When Chicago native Marti Schoenberg started working in Manhattan spas in the late 1990s, she was struck by what she saw as a lack of real customer service. She also noted how high the staff turnover seemed to be. This, on top of her distaste for the constant hard-selling techniques — this after all, was supposed to be a time of relaxation for clients — convinced her that it was time for her and her husband, Bruce, to go into the spa business for themselves. Bruce, with his strong background in the event-marketing and trade-show industry, took care of marketing, advertising and business operations, while Marti focused on developing services and hiring staff.
Their goal was to create a well- managed spa with top-shelf customer service and long-term, quality employees. Their first Oasis spa opened in Union Square in 1998, followed by a second location on Park Avenue, another at the Affinia Dumont Hotel and a fourth location in 2004 at the JetBlue Terminal at JFK Airport. The spas quickly garnered the attention of the press (New York magazine, Vogue, Allure and GQ, among others) and earned Oasis the title of Day Spa of the Year in 2004 in DaySpa magazine. Is the pampering and relaxation business paying off? Last year, the privately held company, with a staff of 260 (150 are full-time) reaped roughly $8 million in sales. The couple recently talked to Report editor Robert Levin about how they managed to create a successful enterprise in such a seemingly saturated industry as the spa business.
A Vision of Serenity
RL: Describe the process you used to analyze the opportunity of building the first spa. You saw that there was a need because the level of service in the other spas wasn’t as strong, but did you do any quantifiable analysis?
BRUCE: Yes. I think I went through six versions of a business plan, and it changed every time I learned something new. I knew nothing about the day spa industry. Marti had worked in the industry, but she didn’t know the nuts and bolts of it, and we didn’t know whether or not it could be profitable. And so we ran the focus groups to find out what people thought the needs were in New York. We also went around to different spas and looked at the different services they offered. We asked as many questions as we could and got as much information as we could from people about occupancy rates, what days were the busiest and what days were the slowest, et cetera. And then we got information on where the revenue sources came from. Then I looked at the gift certificate element of it and what percentages are redeemed and the cash flow that related to them. I did all that research, and realized it might be a worthwhile business. In business, everything is math. So I did the math and it looked good.
RL: Did your vision stay the same, or did it evolve over time?
BRUCE: Well, it evolved over time because we never envisioned what we have today, to be honest with you.
MARTI: What I saw everywhere I went was a big lack of service. The service is what drives this business, and you can’t ever let that fall through the cracks.
BRUCE: Marti was a massage therapist and she was the one that saw this industry emerging. She was the one that kept saying, “I can’t believe these places
are popular and they give lousy customer service.”
RL: Was that the idea — excellent customer service in spas?
MARTI: And affordability. We are one of the most competitively priced spas in the city.
RL: How do you break down your business in terms of revenue, between products and services?
BRUCE: We break it down into three areas: services, retail and gift certificate sales. Services are about 70 percent, and gift certificates are 20 percent, and retail’s 10.
RL: With respect to product, it’s very easy to get stuck in the trap of offering the same thing. How do you keep the offering fresh, and how do you keep knowing what people want?
MARTI: I think that you always have to keep things changing. We go to a lot
of trade shows. Some things we carry in all of the spas, but we also vary the products. Union Square is a cozier-type location, more homey. Park Avenue is a more sophisticated location. So I think that you have to pick your products accordingly. And then we keep changing them. Finally, if it doesn’t sell in one place, move it to another location.
Everyone’s a Salesperson
RL: How do you get the most out of your employees?
BRUCE: What it comes down to here is this: When you walk through our door as an employee, it’s show time. You’ve got a personal problem, don’t come to work because it’s infectious. If you’re having a bad day, then have your bad day somewhere else, because we’re in the business of wellness. If you’re not emitting that vibe to people, we are in trouble. We do a lot for our staff when they’ve had personal problems. But when they come to work, they’ve got to be happy. If they’re not going to be happy, stay home. Because we are, to a degree, in the business of making people relaxed — and happy.
Robert Levin is the Editor-in-Chief and Publisher of The New York Enterprise Report. Levin has extensive experience with midsize and small businesses, having previously held CEO, CFO, and COO positions with companies in several industries. He is also a contributor for The Huffington Post. Levin can be reached at email@example.com and (212) 307-6760.