5 Reasons Why Growing Your Medical Spa Business Is FAR More Powerful Than Cutting Expenses

Think about it this way; It's much easier to grow your clinic's revenues than it is to cost-cut your way to profitability.

Let's face it. You can't cut your way to long-term wealth or success.

While you'll hear a lot about how to minimize costs and maximize efficiencies and productivity in your clinic (and I'm a big fan of that too), that's only one part of having a successful clinic or medspa that's throwing off mountains of excess cash and expanding multiple revenue streams. Growing your revenue is the most powerful strategy you can use and the only one that will give you the resources to build a business that supports the lifestyle you want, rather than building a soul-crushing hamster-wheel job.

Here are 5 reasons why growing your clinic's business and revenue is more effective than simply cutting costs:

Most businesses, especially clinical physicians, can't simply turn on a switch and earn more. Your medical spa can.

If you're a clinical physician you're trading time for money — a 'job' business model — you can't just start seeing more patients or cram more hours in a work day. (Few physicians ever try to actually earn more money except by working more hours.)

One of the reasons that you opened a cosmetic practice or medical spa is that you're able to leverage technology and secondary providers (physician extenders) to deliver your services. In most palaces you can hire others to perform the actual IPL or laser hair removal treatments under your license and you don't have to push the button on every treatment. That model allows you to extend your license and 'scale yourself' using technology and labor.

There's a catch of course. You have some pretty high fixed costs that are in the tens of thousands of dollars with laser leases, rent, financed equipment and salaries. Those expenses are something that you can mitigate if you're smart (group buy filler injections, used cosmetic lasers, etc. ), but the hard truth is that those costs are part of the business model. Scaling back too far is actually dangerous to your business - cut too deep and you're into the muscle that powers your clinic operations, customer service and employee motivation.

Many docs first thought is to keep monthly costs low and move to commission-based compensation, room rental, or add other low-level services like massage or aroma therapy to try to gain patient flow while not spending anything. While it may look like it's a low risk strategy it's a fools errand because of the distractions and opportunity costs.

Other mistakes like cutting the cost of your Botox treatments as a 'loss leader' (total B.S.) or relying on discounted Groupon traffic... simplistic tactics that waste your time at best, and can cripple you if things go wrong.

The revenue streams I'm talking about may actually involve real business decisions and create an asset that you own - permanent makeup, massage and 'aroma therapy' provided by someone who rents a room in your clinic doesn't.

If you're frugal and want to be sensible, great! Combine earning more with the automation strategy for implementing systems into your clinic, and you have a powerful financial combination. Start by setting sensible short term revenue goals, buy your next IPL or cosmetic laser used, start implementing systems in your clinic, and cut costs mercilessly on commoditized products like taking advantage of group buy injectibles if you can. Do these things and you’ll be ahead of 99% of other cosmetic physicians.

But that's only the savings and productivity part. To be successful you're also going to have to grow.

When you focus on growing your medical spa and creating a bigger pie, you'll benefit from disproportionate and compounding rewards that most other physicians and clinics can't match.

Here's why:

1: There's a limit to how much you can save, but no limit to how much you can earn. Ok, there may be some theoretical limit somewhere but for how big an profitable a cosmetic clinic can be, but it's far easier to add another $10,000 a month in gross revenues than it is to cut $5,000 from the spend. And it's much more fun.

2: The effects compound. If you're bumping along the bottom and have cut all of the fat from your budget, where do you go? You've starved yourself of the ability to grow.

As your medical spa's business grows you gain access to a larger patient network, and the network works harder for you. It's like compounding interest and gives you scale to reach an ever larger audience that's limited only by your ability to execute and lead. You'll also find it's a better message to patients and staff to be able to tell a growth story. Once you learn how to turn the dials and grow your first $10,000 monthly bonus, it’s relatively easy to turn the dial to make $15,000, or $20,000.

In every market the top 3 or 4 clinics take 90% of the revenue. Everyone else fights for scraps.

3: It improves your teams morale and your patient experience. Have you ever seen a clinic that is just barely getting buy? It's a bummer.

Growing your income let's you provide your patients with a much better experience, and moves your clientele upstream and away from bargain hunters that come with headaches and no profit margins.  Moreover, since payroll is the biggest cost you have it's a target for clinics that are cutting costs and novice business leaders often try to skimp on staff.

Growing revenues means that you can attract and pay for a skilled staff that can be trusted to help build the business, not just see you as a stepping stone to the next gig.

4: It allows you to focus on big wins rather than minutia. As a clinic owner you should be focusing on the big wins instead of trying to save money by eliminating what doesn't matter. Earning more is one of the biggest wins you can have. And by reducing the number of things to focus on — and picking major, important items like increasing revenue — you don’t need to worry about trying to keep your staff working at minimum wage. If you’re handling your major goals, the minor details fall out of that. Whether it’s taking a CME course with polar bears, putting your clinic on autopilot, or building other lifestyle businesses on the side, you can manage your lifestyle the way that you want.

5: It forces you to compete on price, which will kill you. If you're competing on price you're in a losing battle. A patient who comes to you for price will leave you for a lower price just as quickly, and there can be only one lowest price. It's a downward spiral which leads to a miserable existence.

6: It gives you options. Growing your sales lets you move from what you have to do to survive, to what you want to do. It gives you options, and opportunity. Personally, I want to live a rich life, and that means spending money on the things I love. Ask yourself whether you'd rather bump along the edge of going out of business and grinding out another payroll, or spend some time earning money so you could live the lifestyle you want. I'm betting you'll answer earn more 100% of the time.

“The way to get started is to quit talking and start doing.”

— Walt Disney

So what actions should you take right now?

First, you have to be convinced that it's possible. You need to adjust your mindset from one of scarcity, to one of opportunity. You need to be convinced that you can step forward in a slightly different direction than you're headed, but with dramatically better results. You're going to need to educate yourself.

The good news is that you're in a fantastic market. Most businesses, especially clinical physicians, can't simply turn on a switch and earn more. With a cosmetic practice you can.

