Beating The Odds

Aug 9th, 2013

Kneaded Relief’s Prairie Walkway

Fortitude and a winning working environment have paid off for the owners of Kneaded Relief Day Spa & Wellness.
It was December of 1997, and the day spa industry was on the precipice of explosive growth. Even so, Nichol Schumacher’s and Duke Harvey’s purchase of a 1,400-square-foot day spa in the heart of Madison, Wisconsin, could only be considered a gamble. A 23-year-old spa manager, Schumacher had been dating Harvey for only two months. “Neither of us was really looking to purchase a spa,” she remembers. “But Duke wanted a fitness studio, and I knew that massage goes hand-in-hand with fitness training. So, when Kneaded Relief came up for sale, and our philosophies and outlooks matched up so well, we said, ‘Let’s do this!’”

In the 14 years since their somewhat naïve beginning, Schumacher and Harvey have built a day spa business three times its original size. Kneaded Relief Day Spa & Wellness routinely wins local awards, effectively networks within its community, upholds a steadfast focus on wellness, and enjoys a committed staff and a loyal customer base. DAYSPA caught up with Schumacher to find out the secrets behind this Midwestern success story. —Tracy Morin

A bath of natural light awaits clients who visit the spa’s relaxation retreat.

Early Losses

Harvey and Schumacher purchased Kneaded Relief knowing they’d have to make some fast changes: The previous owner had established a strictly clinical setting, used independent contractors and hired no front desk staff—choices that didn’t match the couple’s notion of what a day spa should be. They immediately set to work, expanding the esthetics side of the business and adding nail-care services. Harvey established personal training services. The pair also made cosmetic changes, overhauling the dated interior with new paint and carpet.

In the early weeks, robust gift certificate sales seemed to indicate that the new owners of Kneaded Relief had plenty of cash to spare, but by March, “We hit a wall,” Schumacher recalls. “We had to go back to the bank and ask for more remodeling money because we’d tapped into our gift certificate account. After that, we learned to not treat gift certificates as cash in the bank!”

Gift certificates also posed a challenge during a promotional push that went awry. Kneaded Relief sold gift certificates at 10-year-old prices on the 10th of every month—meaning that a one-hour massage cost $48. This was long before the days of Groupon, back when $48 massages were almost unheard of. With so many customers redeeming the certificates at such a deep discount, the spa quickly experienced a slump. “With our huge staff—all of whom receive a guaranteed hourly wage—we couldn’t maintain that popular deal,” Schumacher says. “That was a big lesson learned.”

Kneaded Relief’s fitness room

Despite their early mistakes, Schumacher and Harvey managed to establish a solid brand and business in the Madison location—so much so that it wasn’t long before they were looking to expand. Thus began the search for land on which to build their dream spa. However, by the time Kneaded Relief opened the doors of its new 5,300-square-foot space in Fitchburg, Wisconsin, the move had already taken its toll in terms of clients and staff. Although many of the spa’s clients already lived in Fitchburg, a modest-sized town about 10 miles south of the previous location, those based in the state capital weren’t so keen on the change. “Even though Madison is only 15 minutes away, some clients didn’t want to make the drive,” says Schumacher.

And clients weren’t all the couple lost. Some staff didn’t want to make the commute, either. “Or they wanted more freedom, or a more intimate setting,” recalls Schumacher. The move and its aftermath were to deliver one of the couple’s most valuable lessons: “Not everyone is going to mesh in your culture, and that’s okay,” concludes the co-owner. “I say that all turnover is good turnover.”

Stacking the Deck

High staff turnover isn’t a problem at Kneaded Relief these days, thanks to management’s commitment to quality hiring and training, and an envy-inducing benefits package. Schumacher believes in an intensive customer-service focus, and works with staff to establish the highest standards in that regard. To that end, training for all employees involves working the front desk and learning to determine clients’ needs. It also entails receiving services from every other service provider on staff to better equip employees to make specific recommendations for clients. During the first three months of employment, guest surveys help managers and owners assess each employee’s performance.

Kneaded Relief’s luxurious dual steam room (left) and a hot stone massage (right)

Once employed, staff members receive a guaranteed hourly wage and the opportunity to earn bonuses based on monthly service and retail sales goals. Schumacher also looks at the average revenue per hour in each department. Management spells out specific performance goals for each service provider. For an employee to receive a raise, she must hit her pre-booking, retention, average ticket and average retail goals. “If we hit our goals, any staff member who qualifies receives a bonus,” explains Schumacher. “We set up our business so that if we’re making a profit, we’re going to give some of that back to our staff.”

