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Foreigners. Welcome to video 2 in our 2026 marketing series. I think this is maybe the most important video in this series. Now we have tactical strategic things that are going to really show you the implementation frameworks that we use to generate results for our clients. But I think without the conceptual knowledge of why this stuff makes sense, you're going to continue to have uncertainty around your marketing investment. So I really think that this one doesn't have the flashiest title, but I really believe this might be the most important video in the series. Today we're going to be talking about discounting trade offs, ROI and budget prioritization. And really this Med Spot growth accelerators formula title I think is very fitting because this is going to help you understand the right levers to put levers to pull to generate the results you're looking for from your marketing investment with confidence. So first thing, I just wanted to address this as a separate kind of item precursor to the conversation today, which is just the debate on discounting. So I have a whole video on our YouTube channel where we talk about the debate around discounting. Because one of the things you hear a lot from consultants is that discounts will attract the wrong types of clients, that you're cheapening your brand. And the reality is that's an incomplete analysis of what's going on here because when you discount and run promotions specifically to attract new clients as a one and done as you up the ante on your offer attractiveness, you lower your customer acquisition cost. And the opposite is true. Right? If I have less attractive introductory offers to get people to visit my med spa, I'm going to pay more to acquire a client. So at a surface level, that sound bite sounds good, but it doesn't explain the full context and the trade offs of the decisions that you're managing. The other thing that I think it misses, which is this, it's really the opportunity to create perception through experience and to prove your value. If we really believe we're going to provide an exceptional service that's going to set us apart and get people coming back for months and years to come, then the best way to show people is to prove it and show people by getting their butt in the seat. So one of my favorite quotes in marketing I use all the time is right here from a book called the Advertising Effect. And it's action changes attitude faster than attitude changes action. Right. Going to my next slide here. If I were to ask you your favorite restaurant, you're inevitably going to name a restaurant you've actually been to and that's because engagement and interaction impacts favorability than anything you can do in your marketing message. So make sure you understand the full context of what's going on when you discount. And we're going to go deeper into that right now as we talk about correlation amongst data points. So again, correlation is how certain numbers will move up or down together or in an inverse, right, so in opposite directions. And so these are some very important concepts to understand. And this is something I feel like nobody zooms out to really see clearly. But when I explain it, you'll understand that all of these things are just inherently true and they impact how you manage your marketing investment. Let's go through, I think it's four correlation principles we have here. Correlation principle number one when you're planning your marketing investment is what I just said. The cost to acquire a client will go down, meaning it's cheaper to acquire a client when the attractiveness of your offer goes up. So to illustrate that point, when you run an ad where maybe the call to action is simply to schedule a consultation, in our experience, you might pay $300 or more to get a single client. So for every thousand dollars you spend, you might see only three clients. Whereas if you run a really attractive new patient special offer for a facial, for example, we've had clients that have crazy numbers as low as like 10, 20, $30 to get a client through the door for official. So the basic reality here though is as the offer attractiveness goes up, your cost to acquire a client goes down, which means you see more clients for the same amount of money. Now that's not the end all be all data point, but that is true. So let's go to correlation principle number two. The greater the deal, the lower the average client quality. So when people say you're going to attract bad clients, you're going to attract the wrong types of clients. When you run discounts on average, it is true that you will get lower client quality on average. But the important thing to pay attention to here, what might be catch rate. For example, if I spend a thousand dollars to get 10 clients and only five of them are good quality clients that stick around, well then I have an effective customer acquisition cost of $200 to get those five clients that were the good clients, right? Thousand dollars, I saw 10, but only five were good. So I'll call it five for $1,200 acquisition cost. Now if I use a non discount based strategy where I'm just winning on reputation alone, I might only see three clients from the get go. So although it is true that the bigger deal will on average, lower quiet, lower client quality, it's important to understand that there's a balancing act there and there's a breaking point to the data. So that's something I feel like a lot of people miss in this analysis. That one's really, really important. So let's go to correlation principle number three, which