There are three main areas where you can take immediate action to begin increasing your sales and income; getting more patients in the front door (marketing), raising your conversion rates (consultations), and streamlining your clinic operations (systems). Increase any of these and your revenue will increase. Ignore them and your opportunities will slowly be throttled, wither and die.

While we don't yet (as of this post) have our training course on marketing available, we can immediately address the other two areas where you can increase your conversions and streamline your operations.

Whatever you do, take action right now and begin.

Build Your Medical Spa Around Patient Experience & Your Patients Will Be Happier

Focusing on your patients experience in your medspa will result in happier patients, more positive word of mouth, and fewer headaches for you and your staff.

Physicians are often focused on outcomes, many times at the cost of a patients experience, but that's just bass-akwards in elective cosmetic medicine where the real outcome should be measured almost exclusively in long term patient satisfaction and not in visible results.

Unconvinced? Here are a couple of reasons that you'll want to focus on your patient's experience and how you might think about putting experience at the top of your patient interactions:

1. There's new research that shows that purchases made on 'experiences' results in more happiness that spending money on tangible goods. Concert tickets, piano lessons, a fine dinner... all of these elicit more happiness than physical products and the effects last longer.
   
   "Purchasing things like televisions, clothes and coffee machines won't make you happier overall -- but buying experiences maximizes happiness," says Michael Norton in a CNN interview. (He's an associate professor of business administration at Harvard Business School and co-author of the book, "Happy Money: The Science of Smarter Spending.")
2. We humans get additional pleasure from social interactions and bonding across the entire experience, starting with the anticipation and continuing on as positive memories. The difference is really one of degree with the social aspects having significant impact on how past experience are perceived. The result is that 'experiences' have additional reinforcement that happens over time adding to those positive feelings and acting as reminders.

 The focus on patient experience clearly explains how physicians or clinics who might not have nearly as significant outcomes are still able to compete, and in many cases dominate, clinics who focus entirely on the physical results their delivering. It's an important distinction and means real euros and dollars for your clinic.

Medical Goblety Gook Speak

There are a lot of physicians that tend to speak in medical gobbledygook to their patients. I can't see that that's ever a good idea.

The physicians that do the best in the consultation room are those that speak to every patient as though they are explaining a procedure to their family member. There is either no or very little medical jargon, there's some empathy displayed, and the attempt is to make the communication as clear as possible.

If there's one thing that turns most patients off it is a physician to talk down to them. Especially in a cosmetic medical setting where every procedure is elective the way that you communicate with your patients and clients is either making you more money or less.

One of the best physicians that I ever saw in the consultation room was Dr. Ida Bergstrom, she spoke every patient as though they were a great friend. Dr. Bergstrom had a knack for making every patient feel heard and valued. It's simple enough to do if you approach every patient as though you were speaking to a good friend.

It is what you take control of the conversation or consultation and steer it in a specific way. it's a holdover from clinical practice but it has limited benefits in a retail cosmetic medical setting.

The results of this one simple change can add $10,000 or $20,000 a month to your bottom line and make dealing with unwanted resulting unhappy patients much easier.

Embezzlement In Skin Clinics & Laser Centers

Did the $300 a patient handed to your receptionist to cover a photofacial go into the cash drawer... or the staffer's pocket?

American Medical News (1/17, Elliott) reported that medical office embezzlement "is common at medical practices, and experts say the risk is especially high at the beginning of the year."

This is because "patients are paying an ever-larger share of their medical expenses, and, with most deductibles resetting on the first of the year, a significant amount of cash may pass through staffers' hands."

Download the free, members-only report: Medical Spa Embezzlement & Employee Theft Scams

According to a survey released in November by the Medical Group Management Association, "nearly 45% of practice managers reported cash stolen before or after it was recorded on the books." For that reason, "prevention strategies are particularly important to minimize the risk because a business's insurance may not cover the entire loss, which can be significant."

As every physician running a clinic knows, embezzlement by staff is a problem... I'm going to put together some information on preventing embezzlement and finding embezzlers that will show you how to make sure this is not happening in your clinic and how to make sure that it never does.

Submit your own story about medical clinic embezzlement or theft here

Understanding "Core" Physicians

What is the definition of a 'core' physician?

On April 30th, I conducted a webinar for Palomar Medical, Inc. on the topic of optimizing Local Search Engine Optimization tactics to boost your practice on local internet placement and ranking. Soon after the webinar, I was contacted by many physicians with many questions. I felt confident in answering all of them, except for one. And, that question was "what is the definition of a "core" physician"?

I was stumped.

I've searched the Internet for a documented answer and found none. I then perused quite a few physician's websites where it was clearly stated they were "core" physicians. It was also clearly stated that those medical specialties that were not deemed as being "core" were not qualified to perform certain aesthetic procedures. Not to be accused of being "flippant" by a physician as in one of my previous posts, I had thought that it was experience, training and number of successful procedures performed that made a physician "core" in that particular aesthetic modality?

Even on review and educational websites such as RealSelf, all non-"core" specialties were removed.

The answer I received from RealSelf stated : "RealSelf is no longer hosting profiles for participants who do not meet specialty designation criteria set forth by updated RealSelf policies. We have encountered problems with doctors and other medical personnel answering questions far outside their expertise or specialty and, in some cases, even dispensing inappropriate and dangerous advice to our readers. The aforementioned changes have been implemented in an effort to prevent these situations from arising."

Not to elicit any aggressive comments here, and I mean no disrespect to any medical specialty in particular, I just would like to be enlightened as to where the definition of "core" was derived from and what medical specialties that includes?

Physicians & Assets

By Gregory H. Bledsoe MD

With all the concern over the economy and the changes in health care, I thought it would be a good idea to write just a quick post about financial assets.

Most physicians do not understand the concept of financial assets and wonder why they feel like they are working harder and faster for less and less reward.  

Now, I want to be clear, I am not a financial expert or a wealth manager.  However, I have found a few principles that have really helped me personally, so I though I would pass them along to the readers of Freelance MD.

