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Med Spa Success Strategies
How to Upsell in Your Med Spa Without Pushing (The Key to Higher LTV)
00:27:59
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- [00:06]
A
All right, welcome, everyone. I just wanted to give a major shout out and some credit to Lauren and one of the things that I'm, I'm so excited about just her role on our team and this is one of the reasons is I went through this slide deck with her and I hope you all feel this and see this in the content. We really think a lot about the stuff that we're putting out. We're not just trying to check a box. We're trying to make sure that we're delivering maximum value. And so major shout out to Lauren for looking at this and making some challenges to my assumptions. I think it helped us clean up this presentation and get in a better place. So we'll start there. But today we're talking about a potential paradox in marketing for your med spa. And the paradox is when pushing too hard to achieve high initial visit revenue can potentially cause problems for your business. So that's what we're going to be talking about today. We hear a lot of talk in the med spa industry, in the med spa space about maximizing initial visit revenue and words like cross, cross selling and upselling. We've talked about this in other episodes, but what does this really mean? How do we balance our need to achieve good sales numbers and growth in our businesses with also treating our patients well and getting high customer satisfaction that leads to best case scenarios in terms of retention. So just to simplify this, right, our goal of marketing is to maximize the differential between the cost to acquire a customer and the lifetime value, which is how much the client spends over the duration of time that they're a client, making that gap as big as possible while also reducing any short, any sort of short term negative cash flow impacts. So what do I mean by short term negative cash flow impacts? Again, I use it as a reference a lot, but the book MedSpa Confidential, the authors talk about spending 300 in advertising to get a Botox client who spends $400. The problem with that is after you paid $300 to acquire the client and the product costs, you're losing money on the initial visit.
- [01:52]
B
So.
- [01:53]
A
So I would say our goal in summary is how do we maximize that gap without creating short term negative cash flow pressure. But we want to do that without forcing initial visit revenue that causes issues with patient retention and satisfaction. So as Lauren pointed out, a good initial visit revenue is a good thing. It's generally indicative of good quality clients that are spending lots of money that are satisfied and are and are the types of clients that carry, you know, the top 20% of your spenders are carrying a big percentage of the revenue. So we're not saying that these things are not correlated, but we're going to talk about some things that you have to probably do, making sure that you're understanding your market, what is realistic in terms of the budgets for your clients and understanding the trade offs that you make here with some of the decisions you make around how you incentivize initial visit revenue.
- [02:38]
B
So I think a big thing too, before we move on real quick, Ricky, is when we're talking about understanding your market and understanding the types of people that are spending money with you. It's. It is so important to know where you live, what's your median household income, what are people actually willing to spend in your area? Maybe 800 on the first visit is a really solid initial visit revenue based on how much money people make and how much they're comfortable spending without feeling salesy. And maybe if you're in somewhere like a California market, which one of our clients that we just audited was their initial visit revenues are like $2,500. And maybe that's different too, based on the average household income. So it's understanding your type of clientele to not just, you know, what you want to be pushing.
- [03:17]
A
Yeah. Was that initial visit revenue like their higher end clients? Right, Lauren? Like the top end clients were 2500. It wasn't like their actual average. Just segment.
- [03:25]
B
Yeah, yeah. The average would be insane.
