← Med Spa Success Strategies
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- [00:00]
A
Foreign. Welcome back. We have Lauren back today. Everyone, congrats to Lauren. She had her first baby. Her and her husband Tyler. So Easton, how old is Easton now, Lauren?
- [00:15]
B
He is eight weeks on Wednesday.
- [00:17]
A
So a little. Yeah, little two month old guy Easton. So excited to have Lauren back on the show. I know you all have probably missed her and today I feel like this was a good segue back into the conversation. We've been talking so much about brand and magnetism and I think those things definitely matter if you've been listening to the podcast and the YouTube channel. I've really been on that a lot lately. But I wanted to go back to some of the, the reasons that volume and numbers do still matter so much. And I know those of you, especially if you're nerding out on the marketing side, you're listening to the Alex Hormozi types that you can get really obsessed with numbers that I still think are giving you an incomplete picture of the analysis on what success looks like in your med spa. And so one of the numbers that I hear people talking a lot about, and we've talked about it too, which is why I wanted to add nuance with this conversation today, is the real thing that we're not optimistic. We're not just optimizing for butts and seats. We've talked about this. I read our whole one sheet before a conference we went to recently about how we're not just optimizing for butts and seats, we're trying to create the biggest margin right between money in and money out. But I think sometimes when we focus that on a, on a specific singular client, we miss the big picture here. So if we're talking about running strategies, for example, with marketing and client acquisition, where our goal is to create the biggest gap per client between money in and money out, we're missing the role that volume plays in this analysis. So that's why I wanted to revisit some of this today. And right. These ratios, they're not the things that pay rent. Money coming in the door does. So how do we position our med spas to succeed so that we're not just assessing over the margin per client, we're we're actually obsessing over how to make our med spa more profitable overall. So let's go into a couple examples. I wanted to just start by illustrating this a little bit with some math. So this is why volume still matters here. And the goal is to find the balance between margin and volume because over optimizing in either extreme is problematic. Right I we've have clients right now. I've got a client that's in Arizona. They're running ads for Zurf and it's really successful in terms of the margin. Right. They're spending $1,000 to make five or $900 to make $5,000 on initial package sale with low cost of goods. But what problem does that lead to when you have rent to pay? The per client margin looks good, but their books still aren't full. Right. We might have six, ten clients in a month and a half, two months of running ads. And the overall profitability on those specific clients is good, but it's missing the bigger picture of how we can grow and scale our med spa. So, so just to illustrate that and to illustrate some of the network effects of why volume matters, let's just say you're running a strategy where you have $1,000 and I'm going to use Alex Hormozy's LTGP lifetime gross profit. So our actual margin. So if we've got $1,000 in profit off five clients creating $5,000 in margin verse $250 in margin off 20 clients, we're at the same $5,000 in profit margin. But I think we would both argue, Lauren, that I would rather have 20 clients generating a smaller margin giving me the same $5,000 versus five clients generating that $5,000. And we wanted to explain why and some action items on how to calibrate this properly. Okay, so a couple of the network effects of why volume matters. The first thing that comes to mind is Google Reviews. Right. We know that people are going to Google every day or the search engines and they're searching for a new med spa or a place to get Botox or laser hair removal, or it is that you might do. And practices that have more Google reviews, have a more established reputation, they're going to get a bigger piece of that pie. So there's one reason alone that I'd rather have 20 clients generating that margin instead of five if all things were equal. The network effects of referrals, word of mouth, market share that your clients would otherwise have. Like there are all sorts of reasons that volume matters. So I guess, Lauren, I know we always talk about trying to balance this trade off with clients. Any thoughts on just that initial concept of the balance between volume and patient quality and how you think about coaching clients on that?
- [04:23]
B
Yeah, I mean, I think it kind of really plays into what you were just talking about in the last podcast too, of just how much the market has grown in terms of how many med spas are everywhere. Right. So the more that we can get more of those people who are interested in those services in the door in our chair and start building those factors of know like and trust, that's what's going to make the biggest difference. And Ricky and I just had a conversation before this call of practices who are fully dialed in and who are A plus practices. You're going to see that just compound growth long term. And Ricky's going to kind of continue to talk about that here in a minute. But that's kind of where I coach my clients immediately is like, yeah, you might be able to get five clients in right now that might spend a little bit more with you. But long term, where does that really sit us revenue wise and where does that put you growth goal wise? The more people that you're able to get in and the more they come back and buy more and sell more, that's when you're really going to see your practice grow and take off.