First, it needs to be said loudly and clearly that when a physician first graduates from his or her residency program, they have not "made it" in the financial sense.  Yes, graduating from residency is a great achievement and does signify the completion of a long, difficult training period.  It also usually is accompanied by a significant increase in salary and the ability to live better and spend more.

However, in the financial sense, a newly minted physician is in a horrible financial place.

Most physicians finish residency with significant debt, debt that is made worse due to the young physician's new salary, a salary that places the physician in a tax bracket that precludes the interest on student loans from being tax deductible.  

Next, most physicians have little financial training so they immediately "reward" themselves for all the years of focus and discipline with a "few" nice things.  I clearly remember many resident friends of mine who bought expensive luxury cars and nice homes immediately after graduation.  Since few residents have significant savings, these new physicians simply added to their significant student loans even more debt in the form of car loans and large mortgages.

The problem with all this is that the new physician is suddenly saddled with enormous overhead.  His or her lifestyle looks nice, but at the end of each month very little money goes to savings or retirement or investing in other financial assets that could help increase their overall net worth.  Even those physicians who are aggressive about paying down debt and funding retirement often do not rise as high as they could financially because they make the mistake of pouring their disposable income into items that they believe are assets but actually are liabilities.

Robert Kiyosaki, author of Rich Dad Poor Dad, has produced a couple of very short informational videos (around 2 minutes each) that summarize the issue of assets.  The true definition of an asset is something that makes you money.  While this seems obvious, it is often misunderstood.  For instance, many physicians consider their homes and their cars "assets."  Strictly speaking, these items are not assets since for the most part they take money out of your pocket.  

Here's a short video of Robert defining true assets, and how to differentiate them from your liabilities:

Make sense?

For an item to be a true asset it needs to produce cash for you.  

Physicians work very hard and make a good salary, but most take their disposable income and instead of using it to buy assets, they pour it into items that actually increase the outflow of money from their pockets.  If the physician hits a snag in his/her career-- illness, salary decrease, burnout-- they suddenly realize how fragile their financial world really is.  Without true assets putting money each month back into their pockets, these physicians realize they are simply highly-paid hourly workers who are forced to exchange time for money indefinitely if they are to survive.  This realization is a very depressing concept, and one that I believe significantly contributes to the frustration of many physicians today.

To break out of this cycle, a physician absolutely must understand the principle of investing in true assets with their disposable income so that they begin to slowly wean themselves off of the dependence of their physician salaries.  In the end, a wise physician will have lived frugally, paid down debt, placed money in retirement, and instead of buying "toys" with their disposable income, instead slowly built up a collection of assets that put money back into their pocket and made their physician salary superfluous.  Ideally, a physician will eventually reach a point where their living expenses are covered by the income from their assets and their salary as a physician becomes simply the "icing on the cake" so to speak.  Perfectly executed, this freedom from the time-money continuum allows a physician to see their careers as something they choose to do for whatever reason-- desire, interest, altruism, curiosity, etc...-- not something they are forced to do to continue surviving.  It truly is a life-empowering shift in perspective.

So what are some examples of assets?

Here again, Robert Kiyosaki succinctly describes the three broad categories of assets in the following video:

I hope this all makes sense and you're beginning to get a vision about how you can begin breaking free from the time-money grind through the purchasing and development of true financial assets.  

About: Dr. Greg Bledsoe is a physician entrepreneur that has founded ExpedMed.org and the Medical Fusion Conference. He blogs at FreelanceMD.com

New Medical Spa MD Products Coming Soon!

There are some new Medical Spa MD products under development for our Members.

I've been exchanging emails with a number of member physicians running medical spas and it has me thinking.

I'll first say that I generally don't like consulting with individual medical spas and don't generally do it. Yes, I've opened seven medspas and, yes, I have helped physicians and trained docs, but I decided long ago that the 'medical spa consultant' is most often a hack, has a terrible business model, and doesn't have any fun. That's not for me.

Many of the emails are general in nature; How can I improve my medspa's website, use patient testimonials, finance my clinic, etc... but there are a few bullet points that stand head and shoulders above the rest in terms of where a physician running a medical spa's concerns lie;

• What technology should I avoid or buy?
• How can I get the best training in new treatments?
• How can I improve my business operations?
• How can I drive new patients and increase my business?

There are a few other secondary contenders but these are the questions most often asked.

We've devoted a tremendous amount of time and effort on providing resources around some of these. You can read through thousands of insider comments in the IPL and cosmetic laser forums to see what other physicians and medical spas think of the technology they're using, or why they didn't buy something. There's also a tremendous number of posts and comments about business operations, marketing, advertising and more than a few about medical training, but I've come to believe that there are also some holes in our offering and some places to improve.

While you can use all of the information on this site to make better decisions, there are benefits to having everything put together in a logical format or product that you can use. While we've been fantastically effective in organizing our members and using our combined group buying power to get Select Partners that offer our Members discounted Botox pricing, malpractice protection, outsourced internet marketing, or postcard marketing there's a lot of insider information that's not so easily packaged up and offered broadly.

However, the feedback that I received from our Medical Spa Training Manuals has me thinking that we should be doing more to offer quality 'how to' products that physicians can actually use to address both their internal operations, and drive more patients and revenue.

The challenge has always been that it's just to much work to take the very best of this information, develop a comprehensive, quality product from it and then train an individual do on how to use it. It's just not an efficient model to deliver individually, without some sort of broader distribution to keep the cost at a manageable level for our Members.

But our growth has now put us in a position that we can scale. ; ) So, about a week ago we decided that we were going to organize and produce a number of new information products to address specific needs for our Members. (If you're not already a Member, join Medical Spa MD here.)

These products are not going to be general information, they're going to be specific 'how to' products that give you simple, plug and play directions that you can implement within days.

