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You Can’t Pay for Patients and Call it “Marketing”

Posted By Administration, Friday, March 15, 2019

money changing hands

By Patrick O’Brien, J.D., Legal Coordinator for the American Med Spa Association

Finding customers is the biggest challenge for any business. You can offer the finest product or the best service, but none of it will matter unless you can find people willing to walk in the door and buy from you. Therefore, marketing and advertising are critical to a business’s success. This is especially true for medical spas and others in the aesthetic health industry. There are many effective marketing strategies to use, each with its own legal issues. We’ve previously written about issues with email marketing and text message marketing.

The referral is one of the most effective marketing tools. Satisfied customers can be your best advocates and salespeople by simply going out into the world and telling their friends about how great you are. A recommendation from a friend or trusted acquaintance can be hugely credible, so incentivizing people to make more of these referrals for you might seem like a great idea. However, since medical spas offer medical procedures, they are subject to a slew of laws that make rewarding referrals very difficult to do.  Many states prohibit physicians or licensed healthcare providers from paying or accepting money or other types of value for referring a patient.

Consider the ongoing saga of Forest Park Medical Center in Dallas, where doctors (allegedly) enacted an elaborate plan of paying other physicians for referrals to the center for elective surgeries and ran afoul of anti-bribery laws. Forest Park apparently was paying hundreds of thousands dollars per month to physicians for referrals and calling it “marketing.” Obviously, most medical spas are not able to pay millions a month in “marketing,” and very few seek reimbursement from insurance. So what do they have to worry about? Texas’ patient solicitation law prohibits paying “any remuneration in cash or in kind” for “securing or soliciting” a patient. (Confusingly, this particular law is not the one at play in the Forest Park case, but it does apply to other Texas medical practices). So while it might seem nice to give a gift card to someone for bringing a patient to you, it very likely is an offense under this section.

Texas isn’t the only state to look unkindly at paying for patient referrals. Many other states have similar “anti-kickback” laws or general prohibitions on physicians “fee-splitting” with others. New York, for example, clearly prohibits a licensee from offering, giving or receiving any fee or consideration to a third party for the referral of a patient. If you think this seems broadly written, you would be correct—and New York and Texas are far from the only states that have laws such as these on the books; most traditionally have viewed paying for referrals as subverting a patient’s interests. After all, the patient is relying on the person to provide a recommendation that is in his or her best interest, and the introduction of a financial motive may influence that recommendation.

You also may notice that payments for more traditional advertising could fall into this broad definition if the fee is based on results. Depending on the specific facts of the case and the state in which it occurs, this could be the case. California has accounted for this possibility by providing an exemption for certain advertising relationships in its anti-kickback statute. The California Business and Professions Code § 650 prohibits a licensee from offering or accepting any payment as compensation or to induce the referral of patients. However, it does allow for the payment of services (but not payment for referrals) based on gross revenue or a similar arrangement if it is consistent with the fair market value of those services. But even in states like California that explicitly carve out advertising from the anti-kickback rules, not all advertising relationships are permitted. Paying for advertising based on results or consumer response always will appear to be a paid referral and is certainly a risky arrangement. Before implementing any marketing strategy, it is always a good idea to review your state’s fee-splitting and anti-kickback laws, as well as your licensing board’s guidance on professional conduct.

If you would like to learn more about marketing that won’t land you in the same hot water as the physicians at Forest Park Medical Center, consider attending one of our Boot Camps this year. We also have a number of webinars that cover various issues and aspects of marketing that you may find helpful.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law 

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The Incredible Takeaways from the 2019 Medical Spa Show

Posted By Administration, Thursday, February 28, 2019

By: Tim Sawyer, President & Co-Founder, Crystal Clear Digital Marketing

If you were fortunate enough to be in Las Vegas at the Medical Spa Show, then you saw firsthand the explosion in popularity of this emerging event. With almost 1,000 attendees, a vibrant, sold-out vendor floor and the gathering of many of the leading industry experts, the 2019 Medical Spa Show was an event for the ages. As an exhibitor, sponsor, speaker and long-time friend of AmSpa, I was particularly impressed with the diversity among attendees. By that, I mean the attendance and participation of Beverly Hills plastic surgeon Dr. Sheila Nazarian, world-renowned plastic surgeon Dr. Jay Burns as well as many other surgeons, dermatologists, anti-aging doctors and entrepreneurial-minded business folks looking to find their way into the fast-growing aesthetic market. Clearly, this was more than a gathering of newly-formed med spa owners, although there were many. This was the widespread recognition and cultural acceptance of the proliferation of non-invasive technology and treatments to not only treat but also prevent the effects of aging across all age groups. It was great to see this evolution on full display, and I was grateful to be a part of it. From my perspective, there were some important takeaways that will have a significant impact on the industry in 2019 and beyond.