- [05:17]
A
Yeah. And when we do this, for those of you who have ever seen us demonstrate our ROI calculator, it's sort of how we forecast growth. We've had clients that, that's been very accurate, but it's very dependent on one number. And the one number that it's very dependent on most of all is retention. Retention. How many people are truly coming back and sticking with you. And so in, in conversations I've used this, I don't know if this is already an existing term, but I've used it. Effective customer acquisition cost ecac sort of. If you want to do an analysis of this to calibrate marketing strategies, go through a specific pool of clients that you've generated from, I don't know, an ads channel or a specific offer type and look at how many of them became regulars or became repeat visitors. I think that's a good pulse to figure out like how to kind of calibrate this trade off properly. Because again, the two really bad ways to go on this. Let's just illustrate the extremes because I see a lot of people talking only about butts and seats. We see this with other marketing agencies that run ads with like a 30 patient guarantee. Lauren and I both know we could guarantee a hundred patients a month because we know it's a function of ad spend. Once you know your numbers and you kind of understand how strategies work within a ballpark range, your client acquisition is just a function of ad spend. So the real question becomes though, how do we make sure that we're not over optimizing for butts and seats. Because there's a version of this that is you are going to go to such an extreme where you maybe are getting Groupon chasers or people that were coming just for the deal and then they don't retain. The whole strategy will fall apart if you go too far in that direction as well. And so one of the things Lauren and I just talked about that I think we're still working through is that there's this catch 22 with client acquisition when it comes to our purchase matrix. So our purchase matrix, how do your clients choose a med spa? Comes down to three buckets of factors. Reputation, convenience, and price. We've often talked about if you don't have a pristine reputation, then you might have to be more aggressive on price to try to shape perception through experience and to get people to come in for that first visit. That's true, I think, but there's a caveat there that you have to watch for, which is as you dial up offer attractiveness, you're also going to increase the chances people were choosing you specifically because of the offer. And then you do work yourself back into Groupon territory where you found now the 20% of the market, the 15, 10% of the market that are so price sensitive, they're just going to go to the place with the best deal. And the challenge there is, no matter what you do in office with your consult or with your rebooking strategies, those people are not going to come back. And it's trying to calibrate how many of those you're doing. So I think that effective customer acquisition cost number is pretty helpful.
- [07:58]
B
I think a good experience or example of that too is kind of what we just saw with our client up in Massachusetts where they were running this 20 unit for one 59 Botox offer. We were getting a really, really solid customer acquisition cost of like $150. And so the client said, well, why don't we try to dial the offer even more attractive? Let's try to see how cheap we can go and see what we still get and what customer acquisition cost looks like then. So we dialed the offer up to 20 units for 120, which dropped their customer acquisition cost by like 30, $40 or so. So it was pretty much offsetting the product cost there acquisition cost. But we saw their retention go from incredibly high to incredibly low, really, with that offer difference, which you wouldn't really expect it to be that big of a jump, but it really was. So at the end of the day, we decided, hey, let's pay a little more in customer acquisition costs. We're still getting a lot of butts and seats, but we're getting less of those really price sensitive discount shoppers to where that retention long term is going to add up and still make sense. It's not fully to the extreme where we got rid of the promo completely and tripled customer, customer acquisition cost, but it was that small gap of, okay, we're going to increase a little bit to still be in a nice range. So we're getting a solid customer acquisition cost and a solid patient quality to where we're going to see long term compounding growth from it.