Medical spa products that we're working on right now:

• The most comprehensive medical spa operations manual ever developed that details specific treatments and procedures, from how to answer the phone, to how to handle cash, to up-selling. This one product took me literally 16 months to write (when you see it you'll know why) and I used it in every one of my clinics every day. This isnt' some crappy 'template' that you'll get from a 'consultant' who couldn't make any money with thier own medspa and now wants to tell you how to run yours. This one product will change your medical spa into a real business that gives your staff the tools they need to perform at peak efficiency.
• The Medical Spa Blueprint. A complete blueprint that speaks to physicians running medical spas or cosmetic clinics. The Medical Spa Blueprint will be a free strategic and tactial overview of the key points you'll be addressing in your clinic.
• How to drive an extra $120,000 in revenue in one month. Yep. You read that correctly. I'm going to offer a product that's the single most effective revenue producing system I'm aware of. I've used it in every medical spa or cosmetic practice I've been a part of to drive revenue and it's NEVER failed to deliver spectacular results. I've used it to increase monthly revenue at a single clinic by up to $120k without canibalizing existing business. It is BY FAR the single best thing you can do to increase sales. The best thing about this system is that you can use it over and over to actually increase your profit margin with full-price treatments that don't erode your business.
• Outsourcing for your medical spa. I started outsourcing a number of business functions years ago and have been running businesses with full-time outsourced team for the last five years. Most people give up outsourcing because they spend just as much time managing their team as they did when they were doing everything themselves. But if you do it correctly, outsourcing can free you to work on your business rather than just work inside it.
• New site for Medical Spa Classifieds so that you can buy and sell your cosmetic lasers and IPLs.
• New site for Medical Spa Jobs.

These products are going to take some time but as soon as we launch we'll make some general notifications. As always there will be no pressure to buy. If we're offering a product that's not for you, then it's not for you. We'll also be offering Members some introductory offers and additional free downloads that well be available in our Members Only area.

If you've never purchased anything from us (you're not alone), consider looking though the offerings of our Select Partners and making a test purchase. See what your experience is like and compare it with going it alone. We're confident that you'll not only have a better experience that you're having with your existing solutions, you'll be getting a better price.

Disability Insurance For Physicians & Medical Spas

In a previous post I discussed the single most important feature of disability insurance for physicians—the definition of disability.

But there are multiple other features of disability insurance you need to think about before you buy additional insurance or if you are buying a policy for the first time.

Before I discuss those features, why exactly do you need disability insurance to begin with? Here are some sobering  statistics to think about:

1. Almost 20% of working age people have a disability—half of these are severe
2. There is a 1 in 8 chance of becoming disabled before age 65
3. Only about 25% of working people with a severe disability are employed
4. It is much more likely (nearly ten times more likely) that you will become disabled than die during your working years

Let’s take a look at the key features you need to think about your disability insurance policy:

Benefit Amount.  Next to the occupational definition of disability this is the next most important feature of your policy. Your benefit amount is related to your specific occupation. So higher risk specialists such as emergency medicine physicians will qualify for a lower benefit amount than lower risk physicians such as internists.

The benefit amount also depends on the income you make since the insurance company won’t pay out more benefits than your current income. Typically you won’t be able to buy insurance greater than about 60-70% of your gross income.

But one common mistake I see most financial advisors and physicians make is that your benefit amount should be correlated as close as possible to your current monthly expenses. If you don’t know what you’re spending today, then how do you know what amount of disability insurance to get? So sit down and figure out what you’re spending before you buy a policy. I know physicians who spend $20,000 per month or more and have disability policy benefits of less than $10,000 per month. Will you be able to get by on disability benefits that are significantly lower than what you’re spending right now?

Elimination Period. This is similar to a deductible in the sense that disability benefits typically don’t kick in until several months after you are totally disabled. In effect you are paying for your disability out of pocket until benefits kick in. The most common elimination periods are 90 days and 180 days. So if you become disabled today and you have a 90 day elimination you won’t receive your first check until the 4^th month of being disabled (7^th month for 180 day elimination period). So this again gets back to the issue of what you’re spending. How long can you get by with your current savings before you need income? If you can’t get by very long, your disability policy should have a short elimination period but if you have adequate savings, choose a longer elimination period to save on the premium.

Next time I’ll discuss other features that you need to consider in a disability insurance policy.

About: Setu Mazumdar MD is an affiliate of the National Association of Personal Financial Advisors (NAPFA) and a member of the Financial Planning Association (FPA), the National Association of Tax Professionals (NATP, and the American College of Emergency Physicians (ACEP). He's the managing partner at Lotus Wealth Solutions and blogs regularly at Freelance MD.

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Your Medical Spa + Groupon

Does it make sense to promote your medical spa with Groupon?

Groupon is a “daily coupon” website. It’s basically an email list that charges advertisers to send out their “coupons” called Groupons.

Many small businesses I’d likely never hear about otherwise send me their coupons this way. I receive them mainly to see what’s up… because the city I receive them from is 2 hours away, I don’t expect to take advantage of them.

I've noticed that for the most part, these are not large mainstream businesses. They are small businesses – spas, bakeries, etc. that likely don’t have large advertising budgets and think that Groupon is a great way to drive traffic without spending marketing dollars.

At Groupon, they have an email list of over ten million people and if you contact Groupon to be included on their “deal-of-the-day”, you can get the word out about your medical spa to thousands of people you would otherwise never be able to reach.

There are usually huge discounts involved (50% or more) to incentivize buyers and the general idea is that by offering a big discount on your products or services, people will try out your offerings and keep coming back for more. On the surface, it sounds like a great way to market your business and I was really excited about the idea until I thought about it some more and did some analysis. While Groupon might work for a small subset of local businesses, here’s why I don’t think Groupon is a good fit for the majority of medical spas out there.

Using Groupon will cost your medical spa an arm and a Leg... and another arm.

You might have read some Groupon horror stories already, but the reality is that Groupon is extremely expensive for a business. If you look at their faq, they give off the impression that running a Groupon campaign is free. They collect the money online from prospective customers, send you a check and mail out the coupons automatically.

What is not explicitly spelled out is that they take 50% of your revenue as a fee for using their service. So given that most Groupon campaigns offer the end customer around 50% off, let’s run some numbers here. Say your product retails for $100. By giving a 50% discount to customers, you will only make $50. After Groupon’s 50% cut, you only get $25 for something you normally would charge $100 for. Depending on what your markup is, it better be more than 400% otherwise you could potentially lose money on every transaction!

