Beauty Services: Service Development Lifecycle
Overview:
Manicube (now AtWork by Red Door) was a Next Generation Commerce Startup founded in 2013 by two HBS graduates. It offered in office beauty services for busy professionals and it leveraged technology (scheduling, booking, payments, other task automation) to reach scale. At the time of the acquisition by Red Door Spa in November 2015, Manicube was successfully operating under a B2B2C model that was serving over 250 corporate clients and about 50,000 of their employees across 4 markets.
Strategy:
Manicube was venture backed (Series A from Bain Capital in April 2014) and the strategy evolved around reaching scale via a rapid expansion. In order to raise more venture money we needed to prove that we can not only expand vertically (quickly sell new clients in existing markets) but that we can also efficiently expand operations in new markets. To secure Series B funding we had to reach certain #Milestones that were tied to new market expansion and REVENUE (which I'm covering here).
What can we do to increase revenue?
To understand how we can increase revenue we have to look at its components. What's REVENUE made out of?
REVENUE= $Price x Units sold
or
Total REVENUE= Service Revenue + Product Revenue (if you have any products that make sense selling)
To increase Total Revenue, we considered the following:
Increase APS (average price per service)
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Introduce More Services with higher price points
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Introduce add-on’s to new and existing services
My job !
and the stuff i'm talking about in this post
Increase # Services Sold
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Acquire more clients sites
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Increase utilization at existing client sites (convince more people to use our services at each client site)
Sell Products
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Sell physical products that complement the services offered
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Develop and sell your own products
My job again!
You can read more about what I did to increase this hERE
OK! So, MORE SERVICES! But what services and how we decide which services to test?
1. We asked our customers! All our development efforts (services OR software) started with the customer at the epicenter.
We gathered data from various sources :customer surveys, customer interviews, Service Provider (customer related) intelligence, HR manager feedback, sales calls etc.
2. We then looked at what services made the most sense to develop and test.
Once we had a list of potential services in mind we aimed to answer the following questions:
A.Can we do it ? As in: is it doable from a time, protocol, supplies, Service Provider ergonomics, hygiene standpoint.
B. Should we do it? Is the ROI on this service attractive?
How did we think about ROI?
Gross margins + Effort + Potential to introduce new customers to our brand
How we structured our new service tests.
You may have noticed by now that we didn't just launched services nationwide. We tested them first in one, maybe 2 markets for a 12 week period and then we made a decision on whether the service should be rolled our nationally. We ran these experiments because the risk and cost associated with a national launch are very high.
1.Test Structure:
Week 1-3
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Stakeholder Identification
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Stakeholder Communication
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Protocol development
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Service provider training
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Supply acquisition
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Pricing model
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Customer attitude research
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Client site sampling
Week 4- 15
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Weekly calls with Client Management & Operations team to synthesize learning and refine test conditions
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Weekly calls with Service Providers, HR managers and Customers to gather qualitative feedback on service.
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Weekly progress report to all stakeholders (metrics, learnings/insights, original test modifications based on insights)