is volume of visits. If you have a service that generally is going to have high volume of visits and repeat retention, it's probably got lower initial visit profitability. So to illustrate this, when we run an ad for CoolSculpting or Emsculpt, let's use Emsculpt because I've got better stats on that one. If we run an ad for emsculpt for our clients, they might pay $1,000 to get a single package sale, but that package sale might be 4 or $5,000 in revenue, which with good margins and low consumable costs if they run. So they have good profit on the initial visit when they sell an emsculpt package. The opposite of that might be Botox. You might break even to acquire a client and service a client on an initial Botox appointment. But generally that is going to have a much longer lifetime value span and more repeat visits. So the services that have higher number of repeat visits associated with them generally have lower initial visit profitability and vice versa. The challenge with the M Sculpt client is they might come in for service and then we might never see them again. Or we're only, we're only going to see maybe a small portion of those people again. So understand that trade off correlation principle number four, the law of demand. I did a whole video on this. But understand this basic reality that if you're advertising a service that's just more expensive in terms of the sticker price, no matter how good the deal it's, it's generally going to be associated with lower demand and a lower response rate. So we can run a really good deal on something that normally costs $5,000 and now we're only running it for three. But that's inherently more expensive than a $300 Botox appointments. So you're going to have a lower response rate, so the volume of leads and patients will increase for lower price point offers. When we run on the extreme, a discount introductory facial, we've had clients do something as crazy as like a custom facial that has a very low consumable cost at $2939, they can see customer acquisition costs that are lower than the price of the facial. So for every hundred dollars they spend, they're seeing three clients, which is really crazy. That's because those low price point offers are going to be associated with more volume. If we're advertising more expensive services, it's higher acquisition cost, lower volume of clients. So understand that as well. So if you're in a position where you need to maximize short term profitability, you might lean into strategies that are different than trying to optimize for volume and long term growth. Hey, practice owners, Ricky here. And if you're tired of seeing your marketing as an expense, it's time to see it as the investment it should be. At Meds Ball Magic Marketing we specialize in driving predictable massive growth. For Medspas, we helped one client generate over 2,500 new clients directly attributed from ads in less than 18 months. And these aren't outliers. This is our expectation. We're HIPAA certified by Compliancy Group, rated a perfect five stars on Google and we provide true consulting and strategic direction to our clients, not just button pushing. If your med spa is able to consistently invest in marketing and advertising and you want a transformative look at the the exact frameworks, ads, offers and strategies that we use for our clients, schedule your complimentary strategy session with me@medspamagicmarketing.com that's Medspa magicmarketing.com so let's go into some big picture perspectives on measuring roi. So let's get really clear on, hey, we're marketing as an investment. We want this thing to produce a return. I'm not doing this as an expense. If this is an expense, we shouldn't be doing it in the first place. And I want this to be as measurable and tangible as possible. But I want to illustrate a problem with a patient guarantee model. So I'm not saying we'll never do this. You all, we're in marketing agency. For those of you who don't know, we might be forced into this at some point because I think these things inherently work because they seem like a risk reversal mechanism. Right. If I'm worried that this marketing agency is not going to bring me clients and they give me a patient guarantee, I've taken some element of risk off the table. But the challenge with that is, is it misaligns incentives. And I'll explain why this is such a problem when the only data point you're looking at our number of patients butts in the seats can't be the only data point that we're measuring for Success because it might steer us in the wrong direction. It might hurt our results by over optimizing for a leading into a leading data point, leading indicator data point. So let's go through two examples. In example one, we have $5,000 in ad spend. And let's say we have $50 customer acquisition costs. So we have 100 bookings. We got 100 new patients on this promo, but they're only coming in for an offer. That's $100, let's say, and that gives us a $10,000 initial visit revenue batch. Right. I had 100 people spending $100, $10,000 on initial visit revenue. And let's say this is for a Hydrafacial or some sort of a facial product where the retention is generally going to be pretty low. Let's just say it's to really ding it. Let's say it's got a 10% retention rate. So that means the lifetime value of these clients is only going to be $1,000. Let's just say it's $1,000 lifetime value per patient retained. So of the 10% that stay, they spend $1,000 with it, with us. Now don't get caught up on the numbers. That's the illustration of the example that's important. What that's going to give us is total revenue of $20,000, which is a 4x return on ad spend lifetime. Right. I spent 5,000 to make $20,000 in lifetime revenue from that batch of clients, but I had 100 clients. So if all we're worried about is client bookings, this is going to look like a much more successful ad than scenario two, that I'm going to say is only bringing us 20 bookings. So that same $5,000 has now brought us only 20 bookings. We have a five times greater cost of customer acquisition, so we're seeing 20 instead of 100. But let's say those people are ready to spend. They're spending a thousand dollars on initial visit, Botox, filler, laser products, whatever it is, they're good quality clients that are coming prepared to spend. That gives us $20,000 on initial visit revenue. And let's say they're good quality clients that retain at a higher rate. And 50% of them stick around. So of those 20, we have 10 staying around long term. So now we have 15 and they spend a little bit more. So it's 1500 dollars lifetime value per patient. Of the ones that do stay, that would mean we had $35,000 in revenue generated from that batch of clients, which is a 7x return on AD spend. So that shows you why optimizing for patient bookings alone can be a mistake and can steer you in the wrong direction by overly optimizing for a leading indicator data point without seeing the big picture. So when we're working with our clients, we're really trying to get a holistic view of what we' so that we can maximize the actual gap long term between money in and money out, not just looking at an initial data point of bookings. For example. Now there's a breaking point in the math. A lot of times those hundred bookings, what we'll see is even with a lower retention rate, we have so many more at bats that that's a better place to spend our ad dollar. So even if the patient quality is lower and the retention percentage is lower, so relative percentage is lower, we're seeing so many more patients that the volume, even though the catch rate is lower, still gives us more revenue. We actually see the scenario one generally playing out better more often than not. But again, it can't be the only data point. So that was to illustrate why you can't look at butts and seats as the only data point. It might steer you to strategies that are attracting the wrong types of clients, strategies that don't lead to retention, prioritizing and promoting the wrong services, et cetera. So I always say this. There are two bad ways to measure ROI as a med spa for most of these services. Now, this is not true if you have initial package sales. So if you're doing laser hair removal, I want to measure the success of the package sale as if nothing else happens. Because it's a pretty small percentage of your laser hair removal clients. They're going to come back for other that are going to turn into a botox client or a weight loss client. I would say just consider that icing on the cake. So if you're talking about package sales, an M sculpt session package, laser hair, package session, something that's like high ticket, that has low retention, you can measure that simply, right? You can look at what did it cost to acquire the client and how much revenue did we generate on the initial package sale. And that can give us a perspective on roi. But for most of our services, retention is a big part of the success of a med spa, right? Getting clients to come back months and years to come for multiple visits. So with those types of services that are reliant on retention, so this would be almost anything your injectors or estheticians do. So aside from like your laser tacks, anything estheticians or injectors do, this is going to fit that description. And the two bad ways to measure ROI are initial visit revenue because it's a very incomplete picture of the marketing math. And I've had people do this and even after I have this conversation, I've had calls with clients where they're still trying to do this. And they'll say, well, we spent, we spent money on the marketing and we paid paid ad spend and we had product cost. So after all was considered, we basically broke even. Or maybe we lost a little bit of money to serve that client on the first visit. Yeah, that's probably going to be the case. The real magic happens because there's going to be a percentage of those clients, whether it's 20, 50, 70%, that are coming back for recurring service. And that builds on the lifetime value, which creates a bigger gap between money in and money out, which we call roi. Right. So we don't want to measure initial visit revenue alone for a service that's reliant on retention. That makes no sense. General rule of thumb for us is we want to break even from our cost of goods and our cost to acquire a client on ad spend. So if it cost me $200 or $150 in ad spend and $150 in product costs, let's say it's $300 to acquire and serve the client. I want my initial visit revenue to at least offset that. And then everything else is icing on the cake. Producing ROI for us with no short term negative cash flow impact. That's really, really important. The other bad way though to measure ROI is to look at lifetime value and say, like, these clients might be worth $5,000 to us, $10,000 to us lifetime. So it's okay if I spent $1,000 to acquire the client and well, maybe if you're tracking and you're really confident. But you have to understand that if you're doing that, there might be negative cash flow pressure before you actually see a return on investment. So that might mean you have three, six, nine months of marketing investment that are actually digging you further into a negative cash flow