What’s attractive about Groupon is that they run the campaign for you and simply send you a check. It’s not until later when you have to fulfill orders with these ridiculous discounts do you realize how much money you are potentially losing out on. Most medical spas that are using Groupon—and there are many of them—tend to try to limit their 'deals' to services like laser hair removal and IPL treatments rather than Botox or cosmetic surgery to limit their exposure to services with high fixed costs. But whatever you're offering, it's questionable that taking a huge loss on hundreds of services will prove beneficial to your clinic's bottom line in the long term.

While I'm not absolutley against using Groupon in any way, there are some issus that you want to be aware of around how using Groupon will actually hurt your medical spa or cosmetic clinic.

Groupons don’t make your medical spa memorable.

I’ve got some experience using Groupon a few times as a consumer and you know what? Every time I've purchased through Groupon, what stands out in my mind after my purchase was not the business itself but how great of a deal I got on the product or service. In fact, I remember talking to friends about what a killer deal I got through Groupon. Not once did I mention any details about the business that I was actually purchasing from. I was too excited about the bargain itself.

Using a Groupon takes the spotlight away from your business. After all, it was Groupon that provided your customer with the coupon and the unbeatable deal. It was Groupon that made your customers’ purchase exciting and fun. As a result, customers are far more likely to brag about Groupon and not your clinic.

Groupon deteriorates the perceived value of your medical spa.

Whenever a store offers an incredible deal or discount, there is this perception that the markup was already ridiculously high. If company X can offer a 50% discount and still make a good profit, then they must be jacking up their prices. Once a customer receives a large discount, it trains them to wait for later coupons and deteriorates the value of your products and services. This is especially true with medical spas since Groupon is saturated with them.

There is this dining card I sign up for almost every year called “The Passport” card which entitles the card holder to a free entree at select restaurants when another entree is purchased. The card lasts exactly one year until it expires and you have to pay to reactivate it. One year, we decided to let the card expire and you know what? We refused to dine at “Passport” sponsored restaurants during this period because it didn’t seem worth it without the card. We were so used to getting a free entree that we didn’t want to pay full price again.

While this principle applies to coupons in general, the price erosion caused by a Groupon are infinitely worse because the discounts are so steep.

You can bet that the majority of the new clients you attract through Groupon will be visiting your competition next month. You've just invited all of these new users to price shop you.

Groupon hurts your loyal clients.

Don’t you hate it when you are a loyal customer of a product or service only to find out that the company started issuing huge discounts for new customers only? This happens all the time with cell phone carriers and it really pisses me off. Using Groupon has a similar effect on your regulars and your loyal customer base.

By taking a loss using Groupon to obtain new clients and patients, you are essentially forcing your loyal clients to make up for your losses. And this is counter-intuitive to the way you should be doing business. Your regulars should be the one rewarded with discounts and perks.

There are 2 possible outcomes when a regular customer sees one of your Groupons and both are bad. In one case, your loyal customer could get pissed off and consider shopping with a competitor. But more likely, your regular customer could buy a S@$% load of Groupons and only pay a fraction of the price for what they normally would spend at your store. In effect, you would be losing out on future business with this customer because you would be taking a loss or breaking even on what could have been a 4X profit!

I've had experience with this first hand through another service. Some of our most loyal—and profitable—clients found out about some discounts and switched to them. All we could do was smile since there was no way that we wanted to make waves with our existing clients. We just quietly folded our program and smartened up.

Conclusion

Outside of the issues I’ve already covered, the main problem with Groupon is that the longer term effects are extremely hard to measure. It might be possible to measure repeat business somewhat but it’s almost impossible to measure the word of mouth effect.

To sum it up, I think of Groupon as a shortcut with major consequences. The attraction is that you’ll get a lot of customers upfront, but once everything is said and done, you’ve lost a lot of money and the long term benefits are questionable.

My general philosophy in business is to focus on the long term. Instead of trying to get a one time flood of customers, why not put forth your efforts on making your business stand out? Be the store that everyone wants to shop at because you are awesome and not because of a coupon. Be the medical spa that offers the best customer service. Be the clinic that gives customers the best experience. Giving a one time discount isn’t going to win over any followers and you risk damaging your medical spas real business.

What's Standing In The Way Of Your Medical Spa's Success?

If you're a physician with a medical spa that wants the freedom to control your career and lifestyle, it's going to demand action.

At the turn of the new year it's a time for resolutions that generally have actions associated with them.

Here are the most common excuses that physicians give for why they can't actually take control of their career and lifestyle and actually do what they want. (You'll also notice that it's the same list that everyone else has.)

It's quite a list and there are plenty of pegs for most physicians to hang their hats on and, indeed, most docs will never have real control or freedom. But, as the wise man once said, the world needs ditch-diggers too.

If you're risk-adverse and choose security over opportunity every time, here's your list courtesy of 99%:

1. I DON’T HAVE ENOUGH TIME.
Extra time, like money, rarely just materializes out of thin air. We have to work for it. If “finding creative time” is a struggle for you, consider getting proactive about carving it out, and doing the most important work first.

2. I’M AFRAID OF FAILURE.
If we really push ourselves, we will fail more than we’ll succeed. But that’s how we gain experience, how we learn, how we grow. The greater failure is to never risk failure at all. Choreographer Twyla Tharp: “If you do only what you know and do it very, very well, chances are that you won’t fail. You’ll just stagnate, and your work will get less and less interesting, and that’s failure by erosion.” 

3. I’M NOT INSPIRED.
Inspiration comes from action, not the other way around. Our friends at Red Lemon Club shared this insightful tidbit from leadership guru John C. Maxwell: “"The whole idea of motivation is a trap. Forget motivation. Just do it. Exercise, lose weight, test your blood sugar, or whatever. Do it without motivation. And then, guess what? After you start doing the thing, that’s when the motivation comes and makes it easy for you to keep on doing it."