- [03:27]
A
But yeah, and yeah, that's. That is kind of an interesting thing to think about. So this conversation was partially spurred, and I say partially because there's, we want to talk about the underlying principles, most importantly here, but it was partially spurred on by a conversation we had with a client that's in Georgia, Duluth, Georgia, and the idea that, hey, even if our clients are happy, they're thrilled with the service. But the byproduct of that was that they spent like $1,000 or $1,200 on the initial visit and it was out of their comfort zone. Out of their comfort zone. There are implications to that because if, if somebody's going home and then their spouse is kind of frustrated that they spent that much money, they don't necessarily have the budget. Budget to spend $1,000 every time they go to a med spa. But they felt excited about it in the moment and did it, you're going to see that reflected in your retention numbers. Because even if people liked the result, if they can't afford to spend a thousand dollars three times a year, they're not going to be able to come back. They're, they're just going to end up having to live with the wrinkles or pursue alternate options. So you do have to be careful about knowing your market to some extent, as Lauren said. So avoiding the sticker shock effect I think is important when people can't afford the service. So, so if people are willing, like Lauren just mentioned our client in California that she audited where these top spenders are spending 2, $3,000 potentially on a first visit after responding to maybe something simple like a Botox advertisement, those people were probably doing so willingly and eagerly, right? They were the people that had $2,500 to spend. So that's what we're going to talk about today. We don't want to get rid, we don't want to minimize the number of people that are coming in that are high quality spenders that can spend the money. But we don't want to try to force every one of our clients to be that high spender. We, when not every client has the capability to do so. And you want to avoid doing that via high pressured sales tactics because you don't want to be the picture here of the person that's dishing out a bunch of money but looks uneasy about doing it. Right. I'd rather have the clients coming in, spending four or five hundred, happy, thrilled with the results, feeling like they got the options clearly outlined to them and they ended up spending at a level that they were comfortable with and now we're going to retain them. They might not be our top spenders, but Maybe they're spending $1,1500 a year and they're with us for years to come. Right. We don't want to exclude those in most med spas. So I think that's the balance that we're trying to strike. This episode is brought to you by MedSpa Magic Marketing, my agency. We help med spas and aesthetics practices grow with more effective marketing strategies. And I know that's a vague phrase, right? That's a vague claim. So I have an offer for you. I offer this to any new prospects if you're interested in exploring any of them. Another marketing option, a new agency, or just getting into Facebook, Instagram, Google Ads for the first time. I'd love to show you why we're different, what we're doing for clients. And we can do that via a one and a half hour planning session where I'll outline a specific marketing plan and I'll give you all of the blueprints that we would implement if we were to do business together. Now you can take that, use that on your own, hire someone else to help you execute it or work with us. We really don't hold anything back on that strategy call. And I think you'll have a lot of confidence in how you manage your marketing investment moving forward, understanding some of the nuances that can help you implement more efficient, effective marketing strategies for your business. So if you want to do that, you can go to medspa magicmarketing.com so jumping here to us, the staff dilemma. This is something that I'll give an example of how we run our business as a marketing agency that hopefully is relevant and demonstrative of what we're trying to explain here. So selling versus serving. What is the right way to think about cross selling and upselling? And this is one of the things Lauren pointed out. We do want our providers educating our patients as to the options that they have available. It is an absolute mistake to just come in and like give someone 15, 20 units of Botox because they responded to something like a 20 unit of Botox offer. That's a mistake. But I think the way that you incentivize this needs to be carefully thought about. For example, in our marketing agency, when we're coaching and guiding our clients, we are giving them an outline of all of the options that are on the table and we're giving them a blueprint that we think makes the most sense for them to achieve their result based on the trade offs. And for some people that means knowing when what to say no to and when to say no to it and why. So I think as a med spa, shifting from a transaction transactional focus to an educational focus ensures that you're still presenting people with the options, but you're not doing so in a way that feels high pressure. Because if it feels high pressure at any point, the challenge that I have with this is as soon as you start using sales incentives in your business, any business, but in your med spa, I always say it doesn't pass the smell test. I think people can smell it on you at times. So if the incentive is that I'm going to make more money if I sell more of this, the natural byproduct of that for most people is I'm going to be a little more pushy than I would be if my job is to just educate them. Now that's a fine balance to strike. You have to figure this out for your med spa because you also don't want to go the opposite direction. I Think, Lauren, this is what you mentioned, where people are so hesitant about selling that they're not actually even giving people the education by showing them the other options. Right. Was that kind of what you were. You were worried about with when we were talking about this slide?