One – why would a plastic surgeon attend a medical spa event? Isn’t that a conflict?

Absolutely not! Historically, there has been some healthy tension between med spa owners and the surgeons who have dominated this market for decades. Now, however, we see that many of these surgeons/doctors have either incorporated non-invasive treatments into their practice, or more often than not, they are opening up standalone med spas as a complement to their existing practice. This trend will continue as better, cheaper devices can get a similar result without the need for costly and painful surgery. What I discovered (the big takeaway) from sitting on the panel with Dr. Nazarian and Dr. Burns was not resistance to the inclusion and growth of the med spa market, but more of a concern related to the lack of uniform protocols and governance in the med spa community. This is a real issue. Med spa owners and operators should share their concerns because non-compliant facilities can cause real problems for EVERYONE, not the least of which would include unnecessary and expensive regulations. The biggest opportunity to continue the growth trajectory is self-policing and adherence to accepted best practices. Net result, well-run, compliant med spas will lead to increased collaboration and support of surgeons and doctors nationwide.

Two – EVERYBODY is trying to solve the social media puzzle. At the 2019 MSS, there were many sessions and panel discussions speaking to this complicated issue. While there were some obvious well-established best practices shared for popular platforms such as Instagram, Facebook, Snapchat, etc., the big takeaway for me from listening to the experts is there is no one-size-fits-all solution. Every practice is unique with varying degrees of resources and different business goals. This is where YOUR discussion with social media needs to start. What are YOUR business goals related to your social media efforts? In other words, what is the problem you are trying to solve? Is it exposure, education, local fame OR how to create more paying patients for your practice? Once you have established some basic business goals, along with established procedures to track your results, the social media puzzle will begin to take shape for you. One cautionary tale – some of the attendees at the 2019 MSS meeting have tens or even hundreds of thousands of followers. We must resist the temptation of comparative living. Meaning, obsessing over the few practitioners who have solved the puzzle might lead to frustration and disappointment. You have to start somewhere and create realistic expectations along the way. Here’s what I know for sure: Everyone had to start with one follower and grow their universe from there.  

Three – and this is the big one – you can drive all the traffic in the world to your practice from Google, social media, email marketing, billboards or wherever, but that alone will not result in sustainable growth. One of the themes that kept emerging was the frustration associated with low conversion rates from these established mediums. The question that needs to be asked is, why do some med spas flourish in the area of conversion while others remain stuck on first base year after year? 

The answer lies in leadership, priorities, people, process and tools. Let’s start with leadership, as it sets the tone for everything else that follows. Leaders must be principle-based. In other words, what do you and the practice stand for? What principles set you apart from everyone else? Leaders must have a plan and commitment to specific goals and strategies to hit those goals for 2019. As the old saying goes, you stand for something or you stand for nothing. What do you stand for?

Your conversion rate is always heavily influenced by your people. Typically, the team should mirror the principles and values set by the leader. Are your people committed to providing a consistent, world-class patient experience each and every time someone visits the facility? Are they enthusiastic? Do they take ownership and accountability for their part in the practice? Most importantly, are you listening to phone calls and training and practicing TOGETHER? Could your people sit down right now and write a similar 30-second corporate commercial that clearly defines your unique selling proposition? I hope so. If not, the marketplace and your competition will define you!

In terms of process, have you sat down to create a sales and marketing blueprint that includes: phone scripts, FAQs, most common objections, price responses, staff credentials, consultation best practices, etc.? From my experience, if you don’t develop this process in painstaking detail, your team will be left to make it up for themselves. And when that happens, the result is generally not consistent with the vision of the owners.

Lastly, does your team have the right tools to optimize the conversion funnel? This must include some way to capture, track and automate communication; nurture and convert opportunities into paying patients; and manage loyalty programs, specials promotions, social media, SEO, emails and beyond. Then, does your team have the right tools to continue the patient relationship to increase per patient revenue, and most importantly of all, RETAIN the patients? And if you have these tools, has your team been properly trained on how to use them? Or, as can often be the case, are your team members trying to brush their teeth with a hammer? Ouch! Painful and expensive.

At the end of the day, whether it’s employing best practices, trying to effectively leverage social media or making the most out of your sales and marketing efforts, there has never been a better time to run a successful medical spa. My biggest takeaway was the positive state of the med spa industry and my belief that the biggest threat to sustained growth is an internal one, which is the non-compliance and lack of willingness to adhere to a uniform set of best practices surrounding the treatment, health and safety of the patient. At the end of the day, this is what we all want, and that is why the 2019 MSS attracted the greatest minds in the industry. Until next year, congratulations to AmSpa on the success of the 2019 MSS!

Visit www.crystalcleardm.com to discover why hundreds of medical spa owners just like you have chosen to implement their fully integrated software, marketing and consulting platform.

