Options abound for boosting spa business — even during
an economic downturn
the economy teetering towards recession, medspas find themselves
in an odd position. On one hand, they may see a dwindling of customers
who were already pushing the limits of their budgets for treatments,
yet they may see an increase in the form of new customers who, because
of the economy, may have decided to put off that $10,000 face lift
for a few years and take care of things with a few Botox or laser
treatments instead.ng to Isaac Starker, M.D., a plastic surgeon,
Florham Park, NJ.
before the economy took a serious downward slide, noninvasive cosmetic
procedures were soaring, and figures indicate that cosmetic rejuvenation
remains a high priority for many baby boomers.
The number of cosmetic procedures performed in the United States
in 2007 was up to 11.7 million, after staying steady at 11.5 million
procedures in 2005 and 2006, according to the American Society for
Aesthetic Plastic Surgery, and the number is expected to continue
to grow. Meanwhile the society’s statistics also show that
while surgical procedures have increased 142 percent since 1997,
nonsurgical procedures have increased 743 percent since then —
and that’s good news for medspas
procedures have increased 743 percent [since 1997].”
would be a key mistake for medspas to assume people will stop spending
disposable income on cosmetic procedures,” says Cheryl Whitman,
CEO of the Beautiful Forever Medical Spa Business Consulting Firm.
no business escapes the impact of an economic downturn,” she
adds. “However, our aging population is still very focused
on appearance and is willing to funnel some disposable income into
achieving a more youthful appearance.”
The precarious economy has nevertheless given some medspas the motivation
to rethink their business approach and strategize not just on creative
ways to build new business, but on ways to retain existing customers.
economy has inspired many practices to focus on enhancing their
marketing efforts and providing exemplary customer service,”
Ms. Whitman says. “More than ever, patients are determined
to get the most for their money and they won't hesitate to shop
means providing service that is better than the next guy. “Your
marketing will draw them to you, but you and your staff must take
the time and make the extra effort to build and nurture both new
and existing client relationships,” she says.
have plenty of options for addressing the tighter budgets that some
clients have to deal with, according to Ms. Whitman. For one thing,
there is financing: “To make cosmetic procedures more attractive,
medical spas have the option of offering patient financing, allowing
services to be paid for over time.”
with a financing organization not only allows patients to get the
procedures they want without waiting, but also provides full payment
to the practice and alleviates the need to send invoices or address
payment defaults,” she adds.
can also broaden the extent of their products and services to offer
a range of price choices. “Consider diversifying your menu
of services to include less expensive alternatives such as facials,
Botox treatments and fillers, as well as services and products that
address a consumer's need to save money,” Ms. Whitman says.
Fox, president of Strategic Edge Partners, a consulting firm for
plastic and cosmetic surgeons, adds that in addition to offering
ancillary services, medspas can address clients’ cost issues
by creatively packaging those services.
can certainly do well by offering multiple options instead of just
the big ticket procedures,” she says. “Be realistic
about what consumers are going through and offer specials or bundle
certain procedures together to make them more affordable, even if
only for the short term.”
all, involve the entire staff in make the adjustments and setting
goals, Ms. Fox says.
practices have never bothered to set goals, and in a recessionary
market, the most important thing to do is sit down with your staff
and plan how you’re going to ride this wave.”
Another item near the top of the list of mistakes to avoid
during tough times is to stop advertising, Ms. Fox emphasizes. “Many
people stop advertising, but that is actually the last thing you
want to do,” she says. “The fact is, this is when the
better prices can be negotiated for advertising, and since others
are cutting back on their advertising, your ads are all the more
in addition to negotiating better rates for themselves, medspas
should be prepared to do some negotiating on their own rates and
services as well during the sluggish economy.
you want to hang on to every dollar, you won’t survive in
this market,” Ms. Fox advises. “You have to be willing
to negotiate a little and be flexible, just like every other luxury
product or service on the market.”
Preparation can be essential in being able to offer that flexibility,
Ms. Whitman adds.
“It is vital to prepare a worst-case scenario that includes
a 12-month cash flow plan that anticipates a 10 to 20 percent drop
in revenue,” she says. “The plan should outline the
changes you might need to make and when you may need to make them.”
whether or not the economy enters an official recession, The International
Medical Spa Association already has the bases covered. The group
has published a “Recession Survival Guide,” offering
tips on “how to increase your market share in spite of a slow
guide includes the following suggestions:
your operating expenses: Look at expenses involving business,
staff, treatment and cash flow and see how they compare to your
original business plan. Consider things like what to trim and
how many clients it takes to cover $1,000 in operating expenses.
your exposure: Use advertising, public relations, traditional
marketing to existing clients and viral marketing with e-mail
to old and new clients. Also, take a good look at your retail
displays and consider whether they are effective and inviting.
new alliances: Partner with distributors and manufacturers; offer
gift certificates through your local florist; join the local merchant
association; make your medspa familiar to local hotel concierges;
and hold special events such as “Spa Awareness” open
International Medical Spa Association)
all, don’t underestimate society’s irrepressible quest
for youth and beauty and how that affects consumer spending.
“There are certain segments of society
that will give up a lot of other things before they will give up
their Botox,” Ms. Fox says. “It’s no longer a
luxury for some — it’s a necessity.” CST
Medical Spa Association