- [08:28]
B
Yeah, I think we see that too often, especially with newer providers who aren't as seasoned at knowing the difference between the two, where you'll see too many times that somebody comes in and it's somebody who maybe has had Botox before, has a really strict budget that they want to stay on, and then they end up getting only what they want because we don't have that good balance of sales versus education. And then they leave, and two weeks later, you get messages with how frustrated they are with the result it didn't meet their standards, things like that. So I think there's a really fine line in terms of which side of that you're playing into. And one thing I was going to share, too, that Ricky and I talked about is I try to go to a lot of med spa consults just to kind of be on top of all the things. And last year, I did a laser hair removal consultation at one of the bigger laser hair practices. And it was so interesting because in the console, they didn't even have a provider talking to me. Like, it wasn't even somebody who was actually going to be doing the treatment. It was just a salesperson. Like, literally that was their whole job, was to sell the whole packages. And she took me into a private consult room. She had this whole thing lined up with a PowerPoint and a slideshow and everything. And it didn't feel super educational. It felt very salesy. But in the moment, I felt so pressured to just do it that I ended up signing the thing, like, with no intent going in there, but I ended up signing up for it. And then I left. And 30 minutes later, like, oh, my God, I just spent $8,000. Like, I'm gonna get killed for this. So I ended up calling back 30 minutes later, and I was like, I don't really have that to spend. Like, I need to cancel what we just did. And it was this whole big process. But anyway, I think that's where 30 minutes later, I was not happy. I did not necessarily want to go back to that place and see if there was something more affordable for me because I got roped into the sales thing. So I think it's finding that balance of how do you sell, but how do you just sell? Simply educate with the sale.
- [10:16]
A
Yeah, Translate that into, like, you did that for somebody that was getting Botox filler and like micro needling and you convince them that this is the greatest thing since sliced bread. So they sign it in the office and they do it. Maybe they're even happy with the results. You have to understand the trade off is if you aired even slightly on the side of being high pressured with your sales tactics. One of two things, that person's either going to feel it, you're going to erode trust and you're going to, that's going to lead to lower retention numbers. Or two, even if they were thrilled and they don't feel that way, the, the fact that they spent that much money means they're going to feel very uncomfortable about future visits knowing that that's the likely outcome. So you have to understand there like that there's a little bit of given getting give with some of that. And so the other thing is like with the educational side, I think you can try to standardize this in a way where you're incentivizing the actions potentially and not the outcome. Lauren, I don't know what you think about that, but that was one of my thoughts, which is essentially can you incentivize your providers to make sure that they're presenting the options and presenting the additional things that someone could do to help them achieve a superior result without necessarily incentivizing the financial outcome of the transaction? I don't know if maybe that's the right approach. But again like, and I know this isn't as a marketing agency, as soon as you have a sales team, we don't have a sales team right now, I'm our salesperson. But if we have a sales team at some point, agencies that do have sales teams, as soon as you incentivize based on commission and that person has like all what they're trying to do is to get you to buy something you might not need or want. And even if that line is like 10 or 15% over where it would have been if they were just speaking from a standpoint of education and, and trying to give you all the information to make the best decision, I think people can feel that and it starts to not pass the smell test and you create problems on the back end. So I think you need to figure out how do you make sure that you educate your prospects so that all of them see the options that they have to achieve a better result. All of the cross sells and upsells are on the table, but they're not presented in a way that's Sales.
- [12:10]
B
So I think the other thing too with that, that can be a helpful tip for providers is like Ricky said, always be presenting the option to people. And you don't have to make it a, you have to do this today. Right? Like there's nothing that says you have to get all five of these things today to get that result. It can be a long term process that you lay out in a long term goal. So I have one client who, we talk about this all the time. They have the most phenomenal retention rate of any client we have. Everybody loves them, but their initial visit revenues aren't insanely high. But they have people who come back constantly. Right. So people might be spending like $600 on that first visit. And the way that they do their consult process is they build a treatment plan. They don't just build a get all of this right now. So it's somebody who might come in for a Botox promo. They end up upselling them from 20 units to 60 units. So they still did a great job with the initial upsell to get that initial result. And then they laid out. Okay, well, you might be concerned with some sunspots and you might be concerned with your size of your lips or the volume. Maybe in, you know, six weeks come back and we'll treat those sunspots with this laser. Here's a pamphlet you can take home to learn more and we'll send you some emails and texts about it and then maybe in six months then we can treat the lip issue. So it's making that plan of how it can lay out to make sense with what the patient is comfortable with too, rather than just, hey, right now you have to do all of these things to address all of your concerns.