Tags:  Business and Financials  The Medical Spa Show 2019 

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Med Spa Slammed with Class Action Lawsuit for Violating TCPA

Posted By Administration, Thursday, February 14, 2019

By: Alex R. Thiersch, JD, CEO of the American Med Spa Association (AmSpa)

Ever heard of TCPA? 

Most people haven’t. 

It stands for Telephone Consumer Protection Act. And it’s the second most frequent federal lawsuit after employment law claims. And now a med spa is on the receiving end

Simply put, it’s a cash cow for plaintiff’s attorneys. And why not? As Willie Sutton once opined… he robbed banks because that’s where the money was. 

What is it and what triggers it?

In 2019, TCPA is mostly triggered by SMS text message marketing. The business send offers to its prospects by text message. Text messages are generally opened and read. It’s effective.

SMS texting implemented by automated systems is regulated by the Telephone Consumer Protection Act of 1991 (TCPA). TCPA is enforced by the FCC. The FCC updated its TCPA regulations in July of 2015. And there’s a recent appellate court ruling which considered whether the FCC over-reached. That ruling created more questions than answers. The litigation machine roars on. 

Initially, TCPA was designed to prevent dinner being interrupted by pre-recorded junk marketing calls to landlines. That was in 1991. When we had land lines and actually ate dinner together. Today, TCPA mostly tackles text messages. 

The statutory damages for violating TCPA is $500 per text or actual damages, whichever is greater. The statutory damages are up to $1,500 per text for willful or knowing violations. 

It doesn’t take much for this number to get large quickly. 1,000 x $500 = $500,000.

Because the number can get large quickly, class action lawsuits in this domain are enticing to attorneys, even when a business has done everything right. There is no cap on aggregate statutory damages. Multi-million dollar settlements are not uncommon. 

In Kolinek v. Walgreen, Walgreens settled a class action suit for $11 million. What horrible thing did Walgreens do? A consumer provided his mobile number to Walgreens when he picked up a prescription. The pharmacist allegedly stated the number would only be used to verify his identity for future refills. Walgreens then sent messages reminding the consumer to pick up his refills. (Here, the number was not actually used to “verify his identity”; it was just a helpful reminder about refills.) The consumer filed a TCPA class action lawsuit. Multi-million dollar settlement. By the way, each consumer received about $20. The lawyers received millions.

How does a business prevent such mischief? If the text message is advertising or marketing, the business must obtain express prior written consent from each consumer who will receive a text. The consumer cannot be charged for the text. There’s a laundry list of items that must be included in a consumer’s written consent to be TCPA compliant. And the burden is on the business to obtain this consent. Getting this consent is like getting HIPAA consent for every consumer – yet again.

We’re sure a business that sells TCPA services will tell its clients not to worry. But, are they willing to indemnify the client for potential multi-million dollar judgment? Most errors and omissions or general business liability policies do not cover TCPA claims or they explicitly exclude TCPA claims. Medical malpractice insurance claims do not cover TCPA claims. 

At least with medical malpractice, a plaintiff needs to allege an injury. The doctor is typically covered with medical malpractice insurance. And many states cap damages. 

With TCPA, the sky is the limit. The mistake can be innocuous. And insurance is generally not available to ease the sting.

Still, it IS possible to promote robust SMS text message marketing campaigns and comply with TCPA. The time to get this right is before there’s a problem. 

Tags:  Business and Financials  Med Spa Law  Med Spa Ownership 

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The Rise of Non-Core Physicians

Posted By Administration, Tuesday, November 27, 2018

By Alex R. Thiersch, CEO  of the American Med Spa Association (AmSpa)

During its early years, the medical aesthetics industry was dominated by the physicians who are referred to as “core doctors”—plastic surgeons, facial plastic surgeons, oculoplastic surgeons, and dermatologists. This makes sense, since these physicians are well-suited to oversee and provide medical aesthetic services. However, in recent years, more and more non-core doctors have entered the marketplace. They are looking for ways to boost their compensation, define their brands and be their own bosses, and they are taking over the industry, much to core doctors’ chagrin.

Today, approximately 60% of all medical directors at medical spas are non-core physicians, and it’s likely that percentage will only increase in coming years. An incredible influx of non-core doctors is coming into the marketplace, and it is very likely that their ranks will expand as the popularity of medical spas increases and the public becomes more aware of these businesses.

Core doctors tend to presume that they are best-equipped to deal with the intricacies of the non-surgical medical aesthetic industry, because it is roughly adjacent to their fields of expertise. However, many often try to run their medical spas as parts of their surgical and dermatological practices without realizing that a medical spa requires a much different business model and perspective.

