanely competitive but it also helped build Wahanda and our profile in the market.  At the time it was a good offering for our consumer and we were careful to use it in a way that made sense for our merchant partners.  We built a large business in the area and were critically acclaimed for the quality of the work we did in the area. However, throughout this period we continued to build our vision of a spa & salon marketplace.  While many argued that Daily Deals “solved local” we argued that it was only one aspect and we continued to develop and grow our other parts of the business.

Specifically there were a number of elements of the Daily Deal model which we felt fell short of any true local marketplace:

  1. Push vs. Pull.  Daily deals are inherently an impulse or “push” purchase.  You get an email, you see a deal you can’t resist, you buy it.  But that is not how most of us buy our local services and especially not how we buy our health and beauty services.  If you need a haircut, you can’t sit and wait for a daily deal offering to show up in an email hoping it’s at a salon you like  — And, God forbid that you miss the email that day.  Chances are your hair will get very long and your roots will show waiting for the right deal.  What you really want is to be able to search (i.e., “Pull) for haircut near you at a place you like, at a price you like.
  2. Vouchers vs. Appointments.  Lets be honest, vouchers are a pain.  They make sense for a gift or if you want to “lock in the savings” but if you are buying for yourself, they just add an extra and unnecessary step to the purchase process.  Moreover,  you often buy the voucher and then forget about it.  Or even worse, you try to book yourself in but find that the merchant does not have the availability you want.  A true local marketplace lets you book the service at the exact time that you want when you book it.  You want to be able to wake up in the morning and say “I want a massage this evening at a great place near me” and be able to book it.  Afterall, what’s the point of buying something if you can’t have it when you want?
  3. Discounting vs. Yield Management.  Most local businesses are relatively small, have high fixed cost and low utilisation.  In the health & beauty market they’re 95% single owner operated and 85 % of their costs are fixed but they run at less than 50% occupancy — the biggest challenge these businesses face is utilisation. A discounted Daily Deal voucher floods a business with customers but it’s about the most crude form of yield management that anyone could come up with.  Unless you put A LOT of restrictions on the voucher, all those discount customers want to go at the same peak times as full paying customers and that simply isn’t what the business needs.  It leaves the business owner with one of two choices:  a) limit the amount of discount customers that you take at any given time which will upset the voucher holder or b) push out your full paying customers and hurt your profitability.  What business owners actually want is a way to fill the empty slots.  They want a steady stream of customers not a feast and then famine. They don’t want to have a blanket discount — they want to price the low demand periods more attractively than the higher demand periods.  If a customer wants to come in at an off peak time (e.g, Monday morning) they should pay less than if they come Saturday afternoon.  This is yield management and its very different from discounting.  Its a basic principle that has transformed hotels, flights and is starting to transform local services and a successful local market needs to give merchants the tools for doing just that.

So the whole time we were doing Daily Deals we were building a solution that did all of the above and gave consumers a better way to shop for their health and beauty services.  What we built was a site that did the following:

Discovery: enables consumers to search across thousands of  salons and spas near them whenever they need.

Comparison: read honest reviews, compare tens of thousands of services from full price to discounted and check availability.

Booking: book the exact service you want on the day you want and at the time you want.

As we approached our 5th anniversary, it became increasingly clear that we were maturing and that with over 1.5 million consumers per month coming through the site our transformation to full marketplace was complete.  Our core business had long surpassed the Daily Deal offering, our suppliers loved the new offering and consumers were happier buying what they wanted when they wanted.  So, like child needs to move on from using a dummy, comfort blankets and training wheels last October we turned off Daily Deals for good.  It felt great to grow-up a bit.

Happy birthday Wahanda.  I am excited about what the next 5 years will bring us.

Our lastminute.com partnership – building the largest health and beauty marketplace

A while back, Wahanda quietly launched our new white-label partnership with lastminute.com.  Its now been over a month since we launched the partnership and we can now start to understand what the impact has been on the health & beauty marketplace.

As many of you reading this will know, I used to work at lastminute.com so this is a discussion that has been in the works for a while but it took a while to come to fruition. The deal is pretty straight forward.  Essentially, we provide a whitelabel service of the spa category on lastminute.com  (http://spa.lastminute.com) which includes all the technology and the offers.  lastminute.com provides the marketing and consumers which never really know that the service is being provided by Wahanda.

The deal made a lot of sense for lastminute.com as their technology platform was not optimised for the spa category and they had a limited amount of resources that they could allocate to it.  In addition, our inventory of offers and availability was considerably larger than theirs as we had made a very sizeable investment to build a national sales team.   For us, we debated at length whether the partnership made sense as it does enable a competitor, however ultimately, we decided to go for it as our goal is to sell as much for our suppliers as possible and overnight, this would create the single largest health & beauty marketplace in Europe.

