If you are committed to maximising your growth this year, you must have ZERO TOLERANCE for mediocre staff, sloppy processes and lazy practices that underwhelm your patients. Aesthetic patients today won’t tolerate being treated like second class citizens. They will give their disposable income to the practice that makes them feel special.
Remember there is always someone behind you who is looking at taking your place in the market.
Creating a successful aesthetic practice in times of economic uncertainty is a daunting challenge. Emphasising the patient’s experience, effectively using social media and the web, and an ego-devoid introspective analysis of the flaws of your practice are essential for any successful aesthetic practitioner to grow and be prosperous despite any shortfalls in the economy.
The core principles in medicine and business can, at times, be contradictory. However, the essential fundamentals of medicine are consistent with the best strategies in business. For example: doing the right thing, selflessness, and empathy – bode well in business also. However business is a competitive world and the success of any company is mainly measured in financial statements. We all know that cosmetic medicine is not a general medical business; aesthetic practitioners are selling an expensive luxury, not a health necessity. However, it is important to remember that aesthetic medicine is still, first and foremost, medicine, and beyond any other profession or business, practitioners have an enormous responsibility to always do what is in the best interest of their patient rather than themselves. No other profession is granted such responsibility or high standards. Success should be measured in the patients’ well-being and not just the bottom line.
Aesthetic practitioners have a responsibility to treat the patient first using the most responsible and most appropriate treatments while keeping in mind the luxuries of retail to keep consumer driven patients happy and to remain profitable. So how can practitioners practice this fine balance in a down economy and still thrive?
Most importantly, the ‘product’ has to be good. Regardless of the economy, only a business providing a good product will succeed in the long term. If the product is less than promised, the consumer may be fooled for a limited period of time by creative and expensive advertising, but eventually, the individual will catch on to the inferiority and the business will fail. In aesthetic medicine, the practitioner and staff are the product!
That means any service offered by the practice or persons who represent the practitioner must be aligned with the highest standards of quality. Their competency will be perceived as a reflection of the practitioner. Additionally, the practitioner will have to be well versed in the medicinal products offered and continue to perfect his or her technical skills.
If the product (practitioner) is no good, word spreads fast. This is true in any economy, but with the limited opportunities and increased competition, a practice cannot tolerate even a minority of disappointed patients. For an established doctor seeing a decline in business, now is the time to act fast and implement measures to ensure the practice thrives in the current downturn. Those seeing a reduction in business need to re-evaluate their current policies with an ego-devoid introspection and attention to the following formula so they continue to grow and prosper, as your competitors wonder what happened.
The following success formula will address all of the above and, if implemented, will keep your phones ringing, your patients buying and referrals coming to you. The point is to first check your mind-set. Are you buying into media pessimism? If you are, you are not going to be open to opportunities and possibilities so fix that first.
THE WINNING FORMULA: MESSAGING, INFORMATION, CUSTOMER SERVICE, EFFICIENCY
MESSAGING: Messaging begins with an honest assessment of what defines the practice. Prior to developing the message, a practice must define what it is and how it wants to be perceived. Is it a high-end boutique practice specialising in a certain procedure or a large volume, low-priced discount practice? Or is it perhaps a practice that caters to a certain ethnicity, gender, or culture? In a down economy, it may serve the practice well to narrow its definition so that it can more precisely target the appropriate consumer. Once the practice is confident and comfortable with its message, then the word must get out.
As patients increasingly have multiple options for aesthetic treatments, they are more likely to shop around. If your credentials and quality brand are reinforced, it will be easier for them to justify paying a higher price. Remember, service and results will have to match your boasts, or your credentials risk being devalued. One of the world’s most notable international marketing gurus, Walter Landor, is known for saying that “your brand should be your promise to your customer”. In medicine, the practitioner often wants to present a brand that pledges safety, quality and satisfaction. A critical element of your brand is credentials. They symbolise a “seal of approval” intended to reassure patients that you are high quality and safe. You cannot let a patient take your education and medical training for granted. It is critical that patients are constantly reminded of your brand and credentials.
Over the past decade, the competition for aesthetic patients has intensified. Patients no longer have to drive an hour to get Botox treatment. They simply go around the corner to the nearest high street. This means that if you are positioned as a higher-end brand and charge a greater price, you will need to justify it through subtle promotion of your expertise, extensive training and white glove customer service.