- [13:34]
A
Yeah. And I think that implicitly allows you to have the conversation about budget. Right. With anything we purchase, budget is part of the thing. Like yes, if everybody just got everything they wanted, they would come to your med spawn and spend $6,000 every visit. But money is a part of this. There are very few people that don't operate with some sort of constraint on budget. Right. If I were to ask people, well, what do you want in a house? And there was no constraint on budget, then we'd all have 27 bedrooms, a swimming pool, a ballroom and nine other things. Right. There's a constraint which is the spend. So I think it's okay. You don't necessarily have to have that conversation outright, which is like, what is your budget? If you're presenting options, people will self sort based on budget. I think the other thing we've learned from clients, and this kind of relates to some of the discounting strategies that we recommend to attract new clients. But at the end of the day, we want to feel good about our interactions we have with our clients. And so shifting from a sales pitch to an educational, focused approach, I think allows you to check that box of feeling good about what you're doing and how you're serving your clients. I also think it's the best way to maximize ROI and lifetime value. It's hard to measure that, but I think just in theory, that makes sense. If our clients trust us, we're giving them transparency around their options and they're able to get what they want within reason, then those people are more likely to stay with us long term. So in terms of implementing three things. Identify the need and establish the baseline treatment. Right. This is where we talk about not rubber stamping, which we'll get to in a second, but you don't need to rubber stamp whatever they want. Right. You can come up with what is the baseline treatment plan that you feel comfortable with moving forward on that addresses like their minimum viable option, essentially. And then number two presents the options with a layered blueprint. So, hey, this is the core need. You came in bothered about your 11 lines and your crow's feet. Here's the bare minimum I think we could do today to take care of that so you feel good about the outcome. If you want to go one or two steps further, here's what one step further looks like. Here's what two steps further look like. And then you can also be transparent. Number three here is be transparent around the outcomes. If we do option A, this is what you're going to achieve. If we add in option B, this is the additional benefit. And if we add an option B and C, here are the additional benefits that, that you receive as a result. Don't over promise and under deliver in that regard. Like, we don't want to talk about this thing like it's the greatest thing since sliced bread. And even if it provided a 20% boost in the result or solved an additional problem, the client feels less than satisfied because the pitch was a little bit too overhyped. So I think that's where we, that's where maybe the balance is between how we educate prospects, giving them something that addresses their core need, and then the upsells and cross sells are presented with full transparency. Lauren, anything to add to that?
- [16:11]
B
This is really minimal, but I think it goes into it. Well, I have a couple of clients with before and after photos that are on a wide spectrum of results. Right. So you might have one patient who is before and after is absolutely insane and it might be because you only did that treatment or where I think a lot of providers fail is they got a stacked modality but you only use it to showcase results of one of the treatments. So for example, if you're coupling like a halo and a BBL or a halo and a microneedling, you're going to see a better result than if it was just one versus the other. And I think a lot of providers will try to sell a halo, show that before and after of everything and then that's where that comes into the over promising and under delivering of well that was a stack treatment that wasn't just that by itself. So I think it's being transparent with your before and afters too and really with what the service is going to achieve. You like it's not going to 100% kill everything. Right. But you might see a 90% overall improvement, things like that. So just being super honest and educational with how it works too.
- [17:14]
A
Yeah. And again applying this to us, we literally this is like how we structure our programs to clients. One of our core values is we want to do what's in our clients best interest, free of self serving financial impact. Personally I think that's a great core value for your med spa to adopt because what we've done then is we know hey, our core need. This is if, if the goal is I want to grow my business and I need more patients to do that then the core need generally is going to be probably meta ads, Facebook and Instagram ads with a really good marketing automation system, sound strategies, knowing what to avoid and where to spend our dollars. That doesn't mean we rubber stamp somebody coming and dictating how we're going to implement them. Facebook ad strategy. But we're addressing the core need and then we're giving people transparency around hey, the next layer up is probably to add Google Ads into the mix. You're going to get good results. But here's the downside of doing that too early. Here's the cost, here's the opportunity cost. Right. Like in our case. But, but for you as a med spy, I think that's a good blueprint to follow. And then being transparent with what the option B and option C actually get you when you add those on.
- [18:16]
B
Yeah, I think it brings up an interesting conversation too that I've been talking to a lot of people about lately is memberships and membership models And I think it just kind of plays into it where I think that's a huge thing. People are trying to sell, sell, sell, sell, sell is their memberships. Because everybody wants that recurring revenue model. It's helpful for all the business, you know, implied. But I think that is where people can see well, well that doesn't make any sense. Why would I spend 150 bucks a month for that? You know, that's the membership model maybe where you spend 150amonth and you get this free facial and then everything else is just discounted. Or there's the membership model of hey spend 99amonth, it banks towards your treatment and you get 10% off all injectables in the future and 10% off facials like that actually makes sense. It doesn't take a genius salesperson to sell that because it is worth it. So I think that is a big thing too when you're thinking about like a membership model or things like that of how to structure that what actually makes sense for the person buying it, not just how can I make this make sense to sell it.
