Laser & IPL Hair Removal Regulations In Dubai

As in other places in the world where regulatory bodies aren't keeping up with advancing technology, the Dubai Health Authority saw that cosmetic lasers and IPLs were being purchased by hair salons and spas and being used to treat patients.

It's interesting to see how different countries deal with regulation and just how much they use the regulatory bodies of the US, Canada and Europe as base lines to implement their own regulation.

Here's a link to the Dubai Health Authorities regulations for Laser and IPL hair removal wich is interesting both for what it includes, and what it doesn't:

The number of facilities offering to remove unwanted hair through the use of lasers or similar medical devices is growing in the Emirates of Dubai.

By adding non-invasive and minimally invasive therapies to the beauty saloons services, beauty saloons start to treat patients instead of treating clients. This regulation is intended to be the fundamental regulation that will govern patient safety in any facility providing laser or similar medical devices hair removal services in the Emirate of Dubai.

The persons, establishment, public or private facility shall cease laser hair removal services with effect from August 31st, 2011 if the facility did not meet the laser hair removal regulation requirements.

Top 5 Male vs Female Non-invasive Cosmetic Treatments

Are men getting more nonsurgical treatments?

With all the talk of men making up a growing percentage of cosmetic treatments, it's just not the case as the infographic above shows.

Top 5 Medical Spa Treatments In 2011

The top nonsurgical treatments in 2011?

1. Botox: 5.7 million treatments (up 5% from 2010)
2. Filler Injections (Juvederm, Restylane, Perlane, etc) 1.9 million treatments (up 5% from 2010)
3. Laser Hair Removal: 1.1 million (up 15% from 2010)
4. Chemical Peels: 1.1 million (down 3% from 2010)
5. Microderm: 900,000 (up 9% from 2010)

Source: American Society of Plastic Surgeons

Are Groupon Deals Killing Your Medical Spa?

There's a deluge of Groupon offers from Medical Spas who are using cheap laser hair removal treatments to gain new patients... Is it working?

This Groupon tactic is used by skin clinics who are desperately trying to get new clients and don't know how to market effectively or drive perceived value.

Let's take a look at some of these offers and run some numbers on how effective, or ineffective, this will be for your medical spa or laser clinic.

Here's the first of the offers for laser hair removal that I've received from a local laser clinic in the last two weeks. (I think I've received five or six.)

This Groupon offer is from Enlighten Laser Cosmetics of Bountiful, UT.

Okay, so let's take a look. Enlighten is offering an 84% discount on laser hair removal from a starting price of $617 for a savings of $518.

The starting price seems about right for what the average cost of most 6 series laser hair removal treatments are in the area so that appears about right. Since they've sold 700 treatments the can't be unhappy about that since it appears that they're getting swarmed with new clients. Let's dig a little deeper.

The selling price is $99. Groupon takes 50% so Enlighten is taking $49.50 for each sale. They may have sold many more than 700 but let's go with that number. So, with 700 sales at $49.50, Enlighten is bringing in a respectable $34,650 from Groupon...

So let's break down that number and see what we find.

With 700 sales at an average of 6 treatments we see that that gross number of $34,650 comes in at a mere $8.25 per treatment. ($34,650 / 700 = $99 / 6 treatments = $8.25 per treatment)

Not so good.

That's $8.25 before any labor, rent, treatment tips, appointment scheduling or anything else. It also ties up around 4,000 or treatment room time that this laser clinic won't be able to use for other treatments. They'll also have to deal with all of the support issues; phone calls, appointment setting, consultations, equipment depreciation and the inevitable complaints and patient issues that arise any time you're treating a patient population of 700 individuals.

If you've ever sold gift certificates you know what I mean. You sell a boat-load in December for the holidays and then starve in January and February as your rooms are booked delivering the services and no money's coming in.

So, what is the most likely scenario?

Enlighten laser