The good news is – a few, subtle credentialing inclusions into your practice décor and daily protocols can be easily implemented without a lot of expense. The bottom line is that your Medical training is impressive, and a patient should never have the opportunity to doubt you. It is up to you and your staff to make sure the first and last impression given is one that reinforces your qualifications.
Create a Wall of Expertise:One of the first and simplest ways of credentialing may seem to be an obvious point, but it is often overlooked. Put your certificates where patients are going to see them! Highlight any training you have and let patients absorb these impressive certificates of your accomplishments on display.To avoid a wall of madness and clutter, use frames that are consistent and unobtrusive. The focus should be on your certificates and the overall look should not be a busy mess of different-sized frames scattered all over the wall.
If you have a large practice and want to display your certificates in multiple rooms, then take them to a professional printer and have them scanned and reprinted on glossy photo paper. Find inexpensive matching frames and evenly distribute them on a wall. This is an easy way to cut the cost of reordering pricey professional certificates.
Share Your CV: Is a new filler patient really going to read every page of your curriculum vitae? Probably not, but a visual tour of your educational and professional past will certainly make an impact, even if it is just a sigh of relief that you are so well-qualified to perform their treatment. A nice way to give patients a truncated version of our CV is to print it landscape-style with two pages to one sheet. This way it is still legible, yet presented in a more compact and convenient manner. A nice touch is to have a bound version of your CV available in your waiting room.
Implement an Education Corner: Each time you do something as simple as attend another training course, let your patients know. Ultimately, your continued education and weekends away from the office studying benefits your patients – so tell them about it. Implement an “Education Corner” displaying recent seminars you have attended or, better yet, given. Patients want to know that practitioners in all stages of their careers continue to be active with advancements in medicine.
Educate Your Staff: Every member of your team should know where you went to medical school. To ensure they remember, then use a credentialing sheet by every phone, that includes answers to the most frequently asked questions to help staff members provide knowledgeable responses.
INFORMATION: It is essential to get the information to the prospective patient efficiently and effectively, encouraging the individual to confidently decide on the treatment or procedure prior to even coming in for his or her appointment.In today’s slow economy, getting positive, influential information to prospective patients efficiently is essential. Think about well-established brands, such as Nike and McDonald’s; they expect an instant return from an advert that says “Just Do It” or “I’m Lovin’ It.” In other words, people will be reminded to purchase a well-known product or visit their establishment based on the mention of this brand in an advertisement. The brand and its message are already well known to the consumer; hence just the mention of the brand is all that is needed to prompt the consumer to act.
How this relates to aesthetic medicine is that if a practitioner is the most established, well-known practitioner in the community, then perhaps just the mention of the practitioner’s name or practice in an advertisement is sufficient to gain business. But if he is not the biggest, most popular aesthetic doctor, then one cannot solely rely on a brand awareness advertisement. The message has to be stronger, more convincing, and designed to net a return. The consumer needs a stronger reason to come in. Especially now with the recessed economy, it is best if the individual decides on his or her provider and service even before the consultation.
In the film industry, the opening weekend of a major studio film release will expect to gross at least a third of its total expected income. If the movie does not do well immediately, the promotions are stopped and it goes right to DVD. This is why heavy promotion, ads, and interviews with the celebrities are evident before the movie even comes out. This is because the studio knows it has one opportunity, the first weekend, to determine whether its film will be a financial success. Likewise, an aesthetic practitioner will need to convince the consumer that the practitioner is the best before the individual even comes in because after he or she leaves, it may be too late. If the individual has to question practitioner credentials afterwards, he or she will already be on to the next doctor.
It’s the little things that pull you out of the fray and into a “class of your own.”
Let’s start with your phones. A well trained receptionist can catapult your new patient conversions when they call and get a great experience on the telephone. What defines a great experience? A phone that is answered by the third ring, by a friendly voice, by someone who can answers simple questions about the procedure and the practice and who can ask for the appointment.
In the last couple of years there has been an increase in ‘price shopping’ phone calls. An easy way to flip that phone call from a 10-second price enquiry to booking a consultation is to engage the caller in dialogue. Don’t simply provide a direct, blunt answer; instead, ask questions that will open up the caller. When asked, “How much are your filler injections?” you could respond, “There is a range in fees with filler injections. Let me ask, have you ever had an injection before? What was your experience like?”