4. I NEED TO FIND BALANCE IN MY WORK AND HOME LIFE. 
Living a full, balanced life is a wonderful goal. But does that mean doing less work and having more leisure time at home, or doing better work and feeling more fulfilled? Seasoned non-conformist and entrepreneur Chris Guillebeau makes the case for better work and bigger dreams, arguing that balanced people don’t change the world.

5. I CAN’T OVERCOME MY INERTIA.
Getting started can be hard. Once you’re sitting still, once you’re in your comfort zone, the easiest thing to do is just stay there. As serial entrepreneur Andy Swan has written, one of the most common mistakes when we’re just beginning a project is to “set lofty goals from a resting start.” With images of fame and success dancing in our heads, we set the bar too high, fail to make the grade, and quit because we’re discouraged. Instead, build momentum by starting with small, achievable goals, and work from there.

6. IT’S NOT ORIGINAL ENOUGH.
Originality is immaterial. Filmmaker Jim Jarmusch puts it like this: “Nothing is original. Steal from anywhere that resonates with inspiration or fuels your imagination… Select only things to steal from that speak directly to your soul. If you do this, your work (and theft) will be authentic. Authenticity is invaluable; originality is non-existent… Remember what Jean-Luc Godard said, ‘It’s not where you take things from – it’s where you take them to.’” 

7. I’M AFRAID OF THE COMPETITION.
If someone else is doing something similar that needn’t be a reason to give up. In fact, it’s a great reason to get more excited. As Seth Godin has said, competition validates your idea by creating a category. It also lights a fire under your ass. 

8. I GOT MY EXPECTATIONS TOO HIGH JUST THINKING ABOUT IT…
It’s easy to get high on the idea of executing your idea. You daydream about how great it will be, the recognition and acclaim that will inevitably follow its launch. You build it up so much that the reality of actually executing the idea starts to seem unappealing. Ze Frank calls these un-executed ideas “brain crack” – it’s a dangerous addiction. 

9. IT’S NOT THE RIGHT MOMENT TO DO IT.
Occasionally, this excuse has the merit of actually being valid. Twitter creator Jack Dorsey had the idea for the service back in 2000. Unfortunately, the technology that would help Twitter thrive wasn’t in place yet. But how did he recognize this? Dorsey did a small-scale implementation of the idea that flopped. Even though it failed then, the exercise crystallized the idea in his mind, and Dorsey was able to revive it later when the timing was right. 

10. I HAVE TO PLAN EVERYTHING FIRST.
At this year’s 99% Conference, author and entrepreneur Frans Johansson argued that humans are very bad at predicting which ideas are going to be a success. Thus, nearly every major breakthrough innovation has been preceded by a string of failed or misguided executions. The moral of the story? Spend more time doing, and less time planning.

11. THE PRODUCTION IS TAKING TOO LONG.
Nobody ever said creative execution was sexy. In fact, it’s grueling. Author Junot Diaz battled writers block for 5 years before finishing his Pulitzer Prize-winning novel. Inventor James Dyson built over 5,000 prototypes before he found the right design for his vacuum. And the list goes on. We must find joy in the process of execution, not just the end product.

12. MY IDEA ISN’T POLISHED ENOUGH YET.
Charles Darwin spent 20 years developing his theory of natural selection, and planned to eventually publish his research in a multi-volume tome. But in 1858, he received a letter from the naturalist Alfred Russel Wallace essentially summarizing the theory he’d been cultivating over decades. Darwin scrapped his plans for a tome and quickly published his now-famous abstract, On the Origin of Species. Without Wallace nipping at his heels, though, how long might Darwin have gone on perfecting his world-changing theory? Sometimes it’s best to launch a project before it’s “perfect.” 

13. I NEED TO DO MARKET RESEARCH.
If you think about real, game-changing inventions and discoveries – the electric lightbulb, the double helix of DNA, the airplane – almost none of them had the support of the masses in the early days. Being a visionary means being able to see what other people can’t even imagine. That’s why companies like Apple don’t do market research. 

14. I HAVE YOUNG CHILDREN.
This excuse reminded us of a great piece from writer Rebecca Cantrell, who struggled with the impact her newborn had on her writing. Though initially she lost her will to work as she focused on child-rearing, Cantrell found – in watching her son’s willingness to experiment and fail and never give up – that the experience actually inspired her and improved her writing practice. 

15. I’VE GOT TO PAY THE BILLS.
Here's the big one for most physicians. Going with the status quo, we tend to give high priority to things like wealth and stability. And once we have them, it’s extremely difficult to imagine life without them. (To wit: “The three most harmful addictions are heroin, carbohydrates, and a monthly salary.”) But should these things come at the expense of pursuing big, bold ideas? Paying the bills won’t necessarily earn you a legacy.

You started your medical spa with specific goals in mind but the enjoyment of control and freedom isn't something that's ever going to be handed to you. You'll have to earn it through action.

Freelance MD's First 30 Days

If you've been around Medical Spa MD for the last month or so you may have noticed a few posts by guest authors from Freelance MD, our new sister-site.

Freelance MD is for physicians who are interested in non-traditional or non-clinical medicine as well as information about physician career and lifestyle control. To couch it as being a hit is something of an understatement. Here's the post I just published on Freelance about it's first 30 days.

Freelance MD was launched one month ago today. There have been a few changes.

Greg and I launched Freelance MD after meeting at the Medical Fusion Conference in Las Vegas at the beginning of November. We'd already had a number of discussions about the need but I wanted to talk to physicians outside of my usual cosmetic medicine contacts and listen to what they wanted, and gauge their reaction to what we were thinking about. Well, whatever doubts I had about the need for this type of community were quickly assuaged. I could see that the opportunity to provide a very broad, horizontal platform that focused on providing physicians information, products and services was growing and we were in a unique position to address it.