Non-core doctors, meanwhile, are aware that they don’t know about the medical aesthetic industry and are willing to work to learn about it. They tend to place their primary focus on their medical aesthetic practices, and they become part of the industry by fully participating in it and committing to it. They perform the treatments, build their brands, undergo business training—in other words, they experience all the aspects of running a medical spa. Whether through education or trial and error, they try to learn how to run medical spas effectively. They know they need to have patients in order to survive, which is something many core doctors tend to overlook—if a medical spa associated with a surgical practice doesn’t make money, it’s not a major problem because the surgical practice is where the real money is. If a medical spa is a physician’s primary focus, though, he or she must learn to adapt quickly, and that’s why non-core doctors have experienced significant success in the medical aesthetic industry in recent years.

Of the top 10 medical spas that I know of in the country, none are run by core doctors—they’re run by either non-core doctors or entrepreneurs, most of whom partner with non-core doctors as their medical directors.

In the face of this, core doctors have begun to express concern about the quality of the treatments provided by non-core doctors and, honestly, they have a point. After all, you probably wouldn’t want to be one of the early patients at a medical spa that’s run by a non-core doctor who is new to the industry. However, at the same time, why would you want to go to a core doctor’s medical spa that’s connected to a surgical practice, where your treatment is viewed as an afterthought?

Non-core doctors are affecting the industry in ways that few could have foreseen. When I speak to core doctors at conferences such as Vegas Cosmetic Surgery, I tell them that they’ve fallen behind when it comes to medical spas, and that they need to start considering their medical spas as discrete businesses or else they’re going to be pushed out of the industry. Some core doctors understand this, and when they implement this philosophy into their medical spas, they’ll likely be surprised by how much more money they make.

However, as of now, the medical aesthetic industry belongs to the non-core doctors, and it’s up to the core doctors to catch up and reclaim what was once theirs.

If you would like to learn more about the legal issues surrounding your medical spa, attend The Medical Spa Show this coming February in Las Vegas, NV. 

Tags:  Business and Financials  Med Spa Trends 

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Understanding CoolSculpting and Your Med Spa

Posted By Administration, Monday, November 19, 2018

By Brad Adatto, JD, Partner, ByrdAdatto

Whether you’re an entrepreneur or a veteran business owner of a med spa, you know that business tends to run hot and cold. But does it really matter that business is hot when lifestyle preferences are cooling down? Literally. CoolSculpting is the growing phenomenon that is shifting a culture that was once obsessed with burning fat to freezing it.

CoolSculpting offers a fat reduction alternative to liposuction and a lifestyle alternative to diet and exercise by freezing and eliminating targeted fat cells using a process called cryolipolysis. The process is noninvasive, nonsurgical, and FDA approved. But make no mistake, there are still plenty of legal considerations to navigate before entering into one of the fastest growing practices in the country.

While the procedure is commonly referred to as a “cosmetic” treatment, CoolSculpting, or cryolipolysis, is considered the practice of medicine and a medical treatment in many states. Therefore, businesses must be extremely careful when navigating state laws regulating the practice of medicine, including the ownership and staffing of a CoolSculpting business.

Here’s what you need to know:

Ownership. You should develop your business and ownership model according to the laws of the state(s) in which you plan to practice. Because these laws vary from state to state, you need to know how to legally structure your CoolSculpting business and the type of liability that may be associated with the structure you choose.

You also need to know if there are any licensing restrictions on owning a business that renders medical services in the state(s). California, for example, limits the ownership of businesses that provide medical treatments to California-licensed physicians, but also allows partial ownership by a list of other non-physician health care providers, subject to strict and narrow business and ownership structure requirements.

The Practice of Medicine. What constitutes the practice of medicine or medical treatment varies from state to state, and these laws can be specific and nuanced to varying degrees. Therefore, you need to know whether CoolSculpting is considered the practice of medicine, and consequently a medical treatment, in your state. For example, Texas considers diagnosing a person as an appropriate candidate for a cosmetic medical procedure and giving orders for their treatment to be the practice of medicine.

Staffing. Medical professional scopes of practice not only vary from state to state, but also vary depending on the training, experience, and skill of a medical professional. Therefore, you need to know who can legally perform the treatment in your facility. It critical that state laws governing who can legally perform medical treatments, such as cryolipolysis, are not confused since many states only permit state-licensed physicians, physician assistants, nurse practitioners, and certain other licensed healthcare professionals to perform cryolipolysis, subject to state laws governing delegation and supervision.

Brad Adatto, JD, is a partner at ByrdAdatto, a business, healthcare, and aesthetic law firm that practices across the country. He has worked with physicians, physician groups, and other medical service providers in developing ambulatory surgical centers, in-office and freestanding ancillary service facilities, and other medical joint ventures. He regularly counsels clients with respect to federal and state health care regulations that impact investments, transactions, and contract terms, including Medicare fraud and abuse, anti-trust, anti-kickback, anti-referral, and private securities laws.

