Vertical Case Study: SpaBoom Web Enables Local Spas

Spas have always been a leading advertising category for city guides and other local sites. In many cases, they are virtually the only breakthrough for “services.” The rest may be dominated by restaurants and bars.

But the spas themselves have more upside to explore from online marketing. Gift certificates are especially hot. Spa Web site development and targeted e-mail management are compelling add-ons.

Working with them is SpaBoom, a two-and-a-half-year-old, 10-person company based in Albuquerque, N.M., that started with a gift certificate solution, winning its first 1,000 customers via direct mail and spa industry meetings. Since then, it has been providing the spa community with a growing range of services, such as a spa directory. It has also developed a partnership with Millennium, a leading spa software firm, and begun exploring local media and directory ties. It now has 2,000 spas on board.

SpaBoom VP Seth Gardenswartz notes that it is important to appreciate that the spa business has many elements. There are day spas, vacation spas, med spas and salon spas. And then there are subsegments, too. Med spas, for instance, include therapeutic, holistic and aromatherapy spas (or services).

Whatever their specialty, spas tend to have a strong local brand. What is unique about them is that treatments are often given as gifts, especially around the holidays. Roughly 30 percent of all spa revenues are gifts.

Many of the gift givers, especially men, don’t really want to go to the spa to buy a certificate, notes Gardenswartz. And spa treatments are often gifted from out of the market. Both of these characteristics bode well for e-commerce transactions.

The SpaBoom offer to spas is a $99 set-up fee, and then 5 percent of the gift certificate value. “We don’t pitch it to the spas as advertising,” says Gardenswartz. “We are delivering cash to them. There is a nice cash flow.”

Part of the gift certificate business is participation in “Spa Emergency,” a national directory of spa gift certificates that often drives last-minute sales after mail deadlines have passed. For instance, $2 million of the company’s $5.4 million gross in December came after Dec. 20. “It is a private label e-commerce presence,” says Gardenswartz.

While the company’s core business is gift certificates, it also provides free e-mail marketing tools as a bonus for signing up. E-mail is critical to keep in touch with customers, and to drive online sales for gift-giving occasions, Gardenswartz notes.

The company has also branched off into Web site development. Most spas could use an improved Web site, says Gardenswartz. SpaBoom’s Dynamic Spa Websites are provided for $39.95 per month and have a range of templates and full- or self-service options.

While SpaBoom still sees plenty of new opportunity in the spa space, it is beginning to investigate additional segments. Recently, it also began working with restaurants.