- [09:14]
A
Absolutely. And I think the other thing we've realized through conversations with clients is this isn't all a math problem. There is a people part of this, right? And if your providers, if you do go to the extreme where even if the math makes sense, you're, you're optimizing to the extreme for customer acquisition cost to get low as possible by dialing up offer attractiveness. You also have considerations of like, do the providers get frustrated? Are they not enjoying their days? I, I had a podcast episode recently. One of my guests said, I want to wake up every day looking at my schedule, being excited that I'm, oh my gosh, that person's coming in, that person's coming in, that person's coming in. And that means something too. If you got into this business, you got into this business because you like helping people and just trying to run. Financial arbitrage is probably not the game that you're super excited to play. So we understand that that's part of this too. But again, as a business owner, you do have the business to run. So I think calibrating in a way that makes sense, where the offer is really the cherry on top is the goal. I think the danger with sometimes even like, I'll admit, like, we've probably led people to, to this, we've probably pushed this a little bit, which is if you over optimize for customer acquisition cost with super attractive offers, the offer is not the cherry on top becomes the bulk of the sundae, it's the ice cream. And when that happens, it's going to be hard to retain those clients if they're choosing you specifically for the price in lieu of reputation. This stuff can get a little dicey when the offer is just the cherry on top and people are already excited to work with you. You've got the reputation, you've got the social media presence that has them excited and Then you've got a new offer on top. Those things work really well in tandem. And I think sometimes for us, we've said, hey, well, you know that the meat of the validation phase checklist is not there. People are not going to be super excited when they research your business versus the alternatives. You're very much a B minus when you've got competitors that are in A plus territory. And so we need to be more attractive with the offer. I would say you're putting a band aid on it. You need to go back and fix the foundational parts of your business that make sure you're set up to attract clients. They're going to be excited to choose you. So remember that too. The offer should be the cherry on top.
- [11:20]
B
But Ricky, do you want to kind of. Sorry, before we go a little further, do you want to jump into the recent client we onboarded to where you kind of saw that issue and talk through, like some of the things we decided to do first before launching the offers, just to kind of give a perspective of how you can level that up if you're one of those spas?
- [11:37]
A
Yeah, I think so. We've got this in some other videos, but I think it's a good thing to touch on again. And so specifically for this client, as we've had these more of these conversations, I saw the writing on the wall. They're an established plastic surgery practice. They didn't have bad reviews. I think they have a four seven or four. Eight now on Google. The website looks very much like just nothing but stock photos and boilerplate information. Instagram maybe not super up to date and super proactive with the types of strategies that we would recommend. And so I think we've been getting better about how to coach clients. And so for you listening to this, I hope you take something from this. Go back to the drawing board. The things that we say people always look at before they make a purchase decision that are pretty much the constants are your website, social media presence and your Google reviews. Right. Those have got to be dialed in. And if you're going to be in the like I just talked to somebody, I think they have still a like a 48 or a 4. 9 on Google. But it's still challenging because they've got enough negative reviews in that review profile that their competitors don't have that. All other things equal, you're gonna have to make up for it somewhere. So if you're going to be like at a deficit to any of your competitors, any of your competitors from a Google review, Standpoint, you have to understand where you're making up ground.
- [12:47]
B
Well, I think it's funny too, when we look back on where we started. When we first started doing ads for med spas years and years ago, we had in our internal SOP is it was like, if the rating is a 4. 7 or higher, include it everywhere as like this great social proof. Yeah, that was when there were maybe like two spas in town. Now that there's 20 in some popular towns, that's like, hey, you gotta have a 5.0 if we're gonna put that on anything. Because you have to have something to be proud of, to showcase to people. Like, nobody's gonna pick you if your ad says you're a 4. 7. Essentially, yeah, for sure.
- [13:18]
A
