Selling value, not price

I had an interesting Twitter exchange this morning with Milk and Honey Spa in Austin, who recently started following me.

Have you run a Groupon or daily deal?

No. The economics have never worked out and risk to brand has been too great.

When you say brand risk, what are you referring to?

We create a luxury experience and hire and train employees to deliver that experience. That’s not compatible with discounting

Would you consider Groupon if they gave you 100% of the revenue and you just had discount?

Never say never, but probably not. We tend not to discount up front, but offer a rewards program to regular customers.

See http://ow.ly/5vIEi for our reward program details. Regular customers get nice discounts for certain behaviors and actions

That’s terrific! Did you design rewards program yourself or you model after someone?

We designed it ourselves, but within the parameters of the spa management software that we use (Millennium by Harms)

How many times a week are you called by deal companies?

It’s slowing down a bit, but about 2-3 times per week.

Do you do spafinder?

We did a couple of years ago, but stopped. We prefer to manage our customer experience and not cede it to other vendors.

With an elegantly designed Web site, strong Facebook and Twitter presences, Milk and Honey is doing a lot of things right. They are posting availability, introducing customers to their staff, talking about events and interacting with customers. The pictures on their Facebook page not only show off the business, they include examples of community involvement.

The structure of the rewards program incents a lot of desirable behaviors:

  • Referring friends and family to the spa.
  • Pre-booking appointments.
  • Trying out new services.

Other businesses would do well to emulate Milk and Honey’s practices. Next time I’m in Austin, I’ll have to go for a massage.

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About Rakesh Agrawal

Rakesh Agrawal is CEO of redesign | mobile. Previously, he launched local and mobile products for Microsoft and AOL. His personal blog is at http://blog.agrawals.org and tweets at @rakeshlobster.
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2 Responses to Selling value, not price

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