The conference ended on the 7th and on the 17th we launched Freelance MD in it's current iteration. Now, one month later, we've been astounded by it's growth and it's resonance with physicians. I've been involved with a number of online communities but the speed with which Freelance is growing is more than unusual, it's astounding. Here are a couple of notable milestones from our first thirty days;

• We've grow to almost twenty authors that include experts on topics as wide ranging as physician entrepreneurs, non-clinical careers, wealth planning, investing, and writing. We've passed 100 posts from our own authors, had our first guest post. It's actually been difficult for Greg to get back to everyone as fast as we'd like—but we're trying.
• We're growing fast. Take a look at the growth curves below. For a community site that's just one month old and hasn't launched with an existing network this is phenomenal. As a point of reference, when I started Medical Spa MD it took me more than a year (maybe two) to reach this number of unique monthly visitors. Fast growth often comes with volatility but this trajectory is better than we could have hoped for.
     
  

  Freelance MD traffic From November 17th — December 17th, 2010

  
  10,319 page views an more than 2,000 unique visitors in the last 30 days and 1,500+ unique visitors so far this month! ; )
• We're sticky. Take another look at the image above and you'll see a wide gap  between unique visitors and page views. This shows that the average visitor views slightly more than 4 pages each time they visit. For anyone who knows something about user behavior online, this is a key indication of how 'sticky' a site is and how interested visitors are in the content. The fact that we're seeing 5 page views per visitor literally blows the doors off of most sites, especially since there are 20 blog posts that are visible on the first page. This indicator—even more than the growth curve—is something to get excited about since it denotes that readers are heavily engaged.
• Readers are recommending us with 500 Facebook likes, more than 1,000 stumbles, and an unknown number of tweets. (You can do us a solid by helping out here and posting a recommendation to our favorite social networks.) If you look up in the right corner of the site you can see the number of times that we've been referred through popular social networks. (The Twitter number will change because it relates to the specific page you're on, not an aggregated total. That's why you'll see changing numbers under different posts.) We've also just added the new LinkedIn 'share' button. To be honest, I'm not sure exactly what to think about what's going on there since I've never seen numbers like that appear so fast before.
• We've partners with some fantastic organizations. You'll notice that our Select Partners list is growing and we're also excited about that. With partners like Health 2.0, ExpedMed, and the Medical Fusion Conference, we're tapping in to a number of other communities and events that we can add value to.
• We've expanded our community to include Freelance MD groups on LinkedIn, Facebook pages, Twitter feeds... You can connect with the community through any or all of these. (You'll get bonus karma for connecting with them all.)
• We're building out promotions for some of our partner organizations. If you haven't visited the ExpedMed CME Polar Bear Adventure to investigate your adventurous side or thought about attending the Health 2.0 Spring Fling in San Diego, you should take a look.

The numbers above are pretty impressive, but we're not going to be resting on our laurels any time soon. There's too much to do. We'll undoubtedly have some issues as we grow, but we're committed to pushing through these obstacles and making Freelance MD the single best community for action-oriented physicians on the web.

In the very near future we'll be adding memberships, downloads, a non-clinical physicians jobs board and even more authors to the mix.



Are Medical Societies Irrelevant For Physicians?

By Greg Bledsoe MD

Ask yourself this question: "Why am I in my medical society?"

A few years ago I took the plunge and stopped hoping to become an entrepreneur and actually stepped out and gave it a whirl.  It was a crazy time. 

I learned very quickly that starting a business always takes a lot more time and money than you originally envision, and in short order I was scrounging for capital to fuel my dream.

It was during this time that I made a decision to let my medical society memberships lapse.  I had never considered it before, really, and as far as I was concerned, being a part of medical societies was simply part of being a physician-- I paid my dues and they supplied my, er, membership.

When I was in academics, my department paid my society dues as part of my contract.  I never thought about the cost since I didn't view the funds as coming from me (there seems to be a moral here somewhere...), but when I entered the world of community, or non-academic, medicine, suddenly the costs associated with these memberships became very real.

Five hundred dollars for this membership.  Three hundred a year for that one. It quickly added up, but I got a special tuition discount if I attended the annual meeting and I even got an occasional journal delivered to my mailbox with my name stamped on the front.  It all seemed very official and made me sort of feel like part of a special group, so I dutifully paid the dues and congratulated myself on my support of the furthering of the intellectual aims of XX society.  

However, as anyone who's ever been in business can tell you, at some point tough decisions have to be made, and for me, the relinquishing of my membership in these societies was one of those tough ones.  I believed in these organizations.  I liked being associated with them.  I enjoyed seeing my name stamped on the front of the journals and I even flipped through an article or two when I could.  Walking away from something that made me feel so "involved" made me feel isolated, vulnerable.  If being a member of these organizations made me feel included, leaving them made me feel...alone.

That was almost three years ago.

Since then, the various ventures with which I'm involved have finally started to right themselves and for the first time in quite a while I have begun to have the ability to get involved once again in medical societies.  In the past few months I've begun to ponder joining this society or that one, trying to figure out which one would be a better fit and from whose membership I would learn the most skills-- and meet the most talented leaders.

After marching down this path for a little bit, I finally stopped and asked myself a very simple question: why?

Why was I considering membership in a medical society?

It's true that when you begin a company your mind becomes much more keenly aware of the theoretical "return on investment" (ROI) than before.  I began asking myself the typical ROI questions I had asked myself at the beginning of any of my entrepreneurial ventures:  What would I gain from the investment of time and money in this organization?  Would my funds be better directed elsewhere?  Could I gain the same benefits without investing the relatively high annual dues?  How would I verify that my funds would be used appropriately and at what point would I be able to have an impact in the overall mission of this organization?

My honest assessment after a sit down talk with myself and a review of the available information before me was the following: For the most part, medical societies do not offer a significant enough ROI to warrant the investment required to participate.

I know this sounds like heresy for some, but let's review the facts...

From what I can tell, the reasons given for a physician to be a member of any medical society today basically revolve around three points.  

First, societies are said to offer camaraderie and networking opportunities for their members.  Second, societies supposedly help promote medical education and proper practice standards among their participants.  Third, medical societies, through the old "strength in numbers" adage, are in theory better able to represent their members politically and promote and pass legislation that furthers good medical practice.

Let's review these arguments in broad daylight and see if they hold water.

