Mindbody CEO: Product Updates & Financial Resources for You
PLEASE NOTE: As of 4/16, the SBA has announced it will soon be unable to issue new loan approvals for PPP funds.
Our partner, Lendio has done everything possible to submit every completed PPP application. Approvals are still happening, but more funds are needed. Along with the SBA, Lendio is urging Congress to appropriate additional funds.
As the wellness industry continues to cope with the COVID-19 pandemic, many wellness businesses are looking for new ways to keep their member communities engaged and intact. Mindbody CEO Rick Stollmeyer shares updates on the company’s new Virtual Wellness Platform, important insights into merchant processing and an exciting new partnership to help US-based businesses access financial assistance.
0:03 Hello, Mindbody customers, it's Rick again. And I want to update you on a few things going on in the company and send out a few shout outs.
0:13 First and foremost, I want to let you know that our team has rapidly pivoted our product roadmap to meet your needs both during this crisis and as we anticipate becoming out of the crisis. Our virtual wellness platform, which you'll see a link to on this email is evolving extremely rapidly right now. So the two terminologies to be familiar with is on-demand, which means you've uploaded a library of classes or sessions and people are accessing that library as they want. And that's really cool because it gives a kind of flexibility and accessibility for people that are on the on-the-go or who can't necessarily make a certain time. But the other side of the virtual experience is live streaming because live streaming really gives you the sense of accountability and community. Those things that the people come to your studios and your spas, and your wellness centers for. Live streaming can work, by the way, for both class-based and one-on-one experiences. And I really want to challenge each of you to think of ways, new ways that you can add value to your customers during this crisis while we're all sheltering at home without them coming to your business.
1:29 So I know for salons and spas, this is going to require some true out-of-the-box thinking. Maybe if it's even things that you just do for free as a way to keep people engaged, as a way to build goodwill during this time, so that when we come out of the shelter-at-home in different regions around the world, that those people are going to come streaming back to your businesses. As I've said before, I'm utterly convinced we will all go streaming back to those businesses because we're going to value those face-to-face experiences more than ever But your challenge and your opportunity right now is to stay engaged.
2:03 And I want to segue now into talking about what does it look like for the path ahead? Well, first of all, I don't have any special insight, other than the fact that I do lead a business like all of you. And I talked to a lot of business leaders, I also talked to a number of government leaders that I have a contact with and in the different civic organizations I'm in. I can tell you that well, it looks looks best guess right now is it we're going to be in the shelter-at-home mode, you know, for at least an additional month, in most places, and in some places, possibly two more months. So I'm this message right now is being recorded right now on April 16. And so probably, you know, mid-May to mid-June, is the best guess if it's a little faster than that in some regions, regions that really never got hit bad by the virus, then great. In other areas where things are really tough like in New York, Chicago, Detroit. You know, obviously it could take longer. And the criteria needs to be that the case load is just coming down, down, down, that the testing is, is really robust and is out there. And that the hospitals have lots of reserve capacity.
3:13 So that's going to happen on a regional basis. And the reason we want to talk about this is you really got to be thinking about how you're getting through this next one or two months. On that note, I want to talk about what the governments have done around the world. And so the United States is the one of course that were the most familiar with the PPP that the Payroll Protection Plan that came out of the CARES act that our Congress passed. The application process is kind of Byzantine and hard to find. We have partnered with, with a platform called Lendio, to provide you with an easy application process to get your PPP loan. Every one of you should be doing this in United States. But if you have questions about what's going on in your country, and you can't find it on your own, reach out to us and we'll connect you with the experts in that area. So I also want to reiterate hope you have all met with your landlords to have a conversation around your rent. If your landlord is just refusing to negotiate, I think you can, you can really drive a hard bargain with them at this stage because there's no one that's going to go into your space and rent it in this environment. And every landlord I've spoken to, when it finally comes down to it, is willing to negotiate.
4:29 I want to lastly end with the payments risk piece. And so we've talked about this before. It's just simply a very serious matter for our payments partners, and for us and just to understand it, if you run a member's auto pay with previously committed before the crisis for $100 or £100 and the profit to the payments partner and we get a bit of that profit is something Less than $1 out of that hundred dollars. But the risk if the cardholder later on disputes the transaction and charges it back is all $100 plus the cost of managing the whole dispute. And in years past when businesses had pre sold a lot of memberships, maybe large multi-session passes, that that they hadn't completely fulfilled and then they closed their doors. Well, a large percentage of those former customers will simply charge back the membership or the pass and if it was like a 50 class pass, for example, and they'd already received 20 of those classes. It's not 40% of the amount paid that's charged back, it's 100% of the amount paid and this can get really nasty, really fast. So this is why the payments industry is so attuned to this because in this moment, they are well aware, well aware that all of you are under severe stress. And many of you are at risk of losing your businesses.
6:09 And the hard reality is if you if your strategy is to keep yourself afloat by selling memberships and prepaid sessions and gift cards that you cannot fulfill right now, the normal response for any payment processor would be simply refused to fund those transactions, they would catch them at the authorization point. And if the other authorization had gone through, they would choose to hold the money until you refunded it to the consumer. In this scenario, it's a very special circumstance and I know many of you have have different scenarios in which you can deliver some value certainly if you're using a virtual wellness platform like ours. In this special circumstance, we have been going to bat for you. We have added advocated with each of our payments, partners. It's different by country. It's different by payment processor and what's happening. But if we had given you the unfortunate message that we have to withhold a portion or all of any processing you have done: please know first of all, it's not Mindbody holding the money. It is our processing partner right doing it for our own self-interest. Okay, we're doing it because our payments processor and us we work together to manage risk on the payments platform.
7:27 And the holds could be a lot worse. Okay, that's the honest truth of it. So please talk to our payments risk team if you haven't already. If we can find a way to justify why the payments you're doing are legitimate. If you can help us understand how you're not putting our payments processor and us at risk. By Gosh, we will go to bat for you. We'll do everything we can to get your funds released and certainly when the time comes to reopen, and you are going to reopen your businesses, when the time comes to reopen. We'll do everything we can to release those funds as quickly as possible. And honestly, it may not feel this way right now, but I promise you, this is better for you. Because if you take your customers memberships, and prepaid packages, and gift cards, and you use that cash to get through this month, and next month, and then you reopened, let's say, in the third month, and all of those customers come back, you're streaming back in your door, taking classes, taking sessions, redeeming gift cards and packages, but they're not paying you now.
8:33 Now in that two- and three-month from now timeframe, you're you're going to have to pay your staff, you will be paying your rent again, you're going to all of your operating expenses are going to come back online, and you won't have the cash flow. So I know it doesn't feel good. But when we really we really are doing the right thing for you. So that's the gist of it. As I've said in all prior videos, if you have questions or comments, the best thing to do is talk to our team. We have dozens of people ready to respond to you, you can email me as well. But as some of you might have discovered, I'm getting buried in emails. I'm doing everything I can. I'm giving as much energy as I can to, to respond to you personally. If it's taking me a couple of weeks to respond to you, please have empathy that I'm doing the best I can. Okay? I know we all are. Be Well folks, be happy. By the way, find a way to do your meetings outside like this. Because I was just going stir crazy in my office. Take care, everybody. We will get through this.
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