And like, even again, anecdotally from clients that have come and gone from our agency, we've got clients that have been with us basically since we started. And I think part of that is they're killing it. So the strategies that we run, it's so easy to make these things work when the foundation is there. When it's not, it's like putting a band aid on a bullet hole. It's not going to solve the structural problems in your business. And working on the foundational elements is just so important, and that's beyond anything a marketing agency is going to do for you. For the most part, you got to fix those things in your business. And, and when you hear us talk about this and you, and you check the box in your head like, oh, my receptionist is friendly. My consults are good. Good is not good enough. Your B plus caliber consult is putting you at a deficit. Your somewhat friendly but not incredibly over the top welcoming receptionist is putting you at a deficit. Your ability to be a little or your willingness to be a little sloppy with how you rebook clients is to your deficit. We just talked to a client in California this week and we looked at their rebooking and retention numbers. Right? You can bring a horse to water, you can't make them drink. When we looked at their retention numbers, they had only 16 of 91 people that had left with a default appointment on the books with the same offer type. We have another client that runs this strategy that theirs is in excess of 90%. I'm not saying all of those people show up for the rebooking. A lot of them are going to cancel or no show on the second appointment. But it dramatically increases your chances of getting that appointment to actually happen when you leave with the default as the appointment on the books. So these things matter. Go back to the foundation elements. We have a ton of episodes here on how to nail the consult and really do it at an exceptional level. How to nail the rebooking strategy so that people are rebooking in the chair before they leave the office. Because those things matter. Dial in your reputation, build a brand, build magnetism, kill it on social media. So yeah, absolutely all those things matter. And before you go spending money on marketing and advertising, fix those things. It'll make the marketing infinitely more effective. Today's episode is sponsored by Gloss Genius. Gaps in your schedule, patients who don't rebook, tight margins, high fees and a clunky EMR holding it all together. Sound familiar? You love to be growing your practice, but you don't have time to figure out your next move, let alone sit down to eat lunch. That's why I want to tell you about Gloss Genius. It runs in the background to fill your calendar, find revenue hiding in your practice and handle your admin automatically. Charting consents and HIPAA compliant records included. And unlike other systems, Gloss Genius's point of sale actually earns you more rebooking patients at checkout and increasing what they're willing to spend and saving you thousands with the lowest flat rate and zero hidden fees. Ready to learn more and take back your time? Use code strategies@glossgenius.com for 50% off your first two months of the Gold or Platinum plan. That's code strategies@glossgenius.com for 50% off Gloss Genius. More revenue for your business, more time for everything else. Hey practice owners and marketing directors Interrupting this episode to invite you to schedule a one on one strategy. Call with me to discuss how we might be able to improve and level up your digital marketing efforts. So we're rated five stars on Google, we're HIPAA verified by Compliancy Group and we have a track record of taking clients from 30,000amonth to $120,000 a month and adding multi millions of dollars in additional revenue for some of our bigger multi location med spas from more effective marketing strategies. So on the free strategy call it's really educational. I basically spend an hour going through detailed reviews of all of our best performing plays that we run for our clients. You have it to take and run with it if that's what you want to do and if you think it might be a fit to work together then we're excited about the possibility to partner with you. But if you're interested in better, more effective digital marketing solutions for your Med Spa, visit Medspamagicmarketing.com that's Medspamagicmarketing.Com to schedule your one on one strategy. Call with me. So, so again, that's kind of the volume segment, but we talked about this at the intro here. You can also go too far into this ghost town strategy, which is you're optimizing so much for volume, for margins that you do it at the, at the detriment of volume. And now you just have no appointments and you have no momentum. When we do the ROI calculator, the thing that builds momentum is retention. If you were going to spend $5,000 a month to get $15,000 in initial visit revenue, for example, after you pay somebody to manage your ads, you cover your ad spend, you cover cover your cost of goods, you might be breaking even or even losing money sometimes on these strategies. But as you start to pile on retention, you have people coming back for second, third, fourth and fifth visits over 12, 24, 36 months. And beyond that, it creates a dramatic snowball effect. We just celebrated another one of our clients last week hitting a million dollars in new patient revenue from our ad strategies in less than 24 months. But that happens because of retention. It doesn't happen without the retention number. So keep that in mind. But if you're over optimizing for margin, you're going to have a ghost town and you won't see the compounding effect that retention creates. So there are also some of you that are being told by consultants that, well, this, look at this strategy, right? This, this, yeah, it cost you more, but look at the margins. These are good quality clients. These are the kind of clients you want to see. Look at how much money you're making off these clients. Well, again, this whole thing falls apart if you only have six of those people every month coming in. Good luck growing a med spa on six booked appointments. There's not much recurring revenue or retention that's happening from that. So let's talk a little bit about action items and how to calibrate on this so that you're not over optimizing to either extreme. Lauren, any thoughts before we go into action items?
- [18:49]
B
Nope.