Schumacher picked up some of her business acumen at Strategies Business Academy, an organization in Centerbrook, Connecticut, that teaches salon and spa owners to operate successfully. Schumacher and Harvey both achieved the Master level at the academy, with Schumacher going a step beyond to become a certified Strategies coach. Through the process, she learned to appreciate the need to create a “no-compromise culture with team-based pay.” In turn, employees reward her efforts with impressive loyalty to the spa and increased dedication to clients.

Know When to Hold ‘Em

A keen understanding of its clientele has helped Kneaded Relief receive Madison Magazine’s “Best of Madison” title in 2010 and 2011. Although the spa marries two seemingly incompatible philosophies—Midwestern principles and an intense focus on wellness—Schumacher claims that given the local culture, the two are actually in perfect harmony. “The Madison area is unique in that it’s so wellness-oriented. Even when it’s 10 degrees below zero, people are out biking!” she laughs. “They’re very into fitness and health, and with the University of Wisconsin and state capital being here, there’s a lot of disposable income. It’s like a big-city environment in a small town.”

The natural beauty of the grounds at Kneaded Relief adds a transporting element for guests.

All spa guests, who run the gamut from U.S. senators to stay-at-home moms, are treated to top-notch treatments and customer service, and receive perks for their loyalty. Relief Points, redeemable for services, are automatically accumulated by every guest and are also rewarded to clients for pre-booking, referrals and more. Clients who pay $50 to join the My T.R.E.A.T. (an acronym for “the relief everyone appreciates and treasures”) program receive 10% back in points for every dollar spent, plus a $100-value coupon book and a water bottle. (If a client brings the bottle in to her appointment, she gets $1 off any service—an incentive for clients to carry water with them, and to keep the spa in mind!)

Clients are especially appreciative of the spa’s dedication to community and worthwhile causes. Kneaded Relief barters with other local businesses, and often participates in silent auctions and community drives (such as collecting cell phones for a local rape crisis center). The spa won the Dane County Best in Business Award (the first spa to do so), for which a business must be nominated, and which is judged on three merits: profitability, contributions to the community and working environment for staff.

Many of the spa’s charitable efforts are directed toward the National Kidney Foundation (NKF), a tribute to a staff member who died from kidney disease. Recently, the spa initiated a Girls Night Out promotion where, for a $100 donation to the Foundation, 15 guests received two hours of service samplings (including manicures, facials and massages), food and discussion with an NKF representative. The event was so successful, Schumacher now plans to hold one every quarter.

At a time when the survival, much less the stellar success, of a single-location day spa is often brought into question, Kneaded Relief stands out as a glowing accomplishment. Despite early stumbles, the spa continues to provide much-needed employment and stress relief to residents in and around Madison. “It’s amazing how many people we’ve employed and trained to be great therapists, who are still out there, even if they’re working somewhere else,” Schumacher reflects. “And we love all of the clients we’ve helped with our services—because it’s not about the money, it’s about the well-being of the guests. Ultimately, we just want to be a great place for people to work, and a great place for people to come to and then leave from—feeling better.”

Tracy Morin is a freelance writer and editor based in Oxford, Mississippi.

Website: kneadedreliefdayspa.com
Open since: December 1997 (2007 at new location)
Average ticket: $80
Size: 5,300 square feet
Facilities: 4 massage rooms; 3 esthetics rooms, couple’s suite (aka Waterman Suite); 3 nail stations; 3 pedicure stations; dual steam; single steam; private whirlpool; wellness classroom; fitness studio; men’s and women’s locker room with showering facilities; call center; staff break room; retail area; reception area; relaxation retreat; management offices
Employees: 34, some with dual roles (1 manager; 6 estheticians; 5 nail technicians; 11 massage therapists; 2 personal trainers; 11 guest service representatives)
Popular treatments: Sixty Minute Relaxation Massage ($80), Full Facial ($85), Pedicure ($50)
Retail lines: Aloha Bay Candles, Bioelements, Blinc, Dreamtime, Justin Blair, Masada, Tei Fu, Tend Skin, Trillium, Zoya