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Critical Financial Numbers You Must Know

Posted By Administration, Friday, November 16, 2018

By Terri Ross, Managing Partner of Lasky Aesthetics

In order to maximize the profitability and success of your office, you need to take an accurate and realistic snapshot of where you are by the numbers.

  • Do you know your return-on-investment (ROI) for every procedure and treatment you offer?
  • What percent of patient leads do you retain?

Patient retention is directly linked to how well your front office staff listens, engages and responds.

In order to become a top-performing practice, every working part of your office or medical spa—the staff, systems, processes and protocols—must be performing at optimal speed. Be diligent and organized in your record-keeping. Take a quarterly snapshot of your office. If you know where you are, you can make a sustainable plan for future optimization and growth.

HERE ARE THE KEY NUMBERS YOU NEED TO KNOW:

Budget
  • Start-up costs – Property, building, equipment, technology, staff and marketing all go into start-up costs.
  • Payroll – When your business is off the ground, payroll makes up a large part of your bottom line. Know how much you pay your personnel, in wages, taxes/insurance and bonuses throughout the year.
  • Equipment – This includes initial cost, maintenance and materials required to run, update and optimize equipment.
  • Marketing – Any expense targeted toward attracting new patients falls into this category, from pamphlets, to website development and networking events.
ROI = (Gain – Cost) / Cost
  • Procedures – Know how much every procedure costs you to perform, including supplies, time and personnel involved. Your potential gain-per-procedure is based on these expenses.
  • Technology – Know how much a piece of new equipment costs to acquire and maintain. You’ll need to include maintenance and supply costs in your calculations of ROI for every piece of equipment in your office.
  • Marketing – Knowing your ROI on marketing strategies allows you to quantitatively measure how successful a specific marketing tactic is. Know how your patients found your office and why they return—online marketing, networking at the right events, etc. Read more about how to calculate your marketing ROI in this article from Forbes.
  • Website position – Know the numbers behind your website—how many people visit the site per day, what page they go to and stay on, what your bounce rate is, and modify from there.
Rates
  • Conversion/close rate – How many prospective patients do you “land?” How many are retained as long-term patients?
  • No show/cancellation rate – On average, how many patients make an appointment and don’t show? Or cancel in advance?
  • New patient rate – The number of new patients you bring in per month, year.
Room Revenue Assumptions
  • Number of rooms – Total number of procedure rooms.
  • Hours of operation – How many days are you open?
  • Average treatment price – Taking an average of all procedures offered, what is your average price?
  • Average length of procedure – On average, how long do your procedures take? This includes operating preparation.
  • Treatments per day – How many treatments do you complete per day? Are any days busier than others?
  • Revenue/hour – Based on the numbers above, what is your average revenue per hour?
Goals
  • New patients – Set a goal for number of new patients retained per quarter. Using the LAER model I developed, you can train your staff to engage, respond to and retain patients.
  • Revenue - Based on where you are, what is your projected revenue? Set your revenue goals and make the necessary changes (processes, protocols, staff) to get there.
  • Revenue/hour – To reach your revenue goals, how much do you need to generate per hour? Avg room should do between $600-$1000 per hour.
  • Price strategy (vs. competitors) – Based on your current and desired revenue, and keeping competitor pricing in mind, develop an informed and realistic price strategy.

How Does Your Office Look By The Numbers?

Do You Have Attainable Revenue Goals And The Infrastructure, Protocols And Staff In Place To Get You There?

CLICK HERE TO DOWNLOAD THE ASSESSMENT BELOW & COMPLETE TERRI'S 10 POINT CHECK LIST.

