The Five Steps to Running Successful Medical Aesthetic Practices

By Yasmin Khan (Aesthetic Dentistry Magazine 2009) author Simple Steps to Building Million Dollar Cosmetic Practices

New research from MINTEL (Mintel is a worldwide leader of competitive media, product and consumer intelligence) in conjunction with the BAAPS and the Harley Medical Group** finds that British consumers will undergo an estimated 690,000 cosmetic surgery procedures this year alone. This is an uplifting increase of 40% on the 493,000 carried out last year and up some 240% on 2001 figures. What is more, this year Britain is set to shell out £539 million on various cosmetic enhancements, ballooning 50% on 2005 figures and more than four times (338% increase) what was spent in 2001. The report states that acceptance of cosmetic surgery and non-surgical procedures are growing within the British psyche and are certainly reflected in the increasing number of cosmetic procedures being carried out in this country.

With these statistics, it is not surprising that everyone, including GPs, dentists, nurses, dermatologists, surgeons, venture capitalists, foreign competitors and beauty salons are entering this arena to capture their share of the growth. Since there is little barrier of entry in the non surgical arena, most new suppliers of medical aesthetic services are entering this area resulting in a dilutions of the market potential for everyone. Until there is concrete regulations as to who is qualified to provide non-surgical treatments to the UK public, the growth of supplier of non-surgical medical aesthetic services is rising  at a faster rate than the growth of the non surgical cosmetic market creating fierce competition among suppliers. Most new entrants into the industry quickly realize that attracting customers is much more difficult than they expected and promotional means such as advertising is expensive and produce very little result.

So how does someone enter the industry and make a go of it without risking failure and disappointment? In my book “Simple Steps to Building Million Dollar Cosmetic Practices” I highlighted that many companies such as MAC Cosmetics, BMW, and Microsoft are operating in very competitive industries and have achieved great success by outperforming their competitors. These companies were able to achieve their incredible success by honing in on: customer’s needs, customer relationship management, improving the quality and expertise of their workforce, introducing innovative system and processes and guerrilla promotion. In the book, I pointed out that very few clinics are operating efficiently since staff members and clinic owners continue to operate as if they are treating NHS patients. Therefore, I believe that a newcomer can enter this industry and not only succeed but make a lot of money by developing a strong brand identity of excellence commanding  premium pricing when others are discounting their treatments. This can be achieved by building an emotional connection with your customers through a Relationship Marketing Strategy.

The discipline of Relationship Marketing is very complex and therefore, I simplified the discussions by grouping the topics into five core areas as follows: Procedure, Customer Relationship Management, Staff Development, Systems and Processes and Promotions.  There is interdependence among the different areas and inefficiencies within each area will lead to poor financial performance and ultimately business failure.

Procedure Offering- Most patients that you consult with will come to you because they have a desire to improve their appearance. They may ask for a particular procedure based on the most recent article they read, internet research or something they heard. However, they are looking at you for advice and they expect that you have the expertise to improve their appearance. Reacting to a patient’s request without discussing their expectations and developing a comprehensive treatment plan, will most likely lead to patient dissatisfaction, jeopardising the long term profitability and strength of the business.

Unfortunately, most clinicians are not skilled in mapping out a treatment plan since they are not trained to assess the face. Most clinicians depend on the customer to tell them what to do.  Also most medical professional are not trained to sell solutions. They are very reactive to patient request. This is a weakness in the market that you can capitalize on.

When I am working with a clinic, I emphasize that the clinic sells solutions and not products and procedures. I breakdown the entire facial aesthetic market into target groups as listed below. The objective is to predefine the range of problems associated with each group. Identify the best combination of treatments based on the patient’s price sensitivity and the results wanted. The chart below is a simple example of the analysis we advocate when selecting procedures.

The chart demonstrates the following:

1)     One treatment cannot provide total improvement.

2)     As one ages, you will need to combine treatments to provide overall improvement of the face

3)     The treatments for the target group are not mutually exclusive.  As one ages, one will  need more f treatments to achieve overall improvement

4)     A clinic does not have to provide a wide range of treatments to offer complete solutions. The clinicians needs to know how to assess the face and he/she needs to be skilled in a group of core procedures which can be combined to improve the patient appearance at whatever stage they are in the ageing process.

