The history of beauty procedures goes a long way back. In 40 BCE, Cleopatra was said to have an elaborate beauty routine featuring milk baths and honey masks. While male and female European monarchs — from Spain to Prussia — had their wigs regularly coffered and powdered by a special entourage of royal hairdressers.
Today, beauty services may be a bit different in nature, but they’ve become more popular and accessible than ever before. From a mustache trim to a 12-step skin rejuvenation ritual, online platforms like Treatwell connect consumers to local providers in one tap.
Treatwell (former Wahanda) is the biggest online booking platform for hair and beauty services in Europe. Their business model borrows from other “marketplace” startups like Airbnb, DoorDash, and Vinted — among others. However, Treatwell only connects business owners with beauty buffs, rather than delivering tangible services.
This business model made market expansion easy for Treatwell. Within 11 years, the company expanded to 11 European markets, and its estimated revenue is over $70.9 million per year. That’s an impressive result, but it still represents only a fraction of the total addressable market size in Europe. In the UK alone, the hairdressing and beauty treatment market is projected to hit $2.8bn by the end of 2022.
So what has Treatwell done right to grow using effective brand management and how is it navigating the pandemic-prompted market slump? We break down its story of success and the main elements of brand growth in this brand deep dive.
Treatwell’s Success Story
As the story goes, the concept for Treatwell was conceived during a dinner conversation back in 2008. Yet, the official story stalls just there — the Treatwell team is surprisingly hush-hush about its brand origin story. Though as marketers, we know that a strong brand identity is crucial for growth.
What Treatwell doesn’t lack is a charismatic founder, Lopo Champalimaud. Champalimaud is Lisbon-born and Montreal-raised. Yet, his entrepreneurial spirit took him all over the world. In 1994, Champalimaud co-founded one of the world’s first online market research companies in New York, USA. Then, he had launched the first online CRM product before he joined UK-based Lastminute.com in the early 2000s.
However, Champalimaud’s corporate tenure wasn’t long. In 2008, he decided to get back to his entrepreneurial roots and launched Wahanda together with several other seasoned executives including Salim Mitha of Yahoo! and Julian North of Lastminute.com and Travelocity.
The project was also backed by an equally high-profile roster of investors: Brent Hoberman, co-founder of Lastminute.com, Stefan Glaenzer, former executive chairman of Last.fm, and Ambient Sound Investments — a venture fund, launched by former Skype engineers.
In those early days, Champalimaud described his brand vision:
“Wahanda provides an exciting and unique way for wellness businesses and professionals to reach consumers. Its honest and user-friendly approach will allow visitors to search by criteria such as location, treatment or price when looking to make a booking or buy a gift voucher.”
The value proposition was simple and brilliant, as it tapped into the economies of scale. Wahanda enticed consumers with an easy way to research different service providers, compare treatments, and book an appointment in several clicks.
At the same time, salon owners — who had a little-to-no online presence at that time — could easily attract new clients without heavy marketing.
A lot of Wahanda’s early-day success came from the “Daily Deals” section — a Groupon-style website area with discounted beauty deals. This strategy allowed Wahanda to garner some decent traffic and users — but they struggled with retention. Both salon owners and their clients frequented multiple deals websites, so competing for their attention was hard. Deal-seeking customers weren’t bringing much revenue either.
Several years into the venture, Champalimaud decided to pivot. He admitted to “killing 80% of our business and doing a wholesale revamp of management and operations”. Champalimaud decided to focus more on generating new bookings for salons — and extending the scope of software tools for them. Eight months in, the revenue numbers were back to where they were — and then started climbing.
The series of operational changes got Wahanda close to its ultimate brand positioning of “Amazon for wellness” — the go-to destination all Europeans would use to book beauty services. By 2010, Wahanda had 10,000 venues listed globally (with 4,600 in the UK alone), ahead of US-based SpaFinder with just 6,000 venues at that time.
