the next generation of kpis
DESCRIPTION
Presented by Dan Chandre at ISPA Conference & Expo 2011, an introduction to the Next Generation of KPIs, which help you track how technology trends are impacting your business.TRANSCRIPT
with Dan Chandre
The Next Generation of KPIs
with Dan Chandre,Vice President, OperationsGramercyOne
with Dan Chandre
Agenda
• Introduction
• Current Landscape of KPIs
• Change in Consumer Behavior
• Impact on the Spa Industry
• 5 New KPIs for the Spa Industry
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What Am I Doing Here?
• Insight into spa business
• Aggregated data
• We see behavioral trends emerge
• Perspective
with Dan Chandre
Perspective
• 700,000+ transactions per month
• More than $1.25MM per day
• Over 85,000 online bookings per month
• 33%+ of online bookings 8pm-8am
• Approx 1,350 of our clients have run daily deals
with Dan Chandre
TraditionalSpa Analysis
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What is a KPI (Key Performance Indicator)?
• A set of quantifiable measures to compare performance in terms of meeting strategic and operational goals
• According to Intelligent Spas, KPIs enable a spa to
measure and monitor its business and financial performance
• Spa benchmarking measures aspects of a spa and compares these against the industry average
• Measuring KPIs allow business owners and managers to make informed decisions
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KPI Examples
Source: http://www.hoteliermiddleeast.com/8378-dead-sea-spas-under-utilised-claims-survey/
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Key KPIs
• Revenue Per Sq Ft
• Hotel Capture Rate
• Revenue Per Occupied Room (RevPOR)
• Treatments per Guest
• Retail Success/Retail Capture Rate
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What Data is Used to Measure Success?
• Room
• Employee
• Service
• Retail
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Are We Measuring the Correct Data?
• Only for operational efficiency
• Current KPIs provide analysis of performance once guest has arrived
• Does not indicate customer acquisition performance
• Ignores current consumer trends mitigating purchase decisions
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Times Have Changed
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• Social commerce
• Online to Offline (O2O) commerce
• SMBs harnessing cloud computing power
• Selling of services next frontier
Why Re-Evaluate How We Measure Success?
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Why Re-Evaluate How We Measure Success?
• Global e-commerce sales growing 19% per year
• Worldwide retail web sales $1TN by 2013
• 45% of consumers follow brands on social networks
to receive discounts & special offers
• Brand followers are 52% more likely than the average adult to
download a web coupon and 9% more likely to shop online
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Why Re-Evaluate How We Measure Success?
• Half a BILLION people accessed mobile Internet in 2009
• 350,000,000+ mobile Facebook users
• Mobile commerce growth:$3B in 2010 to $31B in 2016
• Social commerce growing 93% per year to $14B by 2015
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Why Re-Evaluate How We Measure Success?
We have seen:• 2010 - 1.0% of all customer initiated Booker reservations
were through mobile devices• 2011 - 3.3% of customer initiated Booker reservations
YTD through mobile devices - 230% growth.
An example of a client who implemented a mobile booking app:• August – before app - 6.8% of all
customer initiated bookings were mobile• October – with app - 19.8% of all
customer initiated bookings were mobile• With a dedicated app - 40% of all
appointments are customer initiated
with Dan Chandre
Why Re-Evaluate How We Measure Success?
with Dan Chandre
Why Re-Evaluate How We Measure Success?
with Dan Chandre
Why Re-Evaluate How We Measure Success?
• Emergence of mobile commerce
• Real-time offers via mobile advertising
• Location based services & the new LAST MILE
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Why Re-Evaluate How We Measure Success?
How consumers use Smartphones to shop in 2010:
60.2% Browse for gifts50.7% Checked store hours or locations32.5% Received text messages and offers34.6% Read product reviews26.0% Made purchases
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Why Re-Evaluate How We Measure Success?
• 33,000+ deals in Sept’ in US
• 38% of deal buyers already loyal to brand
• Only 20% of customers become repeat business
• Over 40% of our clients have run multiple deals
• Health, Wellness & Beauty is the 2nd largest sector for daily and searchable deals
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New Generationof Evaluation
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Goal of The Next Generation of Evaluation
• To understand the relevance of changes in consumer behavior
• Measure your success as a marketer, not just an operator
• Incorporate the growth of O2O commerce
• Track success at capitalizing on these trends
• Identify opportunities for greater capture rate of O2O commerce
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% of Customer Initiated Bookings
• Calculates customer initiated bookings versus traditional bookings requiring reservationist input
• Illustrates impact of online marketing effortsdriving traffic to online booking
• Additional metrics to track• % of online bookings net new customers• % of online bookings outside of operating hours
Year 2008 2009 2010 2011Booking % 3.9% 6.1% 10.1% 11.5%
1
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Online Bookings by Channel
• % of online bookings generated from:•Website•Mobile• Social media• Deal sites/3rd parties• Promotion Specific
• Clear sign of marketing channel effectiveness• Add breakdown of new versus returning client
2
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Retention % by Online Channel
• Determine your retention period(90 days typical retention period)
• Calculate % of clients that returnduring that retention period
• Segment by online channel• Further segment by new versus returning
3
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Final Appointment Factor by Channel
Value of final ticket at check outOriginal booking value
• Tracks the true value of an individual reservation by channel
• Recognizes the ability to up-sell and add-on
• Defines the likelihood of additionalsales opportunity by channel
• If discounting, use discounted value
4
=
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Future Value Factor per Channel
• Comparative ROI across channel
• POS data is critical to accurate analysis
• Provides projected ROI that can easily be weighed against channel spend
• Understanding true customer value
5Final Appointment
FactorX Retention
Percentage=
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Goal of The Next Generation of Evaluation
• How good is your spa at capturing the online consumer?
• New KPIs should be used in conjunction with traditional KPIs
• Are your O2O marketing efforts effective across all channels? Including mobile?
• Target channels resulting in the highest Future Value Factor
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Tracking
• Weekly is useful, daily is ideal
• Comparative Analysis
• Target effective channels
• Improve marketing efforts towards less-effective channels
• Identify opportunities for greater capture rate of O2O commerce
