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Med Spa Success Strategies
Wednesday Thoughts: CoolSculpting & Emsculpt Advertising - What Every Med Spa Is Missing in the ROI Math!
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Hey, everyone. Today I wanted to talk about body sculpting, body sculpting advertising, and how to make this even more effective and more profitable. How to fairly understand and analyze your body sculpting advertising results. So there are some realities around body sculpting advertising that I think create problems perceptionally. And we even face this as an ad agency who's very, very heavy on data. I was the reason that I decided to make this video today is because I was looking at some of our stats this morning, and it's actually the first example in this slide. One of our. In the slide deck, one of our clients was running ads for M sculpt and they're spending money and the lead cost was kind of high. Conversion rate was pretty low. So our team decided to shift budget around to some things we were more excited about in terms of customer acquisition costs. But as I was looking at the data, I realized we were making the same mistake we tell our clients not to make, and that's worrying about leading indicators without looking at the big picture of roi. So there's some really exciting things about advertising for body sculpting devices that if you watch this video and you implement, can help you improve your cash flow situation, your profitability and your revenue dramatically in a very short time frame. So I'm excited to go into some of this. So here's what we typically experience when we run ads for body sculpting. First is the leads are expensive relative to some other things that we advertise for. So when we run ads for Botox and Dysport on Facebook and Instagram, we can see lead costs as low as $10 and even less sometimes. When we run ads for body sculpting, leads can be 30, 40, $50 and even more. So that's the first data point is from a leading indicator standpoint, we see the lead cost and it's higher than some of our other initiatives. So we hesitate for that reason. Then the conversion rates are pretty bad, right? 5% or less of these leads actually end up paying for service. So 95% of them don't even end up spending any money with us. We paid $40 for the lead. 95% of them don't even spend any money with us. And we start to get this feeling of disappointment and we see things like $1,000 customer acquisition cost, and we get bummed. But what if I told you that that's not necessarily a reason to be bummed? It can actually be a reason to be stupid, super excited, and a Reason to see promise and potential in scalability growth and revenue for your med spa really, really fast. So let me dive into some examples. This is the example I was looking at today from one of our clients. They've been running this ad for a few months for emsculpt. They had $4,400 ish in ad spend, 110 leads, only four people that had paid and closed. So that's 3, 3.6% of those leads that actually converted. But of those leads that converted, we generated almost $15,000 in just initial visit package sales. Which gives us a 3.3x 3.34x return on ad spend. So if you break down this data with something like M Sculptor, we have relatively low cost of goods compared to like something like injectables where it can be 40 to 50% cost of goods. Most of the $10,000 differential here between ad spend and revenue is gross profit and helping our cash flow situation. It's creating margin and profitability in our business. So even though we were paying in this case, let me just break the number down for customer acquisition cost here. 14 or 4,003, 64,400 divided. I think they actually had five or six. But in this case I think they were spending about $1,000 to acquire the client. So our team decided to pause this ad. But in reality it's creating very good profitability and margins. And I'm going to show you the takeaway and the action step. If you're seeing these kind of stats in in your analysis, action or example number two here. I still got this labeled as number one. I know in the slide for those of you that are watching the visual. But this is a secondary example. This has been. This one has been running for 12 months, this version of the ad. I threw these slides together as I was gathering notes here. So this was a last minute presentation this morning, but I'm excited about this. I wanted to jump on it. 12 months of running ads for client 2, they spent $8,300 on ads. They had 386 leads for M Sculpt. Actually don't remember if this one's emsculptor coolsculpt that at the check 13 paid, which is a 3.3% close rate. $31,000 though in revenue. So $8,000 in ad spend, $31,000 in revenue, 3.7x return on ad spend. Again, you have relatively low cost of goods. So this created a margin of $23,000. That's largely gross profit and positive cash flow. So what if we take this to the extreme and we stop feeling like disappointed that we're spending 600, 700, 800, $1,000 in customer acquisition cost and we actually zoom out to realize that if we're spending $1,000 in acquisition costs to sell four to $5,000 packages with low cost of goods, we're actually engaging in a marketing strategy that's very profitable and something that we can really lean on to scale profitability and cash flow very quickly. 