This is a basic phone sales technique, but you can take it a step further and provide a “credentialing statement” that further separates you from the other four price calls that patient just made. For example, instead of saying, “Dr Jones charges £350 for a filler treatment,” you can mention, “As a certified facial plastic surgeon, Dr Jones is one of the leading injectors in the city specialising in this treatment. To date, he has performed more than 800 facial injections, and his fees range from £350 to £650 for a treatment.” If the caller has made this same exact enquiry to several establishments, which most price shoppers generally do, the assertion of experience and qualifications will help set you apart from the other offices she has called, along with helping her justify the £50-100 price difference.
COMPELLING CUSTOMER EXPERIENCE:Superior customer service is paramount in a down economy. When patients have the ability to shop around, seemingly minor niceties can have a disproportionate impact in making a prospective patient feel comfortable with the doctor and the practice. Think about your own experiences as a consumer, I bet you can remember the experiences that made you feel special, the ones that were memorable and the ones you would rather forget.
For example: the restaurant that you visit regularly, where the food isn’t always award winning, but the owner and the staff make you feel as though you are their most important customer. They remember your name, your favourite table, your favourite wine and even ask questions based upon your previous conversation. They make you feel valued and special every time. Compare this to the restaurant that sat you down in a rush, forgot about you, made you wait 30 minutes until they asked if you would like a drink and then still forgot to give you a menu. That is one experience you don’t want to repeat in a hurry.
Did you know…? The number one reason patients leave your clinic is not because of a bad result. It’s because of ‘Perceived Indifference’. They didn’t feel valued, so they don’t feel compelled to return. A study carried out years ago showed the number one reason people stopped using the services of a business was ‘Perceived Indifference’ meaning patients’ perception that a business does not care about them. Most consumers (particularly in the UK!) don’t speak out at the time if they aren’t happy, they just go away afterwards and spread the gloom and doom about how unhappy they are and what an awful experience they had and simply never return.
The single biggest revenue killer in any business is ‘Perceived Indifference’
✔ Patients NEED to feel significant and important
✔ Patients NEED to feel that you care
Remember this…..People will forget what you SAID. People will forget what you DID
But people will NEVER forget how you made them FEEL
If a business hears repeated dissatisfaction with patients at a number of touch points and do nothing to correct the gap or deficiency, what does that say to the patient? It says, “We don’t care.” It doesn’t take a Ph.D. to understand that the perception of “we don’t care” doesn’t bode well for a long-term relationship. Treat me with indifference and you are easily replaced in my line-up of potential medical aesthetic clinics.
So here is my advice – take it or leave it: A great way to make more money is to STOP losing patients by giving them a compelling experience every single time. It would take a minimal amount of effort and money to keep in touch and keep these patients coming back for more and referring their friends. How much should you invest in keeping these patients? Determine what a patient is worth to you for their lifetime, what it costs to replace them (7 x that amount) and there’s your answer.
A music lesson for every business owner: Love them or hate them, even after 50 years the music of The Rolling Stones still sounds great. But how do the Stones stay relevant? It’s all about an amazing live music experience, marketing and branding. There are plenty of lessons they can teach us about how we can run own businesses. For example…
They deliver a “WOW” experience: We all have the same 24 hours a day as everyone else, but to be successful, you need to deliver an experience people won’t soon forget. I’ve only attended one Rolling Stones concert, and despite not being their biggest fan, I did leave feeling like “Wow! What a show!” That’s the same experience you should be delivering to all of your patients. And do it the same way Mick Jagger does, focusing on every detail from the audiences perspective– lighting, seats, sound – to deliver that “wow” experience.
The Rolling Stones have plenty of money, so what really keeps them at the top of their game? They’re driven by the goal of leaving a lasting legacy and introducing new generations of fans to their music. So never let age hold you back from what you really want to do in life. Success comes at any age. If you are going to fill stadiums all around the world and gross hundreds of million as they did on their last tour, you don’t do it on solely on great music. They provide an amazing live music experience every single time, whilst keeping their marketing and branding engine roaring on all cylinders – selling out so many venues that I’m sure they’ve lost count by now.