- [18:49]
A
And these are rough rules of thumb. Like most things, this is not perfect, this is not scientifically backed. It's just trying to give you some sort of a metric to shoot for here because we've had conversations with clients and I think you can kind of calibrate this based on need of the business. So if you are full, you've got pretty full appointments, but you're still looking to grow and expand your business, then you need to probably still run some of these strategies. Either way, it's just trying to figure out how to calibrate the offer type and whether or not you're optimizing for margin or for butts and seats. But I think the answer there is kind of the same for either one. So let's use a couple rules of thumb. If you are struggling to have appointments full at all, like you just have empty books. I remember talking to one of our clients in Texas four years ago and we do a much better job of having these conversations early now. But we're about a year in and we were getting pretty good stats on the marketing side and I could tell she was still stressed about money. And I sat on a call, I said, where's the gap? How many appointments do you need? How many extra appointments do you need a day? And her answer was something like, I don't know, 10 or 15 appointments a day extra. Okay, well ads aren't, we're not going to be able to do this in any short amount of time from ads. There's no equation that's going to do that. But if, if you are in a situation where you do need a massive gap filled in your schedule, you're going to have to err on the side of being more extreme with your promotions and your offers because you do need opportunities and that bets. So this is where strategies like running $3 a unit disport, running 20 units at a really low 159 price point, running the 30, you know, the 25$30 introductory custom facial that has low cost of goods. Those things will give you opportunities to educate and create relationships because you need that network effect. You need to start building Google reviews. You need opportunities to cross sell, you need referrals. So you do have to over optimize for volume if you're in that category. As you start to get your books more full and you're closer to stability and you still want to grow, it becomes more important to find the middle ground. So you can run some strategies that give you high margin, right? You can run the M Sculpt strategy that gives you $1,000 CAC with $5,000 initial visit revenue on packages. But no, that's not the thing that's growing you short, short term. That's the thing that's giving you a profitability boost this month and it's not going to necessarily create the snowball effect. And then on your new patient offers the thing that we've always said for years now, which continues to be true. Invest in injectables and calibrate to an offer where the offer is the cherry on top and you're really winning primarily on reputation, the elements of no like and trust and getting people excited to choose you. And so I think that's maybe a good rule of thumb. If you're in the bucket where you've really got a lot of availability, you can calibrate more to an extreme over optimize for volume. Even if retention percentage is lower, you still need that network effect to start kicking in and start to calibrate to less attractive offers where you can let the offer really be the cherry on the top as you get closer to capacity.
- [21:43]
B
I think the other thing to remember there too is it doesn't have to be capacity as a whole. It can be provider specific capacity. So for some of our practices who were really established, they've been in business for 10 plus years, they have offers that are specific to certain providers. So they're experienced providers who have been there for multiple years who really don't have that much space in their books aren't really going to deal with the discount shoppers. All of those funnel directly to their newest injector or the person who has the least on their books at the time. So you can always kind of funnel where appointments are going to, whether that be through your appointment setters or directly in your ads and your ad copy saying this offer is only available when booking with so and so or so and so. So that's another thing to keep in mind. It's. It doesn't have to be just where your business as a whole is that it can be where certain providers are at too.
- [22:29]
A
Exactly. Yeah, it's. I think it's so case specific like we talked about the, the discount facial strategy. There are plenty of practices where that would make no sense to run that strategy. But context dependent. If you've got an esthetician that's there full time that has a bunch of empty space on their calendar, you might as well give them the opportunity to create perception through experience. Give your injector some extra opportunities to go bring those people into a consult room and to talk to them about injectables. So might want to over optimize for butts and seats in that case. Lauren, I have a question for you. This actually came up last week, I think just before you got back and I think this is another one of those catch 20 twos. So this will be putting you on the spot but hopefully this is helpful. For the audience and listeners. When you run this strategy, the catch 22, I think with running a promo for a new provider can be that you're increasing the likelihood that you're getting people that are coming in because the deal is good. And now you're putting them in the seat of your least inspector, least experienced injector, who's probably the least likely to wow them and the least likely to get them super jazzed up about actually creating the perception through experience we always talk about. So, you know, it's in a weird way, if you bring your best injector, the $3 clients, they might do such a good job that those people came in for a good deal, but they stay because they had such a great experience. If you're doing that with a less experienced injector, how do you ensure that it, you're making it work on the back end with retention? Any advice on that?
