Saying that “times have changed” would be a massive understatement when referring to Today’s Cosmetic Practice Growth Funnel, and growing a plastic surgery practice in today’s marketplace.
The aesthetic industry is long past the early stages of growth. It’s now in the Growth/Maturity stage, growing in some markets and saturated in others.
This massive shift is due to consumer demand, competition, technical advancements, the maturing Internet, social media, aggressive marketing and price discounting.
For example, when increasing numbers of consumers embrace surgical and non-surgical ways to enhance their physical appearance, it’s like a dominoes effect that takes over the entire industry. Now there are more service providers to meet the need and cash in on the “fun” side of medicine.
Manufacturers also jump in to offer countless solutions to address the concerns of cosmetic patients. Then business and marketing vendors jump in to help the service providers run and market their practices, so they get their fair share of the pie.
All of this leads to commoditization. When more competitors enter the marketplace, they offer aesthetic services at lower prices to entice consumers to choose them.
They almost have to since they don’t enjoy status and somehow need to enter the marketplace to attract new cosmetic patients. The bad news is this creates a downward sloping demand curve that reflects the willingness of consumers to purchase more cosmetic services but, at lower price levels.
Now, consumers have a plethora of solutions at a range of prices to choose from. This forces plastic surgeons to either lower their prices to compete or add more value to justify their higher prices. And, although total revenues continue to grow for the total industry, the increased competition causes profits to peak and then Today’s Cosmetic Practice Growth Funnel By Catherine Maley, MBA decline because even though many consumers are buying, they are buying on price more often than value.
Is it a good strategy to grow by lowering your prices to compete? If you do, your profit margins go down, so there are not as many dollars to invest in advertising for new cosmetic patients. That becomes a race to the bottom, and you can’t win.
The better approach would be to add value by creating an image and brand to position YOU in a crowded marketplace, as a high-end service provider offering better quality of results, excellent customer service and an upscale experience.
10X the Value of Each Patient
The trick to staying in the game is to leverage your assets so you get more value from the costs you already occurred. And, to become more efficient so you make more revenues using fewer resources.
The practices who do this best win. The weakest practices don’t because they cannot afford to operate profitably and compete on price at the same time. How do you do that?
You already spent the time, money and effort in attracting them to you. They will grow your practice for you if you let them… for free. This means you invest in training your staff and nurturing your current patients, so you spend much less on advertising for new stranger patients.
Here is something else important to contemplate… In the growth stage of our industry, even inefficient practices made money because there was only so much supply for the demand. Less efficient practices struggle to generate positive cash flow in an uber competitive environment because their overhead is out of control and they are not able to spend what it takes to attract enough cosmetic patients to generate positive cash flow, so they get weeded out.
Only the best run practices will survive. Those who are business and marketing savvy, are able to balance their overhead expenses and advertising costs to keep a steady stream of patients coming to them without going broke.
Once you have your practice running like a well-oiled machine and your patient-attraction and conversion plan is running on autopilot, you have the winning formula for Today’s Cosmetic Practice Growth Funnel, and to survive and thrive in today’s mature marketplace.
Catherine Maley, MBA is a cosmetic practice consultant, speaker, trainer, blogger and podcaster. Her popular book, Your Aesthetic Practice/What Your Patients Are Saying is read and studied by plastic surgeons and their staff all over the world. She and her team specialize in growing plastic surgery practices using creative patient attraction, conversion, follow up and retention strategies as well as staff training to turn team members into converting rock stars.
Click below to read “Build a Sellable Cosmetic Practice” in its original format in Aesthetic Society News, Winter 2021, volume 25, number 1