Tags:  Business and Financials  Med Spa Law  Med Spa Trends 

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Build Loyal Med Spa Clients with a Loyalty Program

Posted By Administration, Wednesday, November 7, 2018

By Dori Soukup, CEO and Founder of InSPAration Management

In the early 1980s, American Airlines’ goal was to increase retention and provide their clients with something extra special. The airline created the first frequent flyer program that allowed travelers to accrue miles and gain benefits when they flew with American. 

American Airlines was one of the first companies in the country to offer a customer loyalty program. It set the standards for the entire industry. Since then, loyalty programs have gained significant popularity. According to a recent study, companies spend more than $2 billion on loyalty programs every year. Statistics show that the average American household belongs to about 14 different rewards programs. 

If you want to increase your retention rate, it is a great idea to offer your clients a loyalty program that will keep them coming back. 

What type of loyalty program should you offer? 

There are several types of programs to offer consumers, and no matter which one you choose, it is important to keep it simple. Below are two of the most effective loyalty programs: 

A. Charge a fee to join the loyalty program. 

For example, Barnes & Noble charges its clients $25 to join their loyalty program. Then, its members can save 10 percent on their purchases for an entire year. For a person who frequents Barnes & Noble weekly, this type of program provides great benefits. The end-of-year savings are significant. This program keeps me loyal to Barnes & Noble, and the $25 fee to join is well worth it. You can do the same, but I recommend you charge more. For example, you can charge a fee of $150 to join and offer them the following:

  • Two $25 gift cards—to be utilized one at a time 
  • A complimentary consultation valued at $50 
  • A complimentary makeover valued at $50 
  • A loyalty program welcome kit 
  • A discount of five to ten percent on every spa visit or retail purchase 

You are giving them the $150 enrollment back in value. This allows you to raise cash flow, and encourages the new member to visit the spa on a regular basis. As part of the loyalty program, the client will benefit by receiving a small discount with each spa visit. 

B. The second plan offers clients a chance to join for free and earn points with every visit. You can reward them by letting them earn one point for every dollar they spend. Once they reach a certain number of points, they can use them toward gifts, services or products. 

You will need to determine the amount of rewards you are willing to offer. For example, if someone spends $500, they will earn 500 points. If you wish to offer them a 10 percent reward, you will need to select a $50 prize that they can have once they reach 500 points. This represents a 10 percent reward. If you are offering this type of loyalty program, I recommend you offer merchandise as a reward because your cost will be $25, but the client will receive a value of $50. This practice allows you to decrease your loyalty cost to a five percent reward instead of 10 percent.

Select gift items that you can brand with your logo. This includes robes, T-shirts, hats and water bottles, all displaying your logo. This method has many benefits: 

  1. Provides your loyal clients with desirable, quality gifts 
  2. Gifts are a great way to promote your business 
  3. Shows a higher perceived retail value while reducing your loyalty cost 
  4. Saves money and increases retention 

The point system can also be used as a marketing tool. If you have some slow slots within your schedule, you can reward your clients with double points on slow days or hours. Instead of offering discounts, offer double points for promotions. You can ask your clients to write reviews to earn points. Or, let them earn points when they “like” your page on Facebook, and so on. 

Keep in mind that no matter which program you offer, you have to market it, track it and deliver a great guest experience. 

Offering a loyalty program is a great opportunity to promote your business and recognize your VIP clients with special value while motivating your clients to keep doing business with you. Implement a loyalty program and increase your retention! 

Dori Soukup is the Founder and CEO of InSPAration Management, a firm specializing in medical spa and salon business development, advanced education, and business tools. Throughout the past 15 years, Soukup has contributed to the success of spa companies worldwide. Her passion is developing innovative, effective educational programs and business strategies leading to exponential growth and profits. She is the recipient of the American Spa Preferred Educator award and is a sought-after global speaker within the spa and medical spa industries.

Tags:  Business and Financials  Guest Post  Med Spa Ownership 

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Medical Spa Bad Press: Coming to Terms with Compliance

Posted By Administration, Thursday, November 1, 2018

By Alex Thiersch, CEO of the American Med Spa Association

Bad outcomes and patient injuries in medical spas are appearing in more and more headlines across the country. It is evident to many who work in the medical spa industry that there are a number of grey areas in the rules and regulations that govern it, and that certain unscrupulous medical spa owners and operators exploit these inconsistencies while sacrificing quality patient care to make money. Media pieces highlighting these bad actors in the industry are appearing with increasing regularity, and even the Doctor Oz show recently highlighted “Rogue Med Spas” that endanger patient safety. These reports express the industry’s problems to the public and, when the public catches wind of a health issue, you can bet that local, state and federal regulators will need to address it sooner or later.

View the full segment.

See AmSpa’s full statement on the segment here

The days of the medical spa industry being the “wild west” are likely coming to an end. So if your practice is not entirely compliant with your state’s medical statutes, it is certainly in your best interest to identify the ways in which it falls short and address them as soon as possible.