- [23:54]
B
I think a couple things from what I've seen, and I've seen a couple different practices do it different ways. One that's specifically standing out is a practice in South Carolina that we've worked with for a long time where they, we saw that through originally when they had hired, hired two new injectors, they funneled all new patients to them directly. One of them had really good retention rates, and one was really struggling. And when we kind of backed up and evaluated it, it was because of the personality. Right. One was really timid, one wasn't so good at the cross sell and the upsell, and the other was really good at the education piece. So what they did is they went back to the drawing board, they had the owner of the practice go into each appointment with that person, walk through kind of the console, make sure that they got up to speed watching them do it, and then they let them go on their own. So it was kind of, hey, you're my wingman, you're my right hand. Listen and kind of add your input until you feel really ready or I feel that you're really ready to go on your own completely. So that was part of it too, because the person then they met the new injector to get comfortable with them, but they also learned the owner is really training these people hand in hand. The other people that I've talked to really take that time to train and just don't, you know, go off on the whim letting people do it. The other things that I have seen are you just hire somebody that kind of has that experience already and you understand, hey, I might pay that premium a Little bit upfront and we might have to take the time to fill their book and I might understand that, hey, I'm going to lose more money on this person because their hourly is more expensive than what a brand new person would be with these new patients. But they're really good at what they're doing, so I'm going to accept that. So that's kind of like that practice we were just talking about in Massachusetts. They just hired a brand new injector to them. But she has 15 years of experience, so she was ready to come in and just get started. So it was the same thing. Hey, we're going to have to fill her books with discounted patients. But she already knows exactly what she's doing, so she's ready to come in hot. So it's kind of, hey, either take the time to really train that person to get them ready or hire somebody who is already ready. And if you don't feel like that person is ready, then it is not time to put them in a one on one consult with any new patient at all.
- [26:03]
A
Yeah, and you need some sort of QA to know this is happening. Like, like sometimes it's easy to catch because when you have multiple injectors, if you're tracking these numbers, you can start to see that there's a disparity between one provider or the other. I've talked to some people that don't necessarily track these numbers. They don't have these numbers at their fingertips. So I think like QA becomes very important. Like Lauren said, you have to have somebody that you're confident, they're trained to do what you want them to do and to handle the conversation exactly how you would want them to handle it. Or you're hiring somebody that already has that skills and probably a little bit of both. I've talked to so many people too that they've tried to train a person and they like, but they just don't have it. This is a personality driven business, especially with injectors. And if those people don't know like and trust them and they don't like just feel that connection, then that's always going to be a struggle. So I guess one other question, Lauren, on that. Go ahead. Do you have a thought?
- [26:49]
B
I was just gonna say, I think it's also so patient dependent in terms of who responds best to what type of provider or injector. So like, I know some people who might not care as much about results but love to have like a fun, bubbly, girly conversation in the chair. But I, for me personally, I don't care if you're cold and not super nice, but as long as you come to me with a million facts and I think that you know exactly what you're talking about and what you're doing, great. Like I don't need to have a 30 minute conversation. So I think it's very person dependent. So have somebody who has that golden skill, whether it's the knowledge or the person, the, you know, personality, that kind of thing.
- [27:27]
A
Yeah. One other question, because this came up recently, Lauren too, we know that we talked about over calibrating with an offer that's so cheap that the clients are choosing you because of the offer. So retention becomes a challenge. Any advice on how to know when it's a process issue versus an offer issue that's leading to poor retention numbers, but that's kind of a hard one.
- [27:48]
B
Yeah, I think what I have tried to kind of help calibrate with is having like another backup offer with it. I don't know if this is going to make a ton of sense, but for example, we do a mini lip filler promotion and that's really cheap for a first half syringe of lip filler. So a lot of times people will come in, they'll get that half syringe. Then we say, okay, have another offer on the back of it to where it kind of builds a bridge between offer, kind of another offer and then paying full price. So it's not like a huge jump from big offer to full price. And I think that really helps a lot of like, okay, I'll get the half syringe for whatever price point that's really low, like 2:49. But then hey, if I want to increase to a full syringe, oh, I'll still get that for $200 off. It's not as steep, but it's still something in the middle. Maybe you take advantage of that to where then they paid a little bit more, they get some of that relational aspect too and then they go to the next step. If people are really just buying that half syringe, aren't even willing to take that next step, then you know, okay, it's probably offer related to where that's all that they wanted. If you can get somebody to upsell from offer to offer, you know, that's not as steep. It's probably process, you know, or if you can't.
- [29:04]
A
Yeah, that's a good rule of thumb. And I like the idea of stair stepping them back into full price because I think sometimes when you Run a promotion. The, the adjustment back to full price can cause hesitation. But again, we know that the data shows that as people come in for a second, third, fourth visit and so on, the chances of being a long term client increase, which with each additional visit. So if you can incentivize them to stair, step into it and make the increment, make it incremental, I think that's a good, good reminder. Good strategy.
- [29:30]
B
Yeah. And if you can't get somebody to buy that next increment too from you.
- [29:34]
A
Yeah.
- [29:35]
B
It could be an injector issue, you know, or a process issue.
