Here's an email that we received a while back that is typical of where physicians new to the cosmetic space start - buying a cosmetic laser or IPL and then trying to figure out how to pay for it.
I am a newer reader and now subscriber to MedicalSpa MD. By the way great content!!
My wife's (Ob/Gyn) practice has recently purchased Syneron Emax and VelaSmooth equipment to begin their aesthetic practice within their Ob practice.
So now that the $$$ has been spent we are working on getting our Marketing, brochures, website etc together to begin to establish an image, look etc. and begin to take customers.
While you name several MedSpa www sites that have problems, do you know of any MedSpa sites that you really like? We would rather not reinvent the wheel and if you might provide a few good www sites we might reference as starting points it would be much appreciated.
Also, I realize you are very busy, however, I think a "Top 10 list of things to avoid" in the MedSpa business or the "Top 10 things to do before you buy your aesthetic equipment" would be very helpful. We just kinda jumped into this market and well as they say... now here we are.
I'm not going far out on a limb here to suggest that this probably sounds really familiar to a lot of clinicians who are just starting out, and to existing cosmetic practices who see competitors popping up around them.
So, we're going to break this down by parts and see if we can't provide some feedback that can help. In fact, we're going to make this part of a series of posts that pulls apart the hopes and false assumptions and injects both some hard realities and some tactical advice that you can put to work ASAP.
NOTE: If you have some questions like this, use the contact form and ask them. We'll do our best to answer your questions since there are others that also have them. (You will not be identified in any way so don't worry that your name or clinic will appear in a post.)
The Accidental Medical Spa
It's obvious from the first sentence in the email above that the spouse has been assigned the task of doing some 'market research' after the fact. It's not uncommon to have a spouse, office manager, or even a trusted friend take on the role of 'startup consultant' and try to bring some clarity to the chaos of trying to start a cosmetic practice inside or alongside your existing clinic. In a lot of cases the physician just wants someone else to do it and tie it up in a bow. After all, they're already working full-time in the practice that is paying the bills.
While I think there are better ways to approach a new business there are also some actual benefits to doing it this way. (Note that I'm not recommending this.) At least it causes you to focus in a way that gets you involved and problem-solving. After all, you now have laser payments to make and if you don't figure out things toute suite, you're in for a big loss. It has the effect of forcing you to pay attention and make some decisions. In the best cases you learn things quickly and make some smart decisions. In the worst cases you lose your shirt and sell your new lasers with a 60% loss which is a really painful lesson. In either case you're getting an education and you're paying for it.
More from the email: "So now that the $$$ has been spent we are working on getting our Marketing, brochures, website etc together to begin to establish an image, look etc. and begin to take customers..."
That's the sentence that really stands out more than the others. It's clear that - since the physician is an OB-GYN - the cosmetic portion of the practice is going to target the existing patient population, but once you start buying lasers you're on the hook for those payments one way or the other. It would be really nice if you knew that the demand was there before those payments start, and there are ways to do that.
So what would I suggest?
If you're a physician who's thinking that you could bring in some additional revenue doing Botox and filler injections and getting a laser or IPL and selling those services to your current patient base.. well, you're right. IF you're smart.
First - and this is critical - sell the treatments before you have to deliver them.
It's not hard to do and you'll learn a lot.
The very toughest sales for everything you will ever do are the first ones. If you can make the sales you'll lower the risk and sleep easier at night knowing that you're going to be able to make your payments. Most physicians ask their current patients IF they would pay for something like Botox or stretch mark reduction or whatever... the real trick is to "presell" the treatments. The only real responses that you can trust are when a patient actually buys from you. That's the ONLY real test.
Here's how you do it:
- Announce to your current patient population that you're going to launch a new service; Filler injections or whatever. Don't position this as "I'm thinking of this, what do you think?". Just proceed as though you're doing it with a specific date or timeline.
- Attempt to presell the treatments or service to your existing patients. If you can't do it with your existing patients you'll find it even harder with new patients that don't already know, like, and trust you. Give them a discount for "pre-ordering" the treatment, something like 10 or 15%. (Don't make the percentage too high since you're trying to find out if you can sell it at full price.)
- Collect the money. The ONLY think that counts here is real sales. Do not count any "I'll buy it once you do it" stuff. Patients will always tell you that it's a great idea to offer more services but you need to know how many patients will buy it and what they will pay. (NOTE: Depending upon what the treatment is the cost may vary widely. If it's really expensive you don't need to sell as many as if it's something cheaper.)
- IF you're absolutely sure that this is a windfall, then actually buy the laser or add the service. If it's not clear, be very careful. Remember that you have to support every service you and and there are opportunity costs to anything you do.
- IF it doesn't sell, refund the buyers you have with your appologies and a small free gift (something like a 20% discount on their next filler injection or a free facial) as a thank you.
See how that works?
You want to start collecting money before you actually make the investment and doing it this way puts you in a position to ensure that you're going to be adding a profitable service and not an $80,000 towel rack.
As always, thoughtful comments or thoughts appreciated.