position before it starts to snowball and build in the opposite direction. And at the very least, you need to be aware of that. So we don't like to look at just lifetime value. We also don't like to look at just initial visit revenue. I want a realistic blueprint for how this is going to happen over time. And so we built an ROI calculator that attempts to help you plan your marketing investment. We can give you the benchmarks on all of these strategies that we recommend running. So if you spend, for example, $4,000 on ads and you have a 17 close rate from 275 leads, then in in my example here, you're paying 86 to acquire a client. And if those clients spend $450 on the initial visit and we retained 40% of them, you can see that every month we're going to get 47 clients generating $21,000 in revenue. But you can see after month one that's $21,000. That same thing happens on average every month. But by month six, because of retention, we're at $40,000 in revenue growth. So sorry, every month we're doing $40,000 in additional revenue. By month 12 we're doing $63,000. So this helps us plan on a timeline for cash flow impacts and growth forecasts. Really powerful, really helpful tool. We fine tune Email me Ricky R I c k ydspa magicmarketing.com that's Ricky R I c k y medspamagicmarketing.com for your free copy of this. And if you have any questions, I'm happy to jump on and walk you through it, but I've got a little tutorial video that comes with it. It can really help you get clarity around the cash flow impacts and the timeline around your marketing investment, and also will show you how more aggressive investment will spur faster growth and also generally lead to better cash flow considerations, even short term. 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 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 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 this is a good visualization of how this happens over time. This is a real chart from one of our client reports, and as we chart this quarterly, the gap between ad spend and revenue generated gets bigger over time. Because if we're generating $30,000 a month in new patient revenue. And that happens every month. That's consistently happening. But now we have all of the previous months of clients that we acquired, some of which are spending money in the next quarter or in the quarter that we're in now. And so this builds like a hockey stick. It's got a very dramatic snowball effect with any amount of retention. So as time goes on, the gap between the money generated and the investment keeps getting bigger. So the longer you do this, as long as you're retaining clients, the better the ROI gets. So that's the exciting part. Cool visualization of what we just saw on the ROI calculator there. So what I would recommend you do at this point is set some growth goals, be realistic with the math. How many new patients do we need? Was it cost to get a client? How many leads to acquire that? A number of patients. And that's going to determine the ad spend. So when we're planning for our clients, if I'm with a business that's doing $2 million a year right now, and we want to get to $4 million a year as fast as possible based on a certain marketing investment, we can play with those inputs to figure out the timeline estimate for achieving that growth goal. And you'd be surprised how accurate this can be with some of the numbers and the benchmarks we have around offer frameworks. If you know your cost to acquire a client and that you have a ballpark figure on retention and spend per client, you, you can really dial this in pretty accurately. So it can be exciting to have some confidence and control over your marketing investment instead of it just feeling like guesswork. So some key takeaways from the stuff we went over here in this video. Customer acquisition cost is the first place to optimize, but you have to gauge retention to ensure that true success and ROI are happening at a satisfactory rate. We don't want to optimize just for customer acquisition cost alone. Remember, customer acquisition cost goes down when the attractiveness of our offer goes up, but also that impacts patient quality. Remember the other correlation items that we talked about? Recurring revenue services see better ROI over time, but not early on. And for immediate roi, if that's your need right now, you need to focus on high ticket sales, but expect a higher acquisition cost, lower overall activity to produce better short term profitability. And that comes at the expense of long term growth because the more people we have in our recurring revenue model, the faster and more aggressively we're growing over time. And the disclaimer that I'll probably have in every one of these videos again this year is the David Ogilvy quote. Great marketing only makes a bad product fail faster. We've had clients where we're, we're acquiring clients at a satisfactory rate. We're bringing new people. Just had a client right now that we're off boarding and we had, they were one of our worst performing clients, but we still had a $300 customer acquisition cost across all the time that we'd been working with them. So for every thousand dollars they were getting a new injectable client that was coming in, booking and paying for service. Again, that's on the really bad end of our performance. I always like to show the extremes, but that still is a workable campaign. I have other clients that intentionally have offer frameworks that give them a customer acquisition cost of $300, but they have $1,000 initial visit revenue and really good retention. This