Had the clinics who provided the Isolagen treatment conducted an target group assessment, they would have concluded that the benefits of the Isolagen treatment was not unique and that by combining a group of existing treatment, they would have achieved superior improvement at a fraction of the price they charged for Isolagen. These clinics would also have satisfied patients instead of patients who feel cheated and disappointed. Introducing new treatments without identifying its benefits and value to the end consumer is a sure fire way for practice failure.

Customer Relationship Management

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Businesses will not engage in a customer relationship strategy just to be kind to their customers.  Business that relies on repeat business and customer life-time value know that customer relationship management is vital to their long term revenue growth and financial success.

I hope that the example proves my point of the importance of CRM for the medical aesthetic clinic.

First year financial projection for six business units may look like this.

This is a projection for a part time dentistry clinic where the contracted nurse works two days a week treating at least 7 patients in an 8 hour session. The clinic processes at least 17 patients a week and most patients are treated by the nurse and the remainder are treated by the dentist. The forecasted revenue is approximately £167, 000. We spent approximately £36, 000 in promotion which included monthly seminars, targeted advertising, referral program, promotional mail-out and loyalty programs over the year period to generate £167, 000.

With an effective CRM strategy, the revenue should double in year two since the strategy is focused on keeping existing customers returning to the practice and purchasing more service. In essence, this business should more than double its income since the first year clients will return at least twice and purchase more procedure. The £36,000 promotional budget will remain intact and is used to attract new patients into the practice through seminars and targeted advertising. Year 3 revenue forecast should increase by at least 50% with no further promotional expense.

Most practices fail to plan and never reach year one’s objectives. Lack of planning and no strategy outline will result in failure or performance stagnation.

Staff Management.

If you are going to run a successful and profitable business, you need competent people to manage the business while you are working. Staff selection is crucial. Before you hire someone for a particular position make sure you know what skill is needed for the position. Do not hire someone because they have prior experience working in a medical aesthetic practice. They could have worked in a totally inefficient office, bringing no value to your practice. Clinics loose thousands in a day due to inefficient enquiry management and inefficient patient processing. Your staff needs professional training in this area.

You may want to refer to my book “Simple Step to Building Million Dollar Cosmetic Practices” for guidance on how to define roles and interview new employees.

System and Processes

Since most medical practice fail to plan, it comes as no surprise that they have no established system and processes for daily management of the business. Well defined systems and processes will improve employee efficiencies and supports the CRM strategy for customer retention.

Some of the systems that I have implemented in practices are as follows:

Telephone Answering and Response to Common Questions Protocol, Pre-Consultation Protocol, Consultation Protocol, Internet Response Protocol: Follow-up Protocol, Handling Complaint Protocol etc….. Organization and efficiency is the epitome of professionalism. Professionalism within the entire organization will make customers choose you as their clinician. How often do you select a disorganized company over a professional one to do business with?

Promotion

Most clinicians who enter aesthetic medicine take a particular course and go straight to promoting themselves through advertising ignoring all the other aspect of business. Very rarely does this approach work and if one continues in this fashion, promotion cost will continually rise and (ROI) return on investment will continually decline. What types of promotion works best. It is hard to say since one type of promotion may work for some and not for others. The best approach is to develop your marketing plan which may consist of the activities listed in the chart below. Evaluate the promotional activity as shown. Do not look at response only. Track the activity to booked procedures. Evaluate the results quarterly and shift expenditure to more profitable activities. I am not an expert in this area but relying solely on advertising to attract new customers into the clinic can totally wipe out your annual budget with very little to show for it and no customers.

In summary, I feel that as new medical aesthetic suppliers enter the industry in hordes, the need for planning and well defined strategies is a necessity to protect ones investment and ensure ones long term survival in a very difficult and complex industry.

If you require help in defining your strategies, our two day marketing course is designed to give you the tools to develop a complete business plan for success. To find out more about K-T Training and the range of technical and business courses we provide to cosmetic clinics and doctors, call 01793 323786 or visit our websites for botox training www.kttraining.co.uk and www.k-tsolutions.com for cosmetic practice development and consulting services.

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