A generation ago, being a member of a medical society was really the only way a physician could connect with other physicians outside their basic social circle.  You joined the medical society of X in order to associate with its members, get invited to its galas, hear the latest research, and hopefully move up the ladder of influence of said organization as you progressed in notoriety and seniority.  This model was the same model used in the business world with the Elks Club, Rotary International, and the corporate culture at large.  Young, idealistic individuals, regardless of their skill set or motivation, waited in line patiently for their name to be called and an opportunity given to begin climbing the rungs of leadership within an organization, whether this organization was the Elks, IBM, or the X Medical Association.  One didn't even consider leaving if you had any career ambitions or longing for social connectedness.  The arrangement was what it was, and you just had to adjust.  

This model worked for quite a while since it was easy for senior members to control the benefits of membership, and parcel these benefits out only to those junior members who walked the line. 

In the corporate world, the personal computer revolution and especially the internet explosion, completely imploded this hierarchal regime.  No longer could senior corporate members exclusively hold the benefits of membership.  Enterprising upstarts could easily, from the comfort of home, begin a company on the web and not only leapfrog their old positions, in some cases they leapfrogged their entire industries.  The recent movie The Social Network , while criticized for not being 100% accurate, at least tells the gist of the story-- that a couple of Harvard undergrads turned the world on its ear from their dorm room.  

The internet has become the great world flattener, and while Richard Florida is correct that innovation still occurs in geographic regions, the ability to take your idea to the world in an instant is a tremendous power that prior generations did not have.  Furthermore, with the internet and more specifically, the social networking ability on the internet, junior members in every organization can instantly, and freely, associate themselves with whomever they choose all around the world.  Gone are the days when being on the outs with your local or even national medical society is a professional death sentence.  Individuals now have the ability to join any number of interesting networking groups, or even start their own.

Along this same line of thinking, the days when medical societies controlled medical education are long gone.  With the click of a keyboard, I can find medical education on almost any topic and I can access it at any time. I don't have to wait for my professional journal to arrive, and anything cutting edge will be posted on the web long before it hits my mailbox anyway. 

When I pay my fees to earn CME credits, I now have the opportunity to choose what topics I hear, and whom I hear teach them.  No more sitting in a conference lecture listening to the droning of Dr. Oldenkrinkle simply because he's the chair of the education committee. I can learn from the best teachers at any time in the comfort of my home and earn my CME credits on my own terms.

So with regards to the power of networking and the educational opportunities available, I would have to say that there are as many, or more, opportunities outside of medical societies today as there are within.  And when you consider that most of the membership societies available to the modern physician are free, why would you pay $300-$500 to be a member of a medical society for the networking or educational reasons?  It just doesn't make sense.

The last reason-- pooling our strength to become a stronger political lobbying force for X issues or specialty-- is the one most often cited in the recent past by modern physicians as a reason to be involved in a medical society.  Matter of fact, this one reason was a big one for me.  I mean, any objective person can see that physicians need a strong lobbying voice in Washington, if for no other reason than simply to attempt to counterbalance the influences of the trial lawyers and their ilk.  

However, I describe this as being cited in the "recent past" because I haven't heard it from any physician recently.

No, if there was one glorious revelation that came into full view during the healthcare debate in this country, it was the cowardice of the self-serving leadership at the helms of most medical societies in this country.

I don't think any physician will be fooled in the future with the "give us your money and we'll stand up for you" line that motivated us in the past.  What the healthcare debate clearly revealed was that when medical societies say they work for their constituents, they do truly mean this.  It's just that their constituents aren't the dues-paying members that constitute their ranks-- they're the entrenched bureaucrats in their leadership.

Physicians watched in horror as medical society after medical society lined up and endorsed Obamacare, and then spoke to America as if their members were in agreement.  The American Medical Association was the worst offender, selling its soul to keep intact its lucrative, exclusive right to the CPT billing codes that fund its bureaucracy.  It was appalling in its transparency, and no physician who saw it will ever forget it.

So what to do as a modern physician?

The point here isn't to argue that no medical society is worth joining.  Many societies do good work in certain areas and there are physicians who derive a great deal of pleasure from membership in a society or two of interest.

My point in this post is that being a member of a medical society is simply not the knee-jerk necessity it was a few years ago, and there's no credible reason to join any society unless you really feel that their mission meshes with yours and you want to be involved.

More importantly, I believe that medical societies need to begin asking themselves what real value they give their members.  Today's young physician will not be coerced in the traditional way into membership, and if value isn't apparent, many will simply walk away.

So will I eventually join a medical society?  

I don't know.

Maybe.  

I'll need to discuss it with my friends on Facebook and get back to you.

Greg Bledsoe MD MPH is a Board Certified Emergency Medicine physician and the founder and CEO of ExpedMed and the Medical Fusion Conference. He blogs at Freelance MD.

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Interview With Jessica Wadley, Former COO Of Spa MD

This episode of the Medical Spa MD Podcast introduces us to Jessica Wadley, former COO of Spa MD, who brings years of Medical Spa business experience to share with our members.

In part 1 of this podcast we discuss a host of issues around medical spa operations, sales, marketing, startup costs and staffing. We've got some agreement and you'll want to listen to how our thoughts (and strategies) differ around commission structures for staff and internal operations and training.

We also discuss how Spa MD went from $3m a year in revenue to over $12m in gross revenue within four years so you'll want to hear that.

Medical Spa MD {3} Dr. Setu Mazumdar & Physician Wealth Management

Episode 3 of the Medical Spa MD Podast: Dr. Setu Mazumdar of Lotus Wealth Solutions discusses physician wealth management.

The interview in this episode is with Dr. Setu Mazumdar of Lotus Wealth Management. Dr. Mazumdar is an MD who's now changed careers to become a financial and wealth management advisor specifically for physicians who are looking to get their house (and medical practice) in order.

We discuss how physician training does not equip docs with the knowledge and skills that they need to actually accumulate wealth, and how you can make some changes that give you control over your finances. Dr. Mazumdar details common mistakes that docs make and how they can be avoided.

If there's anyone who you'd like to hear interviewed or you think should be a guest on Medical Spa MD, please let us know or just leave a comment.