EFFICIENCY: If you ultimately want to succeed in business, you must learn how to identify and diagnose those activities which are sabotaging your financial results and then know how to correct those mistakes so that the results you desire can be achieved. It is always important to be aware of the practice’s expenses, but heightened sensitivity is even more relevant in a down economy. Frivolous spending needs to be curtailed and bold, and aggressive plans for growth may have to be re-evaluate or even removed until a later time.
The trick is to understand and know how the underlying route cause produced the offending outcome and change the appropriate activities to produce better results in the future. Anyone who hates to measure does not want to be held accountable, so when implementing these transformational changes in your business remember this:
What gets measured gets managed and what get managed gets done.
Think about it now, if you started to measure the most critical aspects of your business right now – not only are you more aware of what is actually happening (hourly, daily, and weekly) but those numbers will improve just by the simple act of measuring them. When it comes to business and financial analysis, it starts with the numbers and you can’t understand the numbers if you can’t speak the language. No wonder 90% of businesses fail in the first ten years and during that time many are struggling to survive.
Is your practice profitable? Most medical aesthetic practices can answer this question quite easily. A review of accounting statements or tax returns will tell you if your operation is in the red or the black. But is each patient you treat profitable? And did the new dermal filler campaign you just completed bring the return on investment you originally estimated? For many practices, these questions are more difficult to answer.
Hopefully you have a good computer system that can easily provide reports to tell you:
– Revenues
– Number of new patients
– % of revenues to overhead costs
– Average number of patients seen per day
– Average order size per patient
– Revenue streams broken down by procedures and treatments
– Return of investment (ROI) for each promotional effort
– Waiting times
– Cost per Patient: determining the cost to acquire and maintain a medical aesthetic patient is key to maximizing practice profitability
This data will help you determine where to spend your time, money and resources to put more efforts in certain areas like patient flow and staff training and less in areas that are not helping you or your bottom line. Compare month by month and quarter by quarter so you can change course mid-year if you need to.
Go through your database and study your accounts receivable carefully. You’ll see certain pockets of positive results that you can get more of, if you simply put some effort into promoting them. Look for trends. Which are your most popular procedures performed? Which procedures are the most profitable (taking into account how much of your own time is involved)? The fastest and easiest way to increase your revenues is to replicate your successes again and again.
Study your patient demographics. You will see trends in age, gender, marital status, home ownership, children, education level, occupation and income. You’re not judging these folks. You’re simply learning the type of patient who is most likely to be attracted to you for certain procedures. By the way, if you don’t like the trends you come up with, you need to change your marketing to attract who you do want as your preferred patient.
Every practitioner, regardless of the size of his\her practice, i.e., solo, small group practice, large group practice, multi-specialty group practice, needs to review the minimum metrics that provides them with an understanding of the success of their practice, or helps them to identify any problems which in turn provides them with an opportunity to find solutions.
Taking the time to determine the cost of acquiring new patients, as well as the potential long-term profit margin for specific patients groups, can help you fine-tune your pricing. It can also streamline operations and zero in on your most successful marketing avenues, culminating in increased profitability.
The minimal metrics include:
New Patients per Month: Suppose you are monitoring the number of new patients that enter your practice on a monthly basis. Your practice enjoys a 12-15% new patient a month\total existing patients seen in the practice each month. You monitor this metric and find that for three consecutive months your new patient to existing patient ratio falls below 10%. You look into your new patient numbers and you find that the new patients entering your practice from patients referred by existing satisfied patients are stable but new patients from your website have sharply decreased. Knowing this one detail will mean you can make immediate improvements to your website conversions.
Cost Per Acquisition: Marketing and advertising are integral expenses for medical cosmetic practices, and more media and marketing agencies than ever before are fighting for your advertising spend. Most small businesses use a combination of guesswork, the amount of funds available and gut feeling to set their marketing budgets. However, understanding the lifetime value (LTV) of a patient and the cost to attract a new patient provides a more concrete view of the most and least successful marketing avenues. Customer acquisition costs (CAC) are calculated by dividing acquisition expenses by the total number of new patients.
Step 1. Track your expenses for every advertising and marketing campaign you launch to bring in new patients. This includes the cost of salaries for personnel or outside agents organising and implementing the campaign, as well as any materials or advert space purchased.