Their next stage of growth was acquisition led. Flush with cash, Wahanda acquired several regional competitors — with its two biggest buys being DACH-popular Salonmeister and Dutch Treatwell. Active M&A allowed the team to rapidly capture new markets — but it also left them with a branding dilemma. In the UK, customers knew them as Wahanda. Dutch folks were used to Treatwell, and in other markets, the team had local brand names too.
In 2016, Wahanda decided to rebrand as Treatwell — the name it goes by today. According to Champalimaud, Treatwell had already reached 10 million users by then, with an average of 20% of all bookings coming to the salons via their platform.
The team also worked hard to lure in more salon owners to the platform. They expanded their software toolkit with new attractive tools for appointment management, marketing, customer retention, and payments — a revenue stream they still rely on.
Despite some major successes, business growth was tough going at times. The team didn’t always have a perfect understanding of its main target audiences.
While women were its main targets, the management team was male. What’s worse — their decision-making was prone to gender stereotypes and misconceptions. "One (man) asked me how women would pay for their services online with credit cards because their husbands might find out what they're spending money on," Champalimaud recounted to Business Insider. Unsurprisingly, they failed to connect with women well.
So, eight years into the making, Treatwell decided to hire Inés Ures as the company’s CMO. An experienced brand marketer and product owner, Ures helped crystallize Treatwell’s new brand identity and market positioning.
In 2016, Treatwell unveiled its new brand image —- much of which is still part of its current identity. The team went for a vibrant ethos that is relatable across multiple countries. They also chose a somewhat gender-neutral brand tagline of “Book yourself fabulous” as another attempt to expand their inclusivity.
Source: Design Studio
Treatwell was growing steadily through the later 2010s by expertly building out an in-house marketing department — with a primary focus on digital marketing. Unlike other brands, Treatwell handles design, creative, programmatic ads, and performance marketing in-house.
The team only went for an external agency in 2018 when they wanted to launch an integrated TV, OOH, and online global marketing campaign. Still, most of Treatwell’s brand marketing efforts stayed concentrated in the digital lane.
Then rocky 2020 rolled in — salons had to close up shop and consumer spending on beauty services plummeted. Treatwell, too, fell short on cash as they mostly generated revenue from new client bookings and salon software subscriptions.
Yet, Treatwelll exhibited great perseverance. In 2020, they quickly released new tools for business owners — from a digital gift card generator to a series of finance help packages for salon owners. Similar to other brands like Square, they also focused on actively supporting their affected cohort of users through informational campaigns.
In mid-2020, Treatwell released some reassuring survey data stating that 74% of clients plan to return to their usual salon for their beauty treatments post-lockdown. Hair and beauty spending was also expected to remain the same or increase. To some extent, that was true — the beauty industry progressively bounced back in 2021. Though, some salon owners are still in recovery mode in 2022.
From a brand marketing perspective, Treatwell stayed quieter throughout 2021 (for understandable reasons). Their bright OOH advertising disappeared from high-traffic locations in London, Berlin, and Paris — and there were no new TV campaigns.
So, what’s next for Treatwell? How do they plan to get their game back in 2022? We’ve got some ideas and brand lessons to borrow.
3 Brand Lessons from Treatwell
Treatwell developed a memorable and vibrant customer-facing brand identity. And at the “backend”, they also have strong relationships and sleek tech for salon owners. What seems to be a major issue for Treatwell is competitive pressure.
Their profit margins are rather low (as is the case with other “marketplace” startups) — and profit erosion comes from different angles. Treatwell’s main value proposition of a more convenient salon booking experience still holds true. But today, many consumers are keen on doing their own online research —- while salons offer easy ways to book with them directly.
This has put Treatwell in a tough position. They need to work hard to entice and retain salon owners — plus maintain high brand awareness numbers among target audiences — to ensure a steady supply of new bookings.
Here’s how Treatwell has been maintaining this balancing act before and during the pandemic with takeaways other brands can apply, too.
1. Focus on Performance Marketing
Treatwell has spent a decade building out its in-house marketing department. Their main area of excellence is high-precision marketing campaigns. As one of the team members recounted in an interview, the team always placed a strong emphasis on data collection, analysis, and marketing attribution.