As I mentioned, its been a bit over a month since we launched and the feedback from suppliers has been tremendous. We have seem a real swell in inbound activity from suppliers who want to appear on Wahanda and we have doubled the value of transactions passing through our marketplace.  Best of all, our supplier are seeing the benefit with no additional work or hassle:

  • They use one easy to use extranet system
  • Any offers automatically appear on both sites
  • Only one point of contact and account manager to speak to
  • One contract and commission structure
  • Only one point of financial reconciliation

The partnership has real benefits for consumers as well.  Of course, lastminute.com customer get an entirely new shopping process, better search and reviews, but all consumers (including ours) get:

  • Bigger range of suppliers
  • More unbeatable deals and offers
  • Better inventory and availability

The team here has worked very hard to ensure that the partnership was a success but lastminute.com has also been a great partner for us and we look forward to many successful years ahead working together to grow the health & beauty market for everyone.

AdWords in Google type-ahead?

This one really surprised me.  I was searching for a company of a friend of mine (http://www.travelintelligence.com/) and had typed in “Travel Intel” when the type-ahead gave me what looked like a AdWord. Curious, I clicked on it and sure enough it went straight through to the site and never gave me a SERP (search result page) for Google.

Adwords in Google type ahead

I noticed recently that Google has made some changes to the way type ahead works in a number of places but this was the first time I had seen this.  In fact, I tested it on a couple of other travel brand names and got the same thing.  Not sure if Google is charging for the keyword as they do a normal one but interested to learn more.

What’s wrong with newspapers

It just doesn't add up

It just doesn't add up

I went by my favourite newsstand on Saturday to pick up the weekend papers and had a chat with the nice lady who is always there.  She told me that my weekend FT had gone up in price to £2.50.  Then, she tells me that the weekday issue was going to £2.00 as of Monday.  Sensing my obvious sense of disapproval, the sweet newsstand lady shakes her head in commiseration and tells me that she thinks the FT is trying to simply shift sales from the newstand to subscriptions and online…

If only it was that logical.

Even though I live and breath internet media, until less than a year ago, I used to buy the FT at newsstands 3-4 days per week.  But as the price went from £1 to £1.80 in just a three years I found it completely unjustifiable.  At £2.00 it’s robbery and certainly bears no relationship with financial climate or the prevailing rate of inflation.

So, perhaps I am one of those quaint newsstand customers who is being intentionally squeezed into a subscription… buy a subscription, you say.  Well that is where the problem really begins.  The price of an FT home subscription in central london is £416.  That’s a lot of money but its a complete farce when you realise that the EXACT SAME service would only cost me $348 in New York — that’s £234!  In fact I can get two years of FT subscription in the US for the price of one year subscription here in London and still have enough change left over to subscribe to a bunch of magazines.  There is no justification for that especially as so much of the cost of producing that particular newspaper is in the UK.

It gets worse.  The website only subscription with all the same content as the paper cost £207.48 which is more or less the same price as the US home delivery option.  Think about that: no paper, no delivery, no fancy plastic wrapping and the FT wants me to pay the same amount for a web subscription as I would get for the paper delivery in NYC?  If the guys at the FT are listening, I have some news for you:  your online product isn’t worth what you think it is.

I am sure someone out there will argue that it costs a lot to produce this content and that its worthwhile paying for it.  That’s true, but its important to remember that media is a competitive industry.  I have a choice of where I can get my news and information and as Fred Wilson pointed out, there is someone else out there willing to fill the space and I don’t mean just the internet.

My friend Toby Constantine at the media advisory group Market Evolution recently pointed out that the FT’s pricing model makes it more expensive than SKY.  Think about that for a second.  A subscription to the FT costs more than a subscription to Sky which includes hundreds of channels, movies and throws in internet access and VOIP calling as well!  It makes no sense.  The newspaper industry is completely out of touch with reality.

I often hear people hold up the FT as one of the success stories in the newspaper industry — they have great content, a loyal customer base and will survive the transition to digital.  If that is the case, I think the newspaper industry is in more trouble than they know.

What I’m getting this valentine’s day

The economy seems to be getting worse by the moment and like many people, my wife and I have cut out spending in a number of places but one thing that we are not cutting is on our wellbeing.  We have kept up our gym memberships (in fact I just signed-up for a new one), I still go for my yoga lesson and I still have my weekly tennis lesson.  The fact of the matter is that I would rather cut down on restaurants than to cut back on the things that keep me happy and healthy.

The interesting thing is that I don’t think we are alone.  Almost everyone I speak to is saying the same thing and many of the businesses, therapists and trainers that we speak to at Wahanda are saying that they are actually remaining quite busy through this period.  It seems that in this recession people may lose a lot of money but they don’t want to lose their health.

Which brings us to Valentine’s day.  I have never been a huge fan of Valentine’s day and the drive for mass romance — even during boom years I hated overpaying at restaurants filled with other couples.  So this year, I am taking my new credit crunch spending priorities and skipping the restaurant and simply booking a massage with my wife at one of our favourite local spas.

If you are worried about not spending too much Wahanda has some great spa deals and exclusive offers which are just perfect for Valentine’s Day.