AmSpa members can check their state’s medical aesthetic legal summary to find the laws governing their practice.

The Truth

Stories such as the Doctor Oz report are not positive for the medical spa industry, but they’re not necessarily hatchet jobs, either—many medical spas are, in fact, operating illegally, and untrained, unqualified employees are burning patients with lasers, among other potentially serious violations.

Medical spas and laser centers have become so popular—and so profitable—that some owners and operators rush to open them and, as a result, they are often not properly formed and not compliant with state and local statutes. Traditionally, there has not been a great deal of enforcement of these violations, but this is changing.

Medical spas have become so prevalent that state regulatory agencies simply cannot ignore them anymore. As is seen in the rise of media coverage of these issues, patients who suffer unforeseen outcomes will not hesitate to complain to the media. Personal injury attorneys have also picked up on the trend—you may have noticed television commercials and print ads calling for clients to sue medical spas and laser centers. The story is out there, and it only takes one aggrieved patient to cause a medical spa’s world to come crashing down.

Although it is undeniable that there is a certain level of non-compliance that exists in the medical spa industry, medical spa owners and operators need to be asking themselves how they can start becoming an industry that regulates itself, so that they don’t have these types of continuing issues with state regulators.

Creating Compliance

To start on the road to compliance, medical spa owners and operators should take the following steps.

  1. Know the law. While there are grey areas, many answers can be found in state’s practice acts with just a little bit of searching.
  2. Reach out to local health care attorneys for evaluation. Most medical spas only contact a lawyer when they’re already in trouble, not at the front end where the lawyer can help prevent trouble down the road.
  3. Work toward understanding. You goal should be to understand the basic core principles regarding medical practice and realize that, while this is a lucrative industry that is often quite safe, there is still some level of danger.

AmSpa pledges to continue its efforts to educate medical spa owners and operators to make sure that they are operating in compliance with the law. It also aspires to educate the public in order for them to understand the difference between a medical spa that is compliant and one that is not, as well as inform them about what the treatments offered by medical spas actually entail. AmSpa is also pushing for standardization of laser training across the industry—in some states, there are no training requirements, and a lack of proper training can lead to outcomes such as the ones that Doctor Oz aired to the general public.

The industry needs to come together to discuss how it should be regulated, as it is clearly growing and is not going away. There is some guidance in the laws as they are written, but the states do not do a particularly good job in educating the public about what they say and mean. Still, enforcement is ramping up, and medical spa owners and operators must be properly prepared in order to comply and avoid more negative media coverage in the future.

Attend an AmSpa Medical Spa & Aesthetic Boot Camp to learn how to build and run your medical spa to be profitable and compliant with all of the laws in your state.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law  Med Spa Ownership 

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Don't Sell Yourself Short When Negotiating for Your Med Spa

Posted By Administration, Wednesday, October 31, 2018

By James M. Stanford, JD, Partner, ByrdAdatto

Negotiating for any business, including a med spa, is not easy. Most prefer to avoid confrontation and that preference has its virtues. At the same time, however, that general mindset can result in a tendency to cave during negotiations. It does not mean that one should be provocative and confrontational during negotiations as such a stance may have adverse results. However, holding your position, even when you believe you may not have the bargaining power, can yield surprising results.

Time after time, I see parties give in far too easily on a particular term or position when it’s not in their best interest. This often occurs after discussing the matter informally with the other side (i.e., no legal counsel present for either side) and accepting verbal assurances that in reality mean very little when the language of the contract will be controlling.

Bargaining power is established by many variables, including the size of the respective parties, norms of the industry to which the contract relates, the alternatives available if negations fail, and current market forces in terms of supply and demand for the goods or services being negotiated. One thing is clear though, you can obtain more bargaining power than you think by being willing to walk and find an alternative if the other party is unreasonable in demanding one-sided, onerous terms. I have been pleasantly surprised on occasion when a client holds their ground on certain positions and we ultimately obtain better terms than expected. The only downside is that you may actually have to walk and find another vendor, lender, or location to lease. Nevertheless, this may result in a better deal provided you are seeking terms that are generally reasonable.

Without getting into the specific nuances and art of negotiating, the primary factors for strengthening your position that should be in place before you even start negotiating are as follows:

  1. try to have alternative vendors, lenders, locations, etc.  in case your first choice is unreasonable;
  2. engage legal counsel who is experienced in the industry and subject matter of the deal; and
  3. start with the mindset that you will walk if you cannot obtain reasonable terms.

Of course, this will not apply in situations where you don’t have an alternative and you must consummate the particular transaction. For the most part, however, you will gain substantial bargaining power when you are as willing to walk away from the table as you are to consummate the transaction.

James M. Stanford is an attorney and partner at the ByrdAdatto law firm. From transitions, mergers, and acquisitions to structuring complex ownership arrangements, James enjoys the personal reward that comes from bringing parties together and making deals happen. James practices primarily in the areas of health care and corporate law with a focus on intellectual property. A proud father, Jim served in the U.S. Army and is fluent in Russian. In his spare time, he enjoys hunting, fishing, and spending time outdoors. 

Tags:  Business and Financials  Med Spa Ownership 

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Trademarks: How to Make Your Mark With Your Med Spa's Name

Posted By Administration, Friday, October 26, 2018

By James M. Stanford, JD, Partner, ByrdAdatto

What’s the first thing most people will know about your med spa? The name! The strategy in naming and branding your business can have a major impact on building goodwill and a contributing factor in the success of your business. You will want to differentiate yourself from your competitors and standout, especially if you’re facing a saturated market place.

Clients frequently seek legal counsel to protect their business’s name and to further understand if their business name may also serve as the basis for a trademark. While a business or trade name is somewhat of a different animal than a trademark from a legal perspective, there are parallels between the two concepts in terms of what strengthens or weakens a business or trade name and a trademark.

Entrepreneurs routinely select very descriptive names for their businesses and trademarks. From a legal protection perspective, however, this can be problematic, as the applicable laws are not designed to protect descriptive or generic names or terms. Stated differently, the names or marks in these instances tend to exactly describe the services or products being provided. For example, you have developed an amazing line of unique and organic cupcakes so you name your business Laura’s Organic Cupcakes or Organic Cupcakes of Texas. If you want protect the name and keep others from using the same or a similar name or mark, these are probably the worst choices for a business name or trademark.

Marks that identify or describe a product or service, are in common use, or are used as geographical indications generally cannot be registered as trademarks and will remain in the public domain for use by anyone. Descriptive trademarks can only be registered if they have acquired distinctiveness after years of continued use and recognition by consumers. Generic terms used to refer to the product or service itself, however, cannot be registered or protected as trademarks.

An entrepreneur should resist the compulsion to describe the goods or services they are offering when selecting a name or trademark. Instead, create a name or mark that is novel and unique. An excellent real-life example of a strong mark consistent with our hypothetical above would be Sprinkles®–a well-known and successful bakery that focuses on cupcakes.

Before you spend a lot of time and money selecting a name or mark for your new business or paying a graphic designer to develop a logo to go with the name, you should speak with experienced legal counsel. Otherwise, you may experience the same frustration many others have faced when they are told their business name or mark can’t be registered or otherwise will be afforded little to no protection.

For more ideas on how to build a profitable and legally compliant medical spa attend an AmSpa Medical Spa & Aesthetic Boot Camp and be the next med spa success story.

James M. Stanford is an attorney and partner at the ByrdAdatto law firm. From transitions, mergers, and acquisitions to structuring complex ownership arrangements, James enjoys the personal reward that comes from bringing parties together and making deals happen. James practices primarily in the areas of health care and corporate law with a focus on intellectual property. A proud father, Jim served in the U.S. Army and is fluent in Russian. In his spare time, he enjoys hunting, fishing, and spending time outdoors. 

Tags:  Business and Financials  Med Spa Law  Med Spa Ownership 

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Medical Spa VIP Programs Increase Loyalty and Retention

Posted By Administration, Wednesday, October 24, 2018

By Bryan Durocher, Founder and President of Durocher Enterprises

Retaining patients is one of the keys to medical spa success, and VIP programs can be a huge driver for repeat visits. Loyalty rewards programs are used by some of the most successful businesses including GNC, American Airlines, and most of the credit cards we carry these days. We do not have to reinvent the wheel when it comes to these programs. Offer clients acknowledgement and value added incentives for being your best clients and they are more likely to keep doing business with you on a more consistent basis.

At your med spa everyone’s a VIP (Very Important Partisan, that is). That’s why it’s important to have a Very Important Partisan (VIP) program to create loyalty among your most frequent patients. According to the 2017 Medical Spa State of the Industry Report, only 39% of medical spa practices have VIP programs in place to retain their most loyal clients. 

 

Data collection will begin soon for the 2019 Report and we want to hear from you, so keep an eye out and help us define data in the medical spa industry!

With the Internet and competition it’s more important than ever to keep your hard-won clients shopping with you, since it can cost three to five times MORE to win new patients than to retain your existing ones.

Have them earn points for each service they enjoy and each product they purchase. For every 50,000 points they earn, clients receive a “store” credit worth $50 to spend on services, products, or gift cards.

Be careful, however, of offering rewards for referrals for med spa procedures because of laws regarding fee splitting.

Earning VIP Points – Omni-Channel Earning Clients who interact with you on more than one channel such as receive your newsletter, come to the practice, and follow you on social media typically will spend 18-36% more than clients who just visit for services.

Here’s how your clients can earn points:

Activity Points Earned

Spend $1 at the med spa on gift cards, in store or online – 10 points earned

Spend $1 at the med spa on services, products, series, and memberships, in store or online – 100 points earned

Like and or follow on each of your social media pages Facebook, Instagram, Twitter, Pinterest – 500 points earned for each page.

Sign up for the newsletter – 1,000 points earned

Pre-book their next appointment at time of checkout – 2,500 points earned.

Your system needs to automatically track the points they’ve earned. They can check their balance by asking your concierge, looking at the top of their receipt at checkout, or logging in to their online account (if available).

Redeeming VIP Points

Once they’ve earned 50,000 VIP Points, you automatically send them an email alerting that they have earned a points reward. This requires that they have a valid email address in your system and that they have not opted out to email communication. When they check out of their appointment at the clinic, just alert the concierge to offer if they would like to spend their points and then credit the transaction $50.

Enrolling in the VIP Program

Your clients are automatically enrolled in your VIP program from the first time they make a purchase at the Med/Spa.

The Fine Print

There has to be a catch, right? Not really, but here are a couple of details about how the VIP Program works:

VIP points expire two years from the day that they were issued. So, if they haven’t reached the 50,000-point threshold within those two years, the points may expire.

Points will be awarded at the time of check out. For example, if they refer a friend they will get their points when he/she checks out at the clinic. If they pre-book an appointment, they will earn those points when they check out of that appointment, not when they schedule it, etc.

VIP points may not be redeemed for cash.

No double dipping! Some purchases may not earn points. For example, they won’t earn double points if they buy themselves a gift card and use it on their own purchase. If the spa suspects abuse or other behavior, it can reserve the right to terminate the enrollment in the program.

VIP points are non-transferrable, but they may purchase a gift card with their VIP points to give to a friend.

Consider these other restrictions in your program terms:

  • May not be valid with some special offers, sale items or special purchases.
  • The med/spa reserves the right to terminate or modify the program at any time.
  • Clients may not earn points on purchases or services made using third party gift cards or tender.
  • Card is only valid for cardholder.
  • Card must be present to accumulate points.
  • Points cannot be earned from previous purchases.
  • Only the cardholder’s purchases are valid towards point accumulation.
  • Points are not awarded on shipping charges or sales tax. Product returns and other financial adjustments will be deducted from their total points.

Because there is a savings don’t offer VIP points for gift cards purchases that result in earning a bonus gift.

Enjoying treatments at the med spa may be habit forming, resulting in lower levels of stress, increased wellness, and moments of extreme contentment.

VIP Program Example

The Med/Spa has created valuable benefits to reward our most loyal guests and thank you for your patronage, support and trust.

The Med/Spa VIP program provides you with additional opportunities to make your experiences at our Med/Spa more valuable. View your additional opportunities for saving below.

  • 10% off retail purchases
  • Full Privilege points on product purchases when you spend $300 on product enjoy a $15 product credit in the retail store
  • Insider savings on new services
  • ABC Med/Spa gifts for special occasions
  • 5% discount on series purchases all year (VIP use only)
  • Complimentary Delivery of Gift Cards and Gift Boxes
  • 10% discount on gift card purchases during the months of Jan., Apr., Jul. and Oct.
  • Ask a concierge or your service provider about additional discounts

ABC Med/Spa VIP program cost for annual membership:

$500 for an individual (saving) or $50 per month

Membership can be paid up front or automatically deducted from your account each month.

The ABC Med/Spa VIP program provides savings based on anticipated use. Memberships will expire 1 year after the date of purchase. There are no refunds, credits, or cash given for “unused memberships.”

The VIP program renews annually upon each client’s enrollment date.

You will need to create signage and information about your program to create awareness among your team and client base.

Marketing

Signage can involve large posters throughout the business, station and treatment room signage, POP displays, and flyers for the retail bags when purchases are made. A banner across your website promoting the program is a good idea!

Other marketing tools to promote the program are business newsletters and e-mail marketing to your data base.

Additionally, you can offer your team member incentives for each VIP membership they sell. For the Front desk, you can offer an override to the team based on total sales.

For more ideas on how to build a profitable and legally compliant medical spa attend an AmSpa Medical Spa & Aesthetic Boot Camp and be the next med spa success story.

Bryan Durocher is the author of Wakeup Live the Life You Love in Beauty, and is the founder of Essentials Spa Consulting and Durocher Enterprises. Durocher was named one of the “Top 20 People to Know in the Beauty Industry” by Global Cosmetic Industry magazine, and provides coaching, consulting, global industry trends, and marketing solutions for medical spa, spa and industry professionals internationally. He has published many articles and has provided business education internationally at a variety of national and international industry events including AmSpa’s Medical Spa & Aesthetic Boot Camps and The Medical Spa Show.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Ownership 

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