Today’s Cosmetic Practice Growth Funnel
Welcome to “Beauty and the Biz”, where we talk about the business and marketing side of plastic surgery, and Today’s Cosmetic Practice Growth Funnel.
I’m your host, Catherine Maley, author of “Your aesthetic practice – What your patients are saying”, and consultant to plastic surgeons to get them more patients and profits.
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Aesthetic Authority Article
Today’s Cosmetic Practice Growth Funnel
Saying that “times have changed” would be a massive understatement when referring to growing a cosmetic practice in today’s marketplace.
To make sense of Today’s Cosmetic Practice Growth Funnel, it helps to understand the structure and stages of an industry so you can then adapt to it. This should help….
The Life Cycle of the Plastic Surgery Industry
Every industry goes through stages of introduction, growth, maturity and decline.
Why? For lots of reasons but the biggest one is because society and its consumers accept products & services at different rates. As society begins to adopt and accept an innovation, the demand for new services grows and eventually reaches maturity.
But a lot happens between these stages.
It used to be straight forward to grow a cosmetic practice just one generation ago.
Cosmetic surgery was still a taboo topic and only for celebrities and consumers of high worth value. The demand for cosmetic surgery was limited and so were the number of service providers.
Most of the service providers were plastic surgeons who did a lot of reconstructive surgery and wanted to spread their wings to the cash side of medicine.
Advertising was minimal and consisted of a few surgeons investing in mass advertising via TV, radio and print ads that centered on the surgeon’s status.
Prospective patients looked up to the surgeons and, most often, went with the surgeons’ recommendations since they were regarded as the expert.
When prospective patients called the office, it was to book a consultation with the surgeon. They more often than not, showed up for their appointment and conversions were fairly straight-forward.
This worked well. There were few plastic surgeons to choose from and they enjoyed regal status.
As society accepted plastic surgery more (thanks to the media who report on it and the Kardashians who partake in it…a lot), consumer demand increased dramatically.
The growth in demand for cosmetic rejuvenation, coupled with exciting technological advancements, opened the industry up to an increase in consumers, but also to an increase of service providers.
You longer needed to be a board-certified plastic surgeon to offer cash-based cosmetic medicine.
Any MD could open a med spa and provide convenience and service for cash-based, non-surgical procedures that fill the need for consumers not ready for surgery.
Then, as government regulations deterred medical providers from practicing insurance-based medicine due to low reimbursement and high cost and hassle of reimbursement, that supply of cash-based service providers increased even more.
Once there is a proven consumer demand for cosmetic rejuvenation, big business and pharma also jumps in and creates more solutions for the service providers to offer to consumers.
And, all of that increases the competition dramatically.
The consumer demand continues to increase even more and includes new types of consumers (men and the younger population), as well as geographic opportunities so the future looks promising.
But all of this leads to commoditization in the aesthetic industry.
As the competition enters the market, they offer aesthetic services at lower prices.
They almost have to since they don’t enjoy status and need to enter the marketplace to attract new cosmetic patients somehow.
This creates a downward sloping demand curve that reflects the willingness of consumers to purchase more of the commodity 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 the higher prices.
Adding value includes creating an image and brand to position the practice in a crowded marketplace, as a high-end service provider offering better quality of results, excellent customer service, an upscale experience and so on.
With so many service providers and many more manufacturers offering countless solutions to address the concerns of the cosmetic patients, the competition for new cosmetic patients becomes fierce.
Although total sales continue to grow during the first part of the maturity stage, the increased competition causes profits to peak at the end of the growth stage and beginning of the maturity stage.
Profits then decline during the remainder of the maturity stage because even though many consumers are buying, they are buying on price more often than value.
Here is the point….In the growth stage, even inefficient practices make money. However, only the best run practices survive in the maturity stage.
Less efficient practices struggle to generate positive cash flow in an uber competitive environment because they are not able to spend enough to attract enough patients to generate positive cash flow, so they get weeded out.
Cosmetic practices have to be able to balance their advertising costs and overhead expenses to keep a steady stream of patients coming to them without going broke.
Here is the solution to survive in a maturing marketplace…
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 less resources.
The practices who do this best win. The weakest practices don’t because they cannot afford to operate profitably and compete at the same time on price.
How do you do that?
- Rather than compete on price, compete on friendly customer service, efficient processes, technology to save time and relationship-building.
- Invest in the best staff you can afford and train them on customer service and converting. Their quality of work, great attitude and excellent converting skills will make you money.
- Increase the value of every patient by developing a relationship with them so they return for other services, consent to their photos being taken, refer their friends and give you a 5-star review so other prospective patients also see you as the best choice.
- Turn your current patients into your unpaid sales ambassadors who grow your practice organically by sharing you with their friends and followers on social media.
All of your leverage is with your #1 asset and that is your patient list of consumers who chose you once and they will choose you again and bring their friends with them if you focus on them.
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 redirect some of your advertising costs to training your staff and nurturing your current patients.
So, now, you are growing internally and externally and that’s how you survive and thrive in today’s 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.
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👁 DON’T MISS THESE INTERVIEWS 👁
➡️ Robert Singer, MD FACS – Former President of The Aesthetic Society: https://www.catherinemaley.com/podcast/ep-86-robert-singer-md-former-president-of-the-aesthetic-society
➡️ Grant Stevens, MD FACS – Former ASAPS President: https://www.catherinemaley.com/blog/ep-44-covid-19-update-with-asaps-past-president-dr-grant-stevens
➡️ E. Gaylon McCollough, MD FACS – Former President of AAFPRS, ABFPRS, AACS: https://www.catherinemaley.com/podcast/ep-88-e-gaylon-mccollough-md-facs-past-president-abfprs-aacs
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