Step 2. Track how many new patients book a procedure as a result of that campaign. You can do this by asking—and training staff to ask—new patients how they heard about your practice.
Step 3. Divide the cost of each campaign by the total number of patients who actually purchased a procedure or product from your practice as a result of that marketing effort.
The resulting number will tell you the cost per acquisition. For example, if you ran an ad in a local newspaper for £1,000 and you gained four new customers, your CAC would be £250. Not too surprisingly, there are different opinions as to what constitutes an acquisition expense. For example, rebates and special discounts do not represent an actual cash outlay, yet they do have an impact on cash flow.
Profit per Patient: Once you’ve determined the CAC, you need to know if that cost justifies the profit realised per patient. If one new patient costs £250 to acquire and she purchases £1200 in treatments and services at a profit of £400, you have identified a successful campaign. You spent £250 and made £400. Because medical aesthetic patients are often repeat visitors who come to your practice every three to six months for injectables, facials or IPL treatments, you also want to consider the LTV of new acquisitions when examining costs. In order to determine the LTV, you need to compute the gross profit margin expected to result from that customer over the lifetime of the relationship.
For example, if you’re typical Botulinum Toxin patient stays with your practice for five years and spends £300 every six months for injectables at a profit of £150 per treatment, the lifetime value of a patient seeking Botox Cosmetic injections is £3,000 and the lifetime profit to your practice is £1,500.
The Most Profitable Patients: The above calculations give you a general overview of patient profitability, but as practice owners know, not all patients require the same amount of support. A patient who visits your practice only sporadically and does not require a lot of service may be a good patient—in terms of profitability—while another patient may spend more per visit, but require so much support and outreach that she ends up costing the practice money.
The best way to evaluate the profitability of a specific patient or patient group is to keep track of all interactions with that patient or patient group over a two- to four-month timeframe. Many practices determine procedure costs based on the cost of the service provider and the product used plus a percentage of their overhead costs. Missing from this measurement is additional support, including the receptionist’s welcome, coffee services, follow up calls and visits that ultimately make up the total cost required to meet the patient’s needs.
An analysis of patient profitability compares the costs of all the activities used to support a specific patient or patient group with the revenue generated by that patient or patient group. To determine the total cost of performing a particular procedure, the expenditures for all professionals involved (i.e., the support staff, supplies and a portion of the overhead costs) must be considered. To apply a similar strategy to determine the cost of servicing a particular patient, practice owners can use “activity-based” costing.
Activity-based costing requires an extensive analysis of the amounts spent by the practice on both the procedure and service to the patient. This differs from general accounting processes that reveal the cost of operating a practice over a set period of time—a day, a week, a month or a year—and dividing that figure by the total income in that timeframe to produce an average cost. To perform an effective activity-based cost accounting review, the help of an accountant is advised.
Converting Unprofitable Patients: The first step in turning unprofitable patients into valuable assets is to determine whether the relationship can be improved. A practice owner or manager who believes in holding onto every patient—no matter what the cost—may never see the medical aesthetics business reach its maximum earning potential. There are a number of strategies that can be used to turn unprofitable patients into profitable patients including:
- Pricing services and products more effectively
- Improving internal processes to reliably predict the impact of business decisions on total system costs
- Negotiating discounts and payment terms with the patients (i.e. if there is a problem with slow pay, practices may require payment at the time of service)
The one question many practice owners or managers often ignore is whether their best business decision may actually involve letting some of their least profitable patients go elsewhere. While this may seem like an illogical suggestion (particularly in a bad economy), having the wrong patients can hold a practice back from real success—despite the temptation of short-term profits. If the problem is not addressed, the facility may find itself in a difficult position, with minimal profit margins and an inability to accept new and more profitable patients.
Accounting for acquisition and service costs helps practices develop more targeted marketing campaigns and more realistic pricing strategies. When detailed enough, that same cost accounting can also reveal who you’re most profitable patients and patient groups really are.
Looking at the metrics describe in this blog will take you less than one hour a month and will be a great return on your time investment. Failure to do so is to be at the mercy of your accountant to identify problems in your practice and very few accountants have in depth medical experience to trouble shoot financial problems that are unique to a medical practice. Therefore, become involved in the business of your practice. Your financial success depends on it.