Terri Ross is managing partner of Lasky Aesthetics & Laser Center, which she transformed from a $500,000 to a $3.5 million business in the span of three years. She is also the CEO of Terri Ross Consulting, providing high-level practice management consulting services and sales training to a number of high-profile physicians, including world-renowned plastic surgeon, Garth Fisher, MD, who started Extreme Makeover, and world-renowned facial plastic surgeon and host of the TV show Botched, Dr. Paul Nassif. Ross is an advisor for Revance Therapeutics, speaks for many companies, and works with venture capital firms to help start up medical spas. Her experience also spans the corporate world, with more than 16 years working as a sales director for several leading medical device companies, such as Zeltiq, launching Coolsculpting in the United States and Canada; Medicis (now Galderma); EMD Serono; and Johnson & Johnson.

Tags:  Guest Post 

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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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5 Tips to Make Med Spa Consultations More Effective For Your Practice

Posted By Administration, Wednesday, October 3, 2018

By Dori Soukup, CEO and Founder of InSPAration Management

A consultation in a medical spa isn’t just the introductory part of a treatment, it’s a key piece of your med spa process that can lead to better results for your patients and better profitability for your practice. 

The “GUEST” is the most essential component to the success of any medical spa business. The way we take care of our guests while they are in the med spa is what determines whether they come back or disappear forever. 

When I ask industry professionals why they chose a career in the med spa industry, most of them say it was so that they could help people. Yet when a new guest visits a spa, they are normally expected to simply select a treatment from the menu, with is then administered with little (if any) discussion. Sometimes I intentionally select a treatment from the menu that is wrong for me to see if the provider will recommend something else more ideally suited for me. They rarely do. 

Why? Because in most cases, med spa professionals don’t take the time to conduct a proper guest consultation. To me, the guest consultation is the most important step of the entire experience. The consultation insures that providers are going to provide the guest with exactly what they need, address their challenges and deliver the results they are looking for. Without a consultation, we are disappointing our guests and hurting our retention rate.

If you want to improve your guest satisfaction, retention rate and income, I suggest implementing the following five steps to generating revenue through guest consultation. 

Check the AmSpa Store for more resources to help you implement your own successful consultation process.

1. Schedule Time to Conduct a Detailed Consultation

When you have a new patient, you should always reserve a consultation first in order to learn and discover their concerns and needs. It’s wise to have the receptionist reserve time for both a treatment and a consultation. 

Have the provider decide which treatment is ideal for the patient once a consultation is performed. To do this, your receptionist must be trained on how to present the consultation appointment and make the reservation for it. 

2. Identify Guest Concerns 

To identify the guest’s concerns, you can use analysis equipment for face and body depending on the type of treatments you offer. We found that when people see their skin care issues with their own eyes, they are more motivated to take action on your recommendations. You can also use consultation forms; just make sure the form includes problems that guests could be experiencing with their face and body. The guest will mark the concerns they have, which gives you the opportunity to make the appropriate recommendations. You should focus on solving their problems via your menu of services. 

3. Develop a Customized Treatment Program 

Addressing people’s concerns and gaining results normally requires multiple treatments. As a medical spa professional, you should recommend a series of treatments, not just one. One treatment is not going to solve problems or produce the results your guests are looking for. 

4. Recommend a Home Care Program 

At the end of the first treatment, take the time to help your guests by recommending a home care regimen. Home care is an important part of gaining results. Don’t cheat your guests of your professional advice or lose the additional income you could generate from home care products.  Find resources to help you train your team to better recommend products here in the AmSpa store.

5. Measure Results

 Since the goal is to recommend a series of treatments with your consultation, it’s important to measure results and gain a testimonial from happy clients. You can take before and after pictures, document conditions or measure improvements. Whichever method you choose, make sure you gain a raving fan to help build your business. 

When establishing your consultation procedure also remember that medical spas are medical practices, so before a treatment plan is finalized, and especially before a patient receives a procedure he or she must be seen by a physician or mid-level practitioner. Conducting the initial exam (or good faith exam) is one of the top legal issues in the medical spa industry so make sure your patients see the required medical professional prior to their first treatment.

Conducting a guest consultation is truly the most important function of your practice. It is the foundation of the entire experience. Don’t dismiss it, embrace it! Implementing the consultation process with every new guest will help you boost client satisfaction and your income! 

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 

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