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Sunday
Mar162008

Key No. 5 to MedSpa Success: Know Thy Competition

magnifyingglass.jpgKnowing your competition inside and out is one of the most important prerequisites to opening an esthetics practice or a med spa.

Ideally, you do not want to put yourself in the middle of a host of established competitors. If you do this, you will be forced to try to take business away from your competition in order to survive. This often results in cost cutting and promotions that have a detrimental result on your bottom line. Ideally, you will be able to secure a location which will enable you to reach a largely "untapped market" in your community. You can also establish a unique "value proposition" and carve out your own niche for your special blend of services and products.

Before you make your final decision on your location, make a detailed analysis of your competition. Clip and study their newspaper ads, visit their web sites, and call them for information. Have someone make numerous telephone calls to listen to sales consultations and gather treatment menus. Have friends and family members visit competitors and schedule consultations and treatments. Oftentimes you will be surprised how the picture painted by the advertisement or web site is a far cry from reality. Once you have thoroughly checked the local competition you will know precisely what services they offer and what you will need to offer to not only be competitive but to differentiate your business from everyone else. Pay careful attention to the services and products they offer as well as the number of employees they have and the credentials of their staff. Determine whether or not they are a true medical spa or not. If they have only a token "medical director" you will want to position your clinic as one in which the physician has active involvement in every step of the process. Enlist the aid of family and friends to make visits to med spas in the area, schedule consultations and treatments to enable you to truly evaluate the playing field. Your research will help you a great deal in designing your own unique service menu and setting prices at the highest levels the market will bear. It will also enable you to offer services and products that no one else in the area offers.

A thorough analysis of the competition will help you make your med spa unique by creating a special niche that will help you stand out from everyone else. Find and fulfill a need that will make you stand out from the crowd, no matter how crowded the playing field is. You might decide to focus on a particular specialty—such as acne treatments, mesotherapy, or injectables such as Botox and Restylane. Other options are a focus on anti-aging treatments or a med spa for men. Many marketing consultants recommend developing a "signature service" which you can promote heavily and which can be your claim to local fame. No matter what services you decide to provide, let your uniqueness be your selling point.

Before you decide to transition to an aesthetic practice or open a medical spa, it is important to research the demographics and locations of competitors in the area you are considering for your location. It is critical that you find answers to each of the following questions before you take the plunge:

a. Do the demographics (i.e., per capita and family income, etc.) of your proposed location support the types of procedures you intend to offer?

b. Is there a need for a medical spa in the area?

c. Is your location too close to a competitor?

You can determine the socioeconomic makeup of your proposed location by gathering information from the U.S. Census Bureau (www.census.gov), the town clerk’s office, and local real estate agencies and business organizations in the area. Check out the foot traffic in and around your proposed site. Excellent foot traffic can provide a significant boost to a start up operation. High visibility, convenience and free parking are all extremely beneficial. Strip malls have turned out to be excellent locations for laser centers and medical spas because they offer both visibility and accessibility. If you have the luxury of negotiating a lease with an option to expand in the future you may want to consider starting small with the plan to enlarge your space and staff as your business grows. A shorter lease with options for renewal is a much safer and lower risk proposition than a long term lease.

Reader Comments (4)

Hi Jeff,

Maybe its my advanced years, or perhaps the eye strain from trying to find some profit in my financials, but I am having a tough time reading the new format on the home page.

Regards,
Mark

03.17 | Unregistered CommenterMark

Mark,
I'm having the tires changed so the problems with me... It should settle down shortly into something that doesn't look like it has it's dress over it's head.

As Jeff outlined above – you have to do your homework, know your market, know your competition and establish your identity in the marketplace.

Here's a sample of some of the metrics we use at MedSurge Advances when doing a market analysis:

– 5-10 mile radius from desired location

– Number of people per household

– Avg Household Income of $55,000 of higher

– Number of Women Age 24-60

– Number of households with varying income ranges above $55,000

We then weight categories according to age and income levels and based on this population and the number of competitors in the area we look at what percentage of that available market you would need to capture in order to run a profitable med spa.

Based on this you can then extrapolate how many calls you will need a day and the marketing dollars spent to generate them, assume a 50% conversion ratio of calls to consults and a 70% conversion ratio of consults to clients ( you should expect much better from your staff once they get their feet underneath them). Plug in an average package price and you will start to get a better idea of what the potential for a med spa is in your chosen market.


Hope this helps.

Good post. I liked how you mentioned specializing in something in order to make your business stand out. I also liked how you emphasized location. Location often makes more of a difference than people realize! Great ideas!

04.22 | Unregistered CommenterJenna

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