- [19:14]
A
Yeah. And I would even add to that. This is another one of those places where you can let people self sort because there are going to be certain people that are going to be happy clients. They're going to get a good result. And the math might not make sense to you, right? You're like, well why don't you just join our membership program because you're going to save this much money when you come in next. But for certain people, they just don't want to have a subscription, right? You see commercials, I don't know if it's like rocket money or whatever is the thing where people are paranoid with like the overwhelm of subscriptions. We're all signed up for like six things we don't even remember that we're currently signing up for that are draining our bank account. This is another one to the list. So certain people, they just want the flexibility. If they change their mind. They might have no intention of changing their mind. But if they want to change their mind and go to a different med spa in two months, they want the flexibility. So make sure you're aligning your incentives so that you're getting people like the incentives make sense, right. Like Lauren said to go the membership route. But don't get frustrated just because every client doesn't want the membership. They still might be good clients that stick around for months and years to come. They might not just want the recurring thing coming out of the bank account. They might feel more comfortable coming in, spending 15% more when they do, but not having to worry about the money coming out of the account in the interim. And that's okay. So that's why I talk about letting people self sort, educating them and making sure that they can make the best decision for them and their needs within their budget. Hey there. Wanted to briefly interrupt the episode to make a quick ask. If you're a podcast listener, it would mean the world to us if you'd leave a review for the podcast, whether that's on itunes or Spotify. It's something I hadn't really remembered or thought of asking for, but it does help us show up more frequently so that we can reach more people, people with the information that we're providing. So it mean the world to us if you'd leave a review on itunes or Spotify. If you're listening on audio, if you're watching on YouTube, make sure to hit the subscribe button so you're in the loop for future videos and you don't miss any of the content that we're putting out. So I think the outcome of making this shift is that you have satisfied patience and it does maximize lifetime value and removing pressure builds unbreakable trust. I I think this is just a fundamental shift in how you approach sales that is transformative for your med spa. Like if you're educational, I always say you like I said it before, people can smell it on you. As soon as people feel like they're being sold to erodes trust and it leaves a little bit of an ickiness leftover. It also, like we said, it naturally lets clients self sort. So the people that are going to come back and spend $1,000 every year with you and be perfectly happy that they just got those crow's feet taken care of. They're able to be clients that don't feel like they're disappointing you. Every time they come in and spend $300, you're you're able to give them that service. Those are clients you probably still want and then you still do. Again, let the client self sort on the higher end as well. The people that are comfortable spending because they want the premium package and they want the additional add ons when they have transparency around the decision, you're still going to have a good chunk of people that do that and we can be excited about that as well. So a disclaimer from an ads standpoint we wanted to talk about because Lauren mentioned you definitely see like when we run our ads for Clients, we definitely see that it correlates. Right. The higher spending clients on the initial visit are generally the clients that are retained that spend more money long term and the people that are coming in spending really low dollar amounts, it's probably indicative that they were just coming in for a rubber stamp treatment. They wanted to buy 20 units. They wanted to tell you where to put it. They wanted to move on to another med spa three months from now. So I would say going in, if you're running ads like this, just know that that's the case. Hey, those, those people that are coming in asking for rubber stamp treatment at the baseline units, I don't know that there's going to be a lot of saving that. We always say you're with these types of strategies, you're sifting through some dirt to find the gold. Let that kind of be what it, what it is. But tied to that, as Lauren mentioned, we don't want to rubber stamp treatment plans. You still get to guide the treatment. Even the most basic version. Like for our core service, we don't let clients come in and say they want to. Like, if you came to us and only wanted to spend 500amonth on your ads, it's not going to make sense. We're not going to be able to get you the result you want. So we'll turn you away. We have a minimum ad spend for our clients, and that's like you having a minimum unit amount. You know that they need to buy a certain amount of units to achieve the baseline result. It's okay to adhere to that, to stick to that. Was that the gist of that, Lauren?
