“We can’t compete with the practice down street!”
Ever heard or thought that phrase? It’s something we’ve heard many times from our 2,800 aesthetic medical members. Just like any other business, we’re all concerned about our competitors and new entrants to this space.
There are many ways that aesthetic practices can easily differentiate themselves. Some invest in their unique brand or position themselves as ‘experts’ in a particular treatment or procedure. Others become first-movers with new technology and place a foothold in the market for new treatments. A few even have the capital to make large investments in marketing, becoming well-recognized with billboards, television, radio and social media.
However, not all of us have the resources to make these kinds of investments in our brand, equipment, and marketing. In contrast to the providers above, we’ve seen many smaller businesses take other measures to ‘compete,’ which, although seemingly strategic at the time, have been detrimental to their businesses. You may not be the biggest, most recognizable practice on the block, but you can take steps to ensure that your actions are to your benefit, not your neighbors’. Here are three ways your actions could be helping your competitors get ahead:
Getting into price wars.
Take Botox for instance. The price of Botox varies significantly between different types of practices, different regions, and different providers. If your margin on Botox is already slim and your neighbor discounts to a point where the treatment becomes a loss-leader, I wouldn’t consider trying to match their price, unless you are confident that you can provide additional services that you can easily cross-sell. Focus your efforts on another aspect of your business that will draw patients in—this could be your stellar service, your provider’s excellent credentials, and or your amazing patient outcomes. Instead of reducing your price, put more emphasis into sharing your successes and marketing your reputation through before and after photos, testimonials, positive patient experiences, and ratings & reviews. Worried that your pricing will deter prospective patients? Price transparency, specifically online, also guarantees that the patients coming to you will generally be less sensitive to price when they call you for a consultation. The same goes for using Groupon. I know a few practices who’ve been successful with Groupon, but I’d advise that you use caution if you’re going down this path. Without the right support and follow-up system in place, Groupon patients could easily disappear after they’ve redeemed their discounted treatment. It is widely known that Groupon requires that you discount your product or service by up to 50% and expect fees of 20%-60% of your revenue. In most cases, this may drive one-time, bargain-shoppers into your office at a MAJOR expense to you. Don’t reduce your margin so significantly for so little return! Your loss is their gain.
Not knowing your numbers.
When you do a marketing campaign, do you understand your ROI? In our recent 2017 annual survey, 91% of our participants stated that word of mouth was a major source of patient acquisition. However, 49% said that they still used traditional mediums such as radio, TV, and direct mail. For every campaign, do you understand your cost vs. your anticipated and/or actual results? How are you tracking consults and conversions (or are you)? Each of these questions are critical to understanding where your marketing dollars are most effective. Within our network, we’ve discovered that very little marketing spend is well thought out or lacks strategy backed by forecasted numbers, therefore a large amount of money is wasted on ineffective initiatives and those that produce zero ROI. Keep a constant pulse on your marketing projects and associated numbers. Educated marketing decisions can save you thousands and make you millions AND position you for maximum success!
Not knowing your numbers.
Yes, I did just repeat myself. However, this is about your operating expenses and overall financial picture. When you designed your business plan, you should have done several proformas or projections on your profitability. In addition to your marketing dollars spent (see above), you should clearly understand your operational expenses (personnel, cost of goods, etc.). When someone comes in for a laser treatment, you should know exactly how much it costs you to operate that machine (consider consumable costs per patient) and perform that treatment (cost of personnel) and the revenue you’ll produce from that treatment. Knowing these numbers will not only help you to avoid waste, but will also help you to identify your highest revenue and profit-producing treatments and services so you can focus your marketing dollars (see above) correctly! Not knowing your numbers can quickly drain your bank account, giving you less flexibility to invest in new marketing, technologies and ways to differentiate yourself which essentially, is a bonus to your competitors!
Looking for help with your numbers? MedResults Network is partnered with consultants who will review your financials and help you become more effective and efficient in the day to day operations of your business. Contact us at email@example.com.