Hand and Stone grew from 20 locations in 2009 to 170 locations today in 21 states and Canada. The company opened 25 new locations so far this year and plans to open another 25 by year’s end. “We want to establish our Hand and Stone brand in each of our core markets,” Leff says. “We want consistent growth and will really target our growth to have a profitable, successful franchisees that retain customers for the long-term.”
To be conveniently located for its clients, Hand and Stone locations can be found in local shopping centers. “Once they walk through the door they experience a luxury spa environment with as good – and many have commented a better – massage or facial service,” Leff says. “It’s the whole experience that you get in a day spa, but at an affordable price and convenient location in a place they trust for shopping. That’s the wow factor.”
The company’s main demographic is clients with a $65,000 median household income, Leff says. “Our clients are Target shoppers and those who shop at other ‘big-box’ national chains,” he adds. Clients can receive a massage, facial and wax-free hair removal services at any Hand and Stone location seven days per week, 52 weeks per year.
Hand and Stone altered its business model in 2010 to include facials and skincare, from which 25 percent of its total revenue is generated. “It’s one of our fastest growing segments that we will be focusing on moving forward,” Leff notes.
Hand and Stone’s exceptional customer service is what sets it apart in the industry, Leff believes. For example, massage therapists and estheticians are able to customize any service to meet the clients’ needs. “I think people have low expectations of customer service and are blown away when they come in by how they are greeted and treated through the service and through the checkout process,” he says. “We offer a very high-touch, high-level customer experience.”
To provide this level of service, the company looks for people and partners with the “right” attitudes and personalities to fit its culture. Hand and Stone boasts 5,000 employees at the franchise level with 30 to 35 people staffed at each location and 33 people on staff at its corporate headquarters.
Hand and Stone provides all necessary training to its spa associate staff and managers, and although its professional staff of massage therapists and estheticians are licensed by the state, they too are trained in the company’s protocols and processes. “We have a really customer-centric, caring culture,” Leff says. “Our owners care about their customers and connect with them on a personal level and I think that’s one of the reasons we have such high-quality spas.”
Finding the right people to staff Hand and Stone locations is a challenge, but Leff says the company overcomes this by adopting a number of recruiting avenues. For example, the company hires through traditional online channels, but also networks through social media, entices professionals by offering free continuing education programs for credits towards state licenses, and partners with area schools to hire recent graduates. “We have to be innovative and leave no source untapped to find professionals,” he notes.
Technology has been an asset for Hand and Stone, as Leff believes it has leveled the playing field and allowed a smaller company such as itself to compete with larger day spas. The company launched a new POS system that is integrated with its CRM program, so marketing is customized to each customer. “We can send customized messages via email marketing that we couldn’t do in the past and it has been a great source for us,” he explains. “For businesses like ours that are based on membership, it’s important to present new programs and offers to members, but also non-members who have visited us and provided an email.”
The company’s website, www.handandstone.com, has also been upgraded to be used as a tool by its clients. The site is an added convenience for patrons as it allows them access to amenities such as purchasing gift cards and making appointments that are booked directly into the company’s POS system. “We have about 30 locations on this system now where you can log in and select a therapist, time and the service you want,” Leff explains. “It’s not a request, it’s an immediate confirmation that is synced with our POS system that creates ease of use for our customers.”
Although its customer service, affordable prices and convenient locations are all reasons to return, Hand and Stone clients remain loyal mostly because of its Lifestyle Program, Leff says. “It offers a very discounted rate for a massage or facial each month,” he explains.
Leff says he sees the spa industry only continuing to grow because people are incorporating spas into their lifestyles. “I read a statistic that said that five years ago only 5 percent of therapists and estheticians worked at some type of national chain and today it’s 10 percent,” Leff says.
The spa industry generated $14.7 billion in 2013, according to the International Spa Association. The association confirms that the industry is continuing to grow as the number of spa locations increased from 4,140 locations in 1999 to 20,600 in 2009; the number of spa visits grew from 90.7 million in 1999 to 143 million in 2009; and the amount of spa revenue grew from $5 billion in 1999 to $12.3 billion in 2009. “I think people have accepted that massage and facials are part of the health and wellness lifestyle,” Leff says.