- [29:38]
A
Yeah. So I think the conversations probably help too. I'm assuming, like have conversations. If you talk to people and they just like they're hesitating and you'll probably get a pulse on it if they're specifically telling you, I just came in because the deal was good, I wasn't, nothing you could do to basically keep me here. You'll, you'll start to figure that out too. But again, I think keeping this pulse on that effective customer acquisition cost number, probably one of my favorite secret little hidden metrics there is, look at how much you spent, how many clients you got in and how many clients stuck around. And I think that'll help you calibrate to the strategies that are going to perform best for your practice long term. One other thing we've talked about recently is profitability of these strategies. For those of you that are just dabbling in marketing or even if you've been doing this for a while but you're not sure on the numbers, you just spend money kind of hoping that it works and you're not really confident in the metrics. I like this rule of thumb here, which is we talk about as like a gold standard. Can we break even or better on cost of goods. Now we have a consultant that we do some work with, he's with Allergan and he kind of challenged us on some of these numbers because he wants to put some other things into this calculation. I get it, it's just two different ways to calculate. But if you start to look at an all costs considered analysis on your marketing, right, you're paying for management fees, you're paying for ad spend, you've got your product costs, then there's going to be a ton of you that are losing money on first visit the book Med Spot Confidential that I always examine. Reference. Just so you know, it's not just us saying this. They specifically talking talk about spending $333 to acquire a client on advertising that only spends 400. Well, why would you do that? You're losing money on the first visit. But over the lifetime value of the client being, you know, five, $10,000, you're going to make a bunch of profit over the lifetime of that client. So I think a good rule of thumb is I want to be profitable by second visit on these clients. And so anytime you start advertising and marketing, you might lose money on first visit. Don't obsess over that. That's not the metric that you should care about. If you have a good effective customer acquisition cost and retention, then you'll start to make money. It'll snowball as people come back for a second, third, fourth visit. Lauren, if I know this is kind of a hard one, but when we talk about calibrating for retention and effective customer acquisition cost, you could run one version of this play that gets your customer acquisition cost so low that the numbers still make sense. But you maybe only have 15%, 20% retention, let's just say, versus a strategy where you're optimizing for retention up front. But now the acquisition cost is super off the rails. But now you have 65% retention on those clients from ads, which would be really good for those of you that's not the same as your word of mouth referrals. If you're advertising, your retention percentage is not going to be as good, especially if you're using offers. But do you have a rough rule of thumb of a retention percentage that you start to feel comfortable with when you're looking at offers? Just anecdotally, I think that like 40,
- [32:20]
B
45% range is where it's really solid. I would say 40 is probably okay, we're comfortable. 45 is like, okay, we're good to go.
- [32:27]
A
Yeah, I like that too. So that's a good one for you all listening to this. If you're running a new patient acquisition strategy with any sort of offer incentive, 40% plus, that's a good benchmark to look at because that gives you, you're gonna be able to use a customer acquisition cost number. That's what, 2.5x whatever your real customer acquisition cost is, which should put you in a pretty good position to be successful with these strategies because the retention piece will be there.
- [32:50]
B
But yeah, I will say though, I've seen certain offers where we get CAC below 80 bucks and we're at 30 retention. I'm like, hey, let's crank this up. Like, I'm.
- [32:59]
A
It's all about the tipping points. It's all about the relationship with all, how all of these numbers work together way more than it is about any singular number.
- [33:06]
B
Yeah.
- [33:07]
A
Yeah. I do think that retention piece matters a ton. Hopefully this gave you some food for thought to calibrate in a way that makes sense for your med spa. The dangers of going to both extremes and the downside of doing that, some of the trade offs that you make with different strategies. Because this for med spas is a complex set of variables you're not running. I always joke about I. I'm kind of jealous of people that sell pools because you can spend $5,000 to advertise if you're selling a 50,000 doll. Hey, everything's done. We understand our ROI with med spas. It's a business that was reliant on retention. So we have to make sure we're not just running strategies that optimize for butts and seats alone. We need to understand the full picture and all of the trade offs of these different variables. So hopefully we gave you some good rules of thumb and some good things to think about here as you strategize your ads and offer planning. And again, injectable still is the forefront of our list. By far and away, it is the best tool for new client acquisition. Cool. Any other last thoughts, Lauren?
- [34:01]
B
Nope, that's it.
- [34:02]
A
Cool. Well, we're excited to have Lauren back. Thank you all for listening and we'll see you on the next episode.