particular client has really bad retention numbers and low initial visit revenue. So the math starts to not make sense. And the reality is if you've got inherent problems in your business with your providers, with retention, with your ability to educate and cross sell, then feeding a bunch of new clients in your practice is not going to solve the problem. So again, always remember to have that stuff dialed in because great marketing will only make, I don't even say a bad product a subs. Anything less than a superior product or service offering is going to make marketing significantly less effective for your business. So last thing I wanted to talk about today, and we'll get more to this in the series, but opportunity cost around our investment. And the reason opportunity cost is so important is because it, it's a way to encourage more profitable strategic choices by weighing all potential outcomes of the different options we have available. So one of the other questions that we like to answer for our clients when we're doing this planning early on, we're talking about pricing strategy, correlation data, marketing, math. ROI is budget prioritization. And in any business we don't have unlimited resources. We have a certain amount of money this month and next month and the month after that. We're going to be able to allocate responsibly toward our marketing investment. And so I know it's an investment, it should be producing roi, but there's still a cap to this, right? We're not going to spend an unlimited amount of money. That's not realistic. So there's an opportunity cost and we have to figure out where's the best place to Spend our money and in what order. And one of the other mistakes I see people make is they're doing a little bit of everything. And in the, in reality, there's probably one thing that's working significantly better than the other things. And if you allocated your entire marketing investment to the thing that's actually producing the best bang for your buck before diversifying, you'd see a lot better, faster, more predictable growth in your med spa. So here's the general framework and blueprint that we use. So I got a phone ringing here, but here's the general blueprint that we use for most of our med spa clients in terms of budget prioritization. And this can be different in terms of like step one and step two, phase one and phase two. But if you're under $100,000 a month in your med spa right now, I would argue that there's no reason you should be doing more than one thing, one thing with maximum investment. So you can do other things that don't require money, maybe require your time and energy, like networking, boots on the ground, guerrilla marketing, those types of things. But in terms of advertising investment, you need to find one thing that you can pump money into that's going to generate the best result way more often than not. This is meta ads right now for us in 2026. So Facebook and Instagram ads, are these still the best arbitrage opportunity med spas have to acquire new clients. So if you're under 100k, I would solely focused on meds, be solely focused on meta ads with a good lead intake and conversion and tracking system on the back end. And again, I'm going to show that throughout the series once you get past that number. Now we can talk about a Google Ads investment, right? So if you're past a million dollars, $2 million range, now we can be doing Facebook, Facebook, Instagram and Google Ads in combination after your multimillion dollar med spawn beyond. that point, I recommend incorporating an ongoing SEO investment. Search engine optimization, very counter to what a lot of you are hearing. I'll explain why as we go through this series. I'm an SEO person by trade. We've had clients featured in Forbes, gq, Real Simple, Everyday Health. We do stuff on the SEO side I think is unparalleled in our space. Still for us, it needs to pass the burn test. And so I want the SEO foundation in place when we start. But I don't want an ongoing SEO investment until I've already been pumping aggressively my meta ads and Google Ads that have A direct response mechan mechanism that allows us to have confidence in the return on investment with accuracy. And then we can get into all sorts of other things beyond that, offline marketing. And this can change every year. Every year we're going to reevaluate this because if tomorrow there's a massive arbitrage opportunity with Spotify ads, and that's the thing that works best, because the targeting makes sense and we're able to generate a result, we will put Spotify ads first on this list. So this is not an arbitrary thing that we're just putting there that we're going to stick to forever. This is just right now, if I owned a med spa, where am I putting my ad dollars in order so that I can produce the best bang for my buck and expand only as necessity requires? So that's really important. We call this just our med spa magic method. This is the ramp up period for how to grow your med spa in terms of budget prioritization. And we're going to go into all of these individual services and strategies in great detail in the coming series. But again, I think this is a really important video. I would encourage you to go back and watch those correlation items because you'll understand every decision you make, there's an equal and opposite reaction happening to another data point. And if you can understand the interplay between these data points, you can make much smarter decisions to guide the ship in the right direction and ensure maximum growth in your med spa. Thanks all and we'll see you on the next one.