In 2018, they set out to create a unified attribution model that would allow them to monitor ad performance across every touchpoint and channel. This was no small task. Bit by bit, the team managed to piece together scattered data into a holistic picture of their brand marketing funnel.
With a clear view, Treatwell doubled down on digital ad spending across channels — and in-app marketing, in particular, using owned media assets.
Using AppsFlyer technology, Treatwell managed to ensure that all in-app activities driven by owned media were properly measured, tagged, and attributed to the right owned media channels and campaigns. They achieved impressive results:
Reduced user acquisition costs by 33%
Increased repeat customer revenue by 50%
Improved ROI of user acquisition by 30%
The Takeaways: High-quality marketing data is everything — and proper attribution goes a long way. Today, there are no shortage of tools to track different marketing KPIs, even those related to your brand funnel.
Using brand monitoring software like Latana can help you capture precise customer data on brand awareness, consideration, and preference — among other metrics — to further evaluate the effectiveness of your offline and online marketing campaigns.
2. Balance Profits vs Branding
Treatwell makes most of its revenue from transaction fees, charged to salon owners. To make that “cut” less painful for owners, the team developed a so-called smart pricing model with:
35% commission for new client bookings only
0% processing fee for any repeat or widget bookings for in-salon payments
2% processing fee for any repeat or widget bookings when they pre-pay online
They also charge monthly subscription fees for accessing their salon management and marketing tools. In particular, Treatwell’s tech toolkit lets salon owners set dynamic prices — issue special rates during off-peak hours and give discounts for last-minute bookings.
However, unlike other marketplaces, Treatwell left the power to control prices with the owners. They don’t auto-surcharge users as Uber does. It’s a smart move for building loyalty with salon owners. After all, dynamic price surging can damage the brand image of higher-end salons who would then complain to Treatwell (and stop using their services).
The Takeaway: Building brand equity is difficult for marketplace brands, as they need to strike a balance between profit generation, user satisfaction, and service providers retention.
By suggesting, rather than imposing, different pricing strategies, Treatwell lets business owners stay in control of their brands — and they also stave off negative brand associations some platform users would have developed if they aggressively surcharged.
3. Look Into Adjacent Target Audiences
Women are the primary target audience for beauty brands like Treatwell. But men have also been spending more on beauty products and services.
There are far fewer male “regulars” in beauty parlors — but those who do come regularly tend to spend more money. For instance, in the UK, men spend £3,366.35 on beauty treatments per year on average vs £3,059.91 among women.
Treatwell’s internal research also addressed this trend. In 2020, they found that the demand for:
Men’s haircuts were up +47% YoY
Men’s facials — +10% YoY
Men’s hair coloring — +81% YoY
Men’s Brazilian blow drys — +287% YoY
As a target audience, men also spend less time perusing salon reviews and don’t bother to wait months for a coveted appointment slot. So Treatwell, smartly, started marketing to men, too.
As the team says:
“Our core audience is women between 28 and 45 who can afford to pay for regular treatments to beautify themselves – but it took us two years to get that right, to get the messaging right, to get the creative right. Now we think that the male audience is something we understand a bit better.”
At the beginning of 2018, the brand released its biggest-ever integrated marketing campaign (TV, OOH, and socials), which also targeted the male grooming market. This campaign was a “light” foray into male-oriented marketing. Treatwell’s marketing creatives are still largely female-oriented. Thus, there’s still work for them to do.
The Takeaway: Engaging new target audiences seems like a leap of faith for many brands since they lack audience knowledge and frameworks for changing their brand narrative.
First-hand brand perception data is one solid way to do the initial “reconnaissance”. In-depth target audience research is the next step to build our new brand marketing vectors.
It took several years for Treatwell to figure out its main value proposition and reconcile its branding across different markets. But once they had found a solid footing, the platform started gaining strong traction and grew fast.
Precise performance marketing and compelling in-house creatives played a key part in that. The past two years, however, have been tough for Treatwell — as well as the beauty services industry at large.
Yet, the Treatwell team continues to relentlessly grow its brand and, hopefully, will soon delight us with even more exciting global advertising campaigns! We’ll keep our eye out.