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 another marketing option, a new agency, or just getting into Facebook and stream 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 and investment moving forward, understanding some of the nuances that can help you implement more effective marketing strategies for your business. So if you want to do that, you can go to medspamagicmarketing.com so last week I talked to a practice in the Northeast that's primarily a coolsculpting business and they were spending a lot of money. So over about 12 months they were averaging about $420,000 just in meta ad spend. So 35 to $40,000 a month, I believe they were. They mentioned they were spending on meta ads and from that they would average about 380 paid appointments throughout the year. So they were spending over a thousand dollars to acquire the client, but their initial package sale was $5,000 on average. I put $4,000 just to water down this example to show you the impact. With $4,000 initial package sale, they generated roughly $1.5 million in revenue, which is a 3.6x return on ad spend spend and almost a million dollars in differential between the ad spend and revenue collected with relatively low cost of goods, variable cost of goods and consumables associated with selling an M sculpting package. So they created a million dollar gap there differential that was helping their profitability and cash flow situation by being insanely aggressive with their ad spend. So the key takeaways here are understand the cost of customer acquisition for body sculpting is generally going to be high, but it's okay because ROI can still be really, really good, satisfactory good and even great. The margins are good. You have low cost of goods and low consumables. So the takeaway here is more aggressive spending. Assuming you're getting this, you know, 3x or greater return on ad spend is going to create more profitability in your med spa. So for some of you, this can be a catalyst to immediately double, triple your med spa revenue and increase profitability at almost the snap of your fingers. There's a limit to all of this, right? There are diminishing returns. There are other variables here. There are certain versions of your campaigns where you're not going to see that 3x or greater return on ad spend. But if you are and you're measuring that data, even if you're spending a lot to acquire those customers still can be very profitable and be a lever for you to press to increase the profitability and the revenue of your med spa. Some, some additional points here. I wanted to cover most med spas. The lifeblood of your practice is going to be injectable. So you're going to grow your patient database with injectables. That's going to lead to cross sells and upsells at a higher rate. Those people come back for recurring service. So I think injectables for most med spas are still the lifeblood. They're the gateway drug. They have recurring revenue. People are hopefully coming back for months and years to come and it's the best long term growth strategy. But in terms of short term cash flow and profitability, it can be very, very lucrative to spend a lot more to acquire the customer and to sell these expensive packages up front. Now the downside to that is these people are generally buying the packages and then they drop off. They're not really becoming med spa clients. Most of them, they're not coming back for recurring service. They're buying one thing from us and they're probably not coming back for other things at a high rate, maybe 10, 20%, but not 60, 70, 80% like we see with our injectable clients. So that's, that's one of the downsides long term. But but again, that doesn't take away the short term impact that this type of strategy can have. The other thing to keep in mind is if you put all your eggs in this basket, you don't have a large patient volume. So the opportunities to cross sell, upsell and build your patient database aren't really there. Because if you're spending $10,000 a month on advertising and you're only attracting 10 clients, that can create massive profitability, right? Like with this example, you might spend $10,000 to sell $40,000 or $35,000 in package sales. It's very profitable. But you only saw 10 patients. So it doesn't create the activity that you need to keep your providers busy. Especially if you do have injectors and estheticians and you want the opportunities to build relationships that lead to retention and cross sells and upsells. So if you're a practice that needs short term cash flow, I would lean into this strongly. I think this is a great place. If you're advertising these services, don't be hesitant, don't dip your toe in the water and hesitate because the lead cost is high and conversion rate is low. If you're generating a satisfactory return on ad spend, be as aggressive as you can be to capture this market share and improve the profitability of your med spa really, really quickly. I hope that was helpful. We'll see you on the next.