- [23:11]
B
Yeah, absolutely. I have a lot of providers that will simply turn somebody away if all they say is, I want 10 units and I know what I need and XYZ. But you know, then they're going to come back in two weeks angry about the end goal of the treatment. Right. So definitely that is.
- [23:24]
A
Yeah, yeah, you're allowed to set what that core baseline offering is. And if they say they want crow's feet and elevens, you get to dictate the amount of units that they're going to need to take care of that problem, not the client. So you can use that. Like, that might be a good reason, like Lauren said, to just let them go see another provider. Let them know that you're not a fit, that, hey, we, this is not how we essentially do business. You got to be careful with those conversations. You don't want to. Any advice on that, Lauren? Like, how do you walk the Line between if you're gonna, if you're gonna tell people, hey, if you're coming in for me to rubber stamp a treatment, I'm not the provider for you, how to do that without risking any sort of negative blowback or bad review.
- [24:00]
B
I think my providers just say it really honestly and it kind of goes back to the educational piece of when you educate people, trust you and it goes to, hey, I know you're not going to get the result that you want and I don't want you to spend any money and leave here feeling unsatisfied, even if it's your budget. But I don't think you're going to get that result that you want. I would rather you feel comfortable about where you're going to go and go somewhere else. A lot of times I think where the pushback is is people will say, oh well, I just went to so and so med spa and they gave me 20 units and it worked perfectly. I love their result. Well, that can be a different conversation of you don't know how they're doing their product and you're not bashing them, but you're having an honest educational piece of how people can do things differently. So I think it just goes back to that main core principle of educate people on why that's the case and proceed from there. It's never a well, you must leave right now. I'm not treating you. It's a very, you know, still the consult process, a 30 minute, you know, it could be a whole process, but it's going through each of those things. Explaining why not just, you know what and moving from there.
- [25:05]
A
Yep. Okay, so, so to wrap this, you good? Can you hear me? Lauren? I lost, I lost signal there for a minute. Sorry.
- [25:22]
B
Yeah, I can hear you.
- [25:23]
A
All right. So the kind of key takeaway here is prioritize patients long term financial comfort over your short term sales goals. Do what's right by your client, present them with transparent options, let them self sort and make the decision. I really think that that's the best way to grow your med spa. Understand that there are going to be some of those people that are coming in spending $300 every time they come in, $400 every time they come in. Great. And then you can be excited about the clients that are coming in, eager and willing to spend fifteen hundred dollars as well and understanding there's a range of outcomes. Again though, know your market. If you're leaning more toward, even if you believe in the service, you're leaning toward higher ticket services in A market that can't sustain it, you do risk the retention number. So in those cases, like, knowing your market and being a little bit more cognizant of the budget of your prospects is probably important. I mentioned earlier that you can do this kind of implicitly by just going through a treatment plan and letting people decide, like, well, if, hey, if that's my budget, I'm going to end up choosing the core. Or you can do that explicitly, like, hey, what, what's within your budget? How much do you want to spend on your skincare every year? Let's come up with a plan that hopefully achieves your goal within your budget. It might not do everything that you want, but we'll see how close we can get. And I think it's okay to have those conversations at times as well, because at the end of the day, if your clients are happy, they felt like they got a good service and they're happy with the result, those clients are going to stick around. And the goal here is we're maximizing lifetime value, not trying to squeeze every dollar we can out of the first visit of a new patient to our med spa. So educate, don't sell, but make sure that you do have incentives or some sort of accountability process to make sure your team is doing the educational component. Because the opposite of this is you err on the side of your providers are just rubber stamping treatment options that they're not giving people a full picture of what else they could be doing with your med spa and that leads to financial loss. And the good thing is these two things, when they're done well, are tied together. If you're doing things that are leading to financial loss at the expense of client education, then you're leaving. You're letting clients slip through the door that could have achieved a better result and were willing and able to pay for additional services, additional units, add ons, upsells and cross sells. So again, it goes both ways. I think when this is done well, the best interest of your patients and the best interest of your med spa are perfectly aligned. And I think that's a good North Star and a good goal. Lauren, anything to add to the discussion today? Anything we talked about in our preliminary conversation that we didn't cover?
- [27:42]
B
Nope. I think that's great.
- [27:43]
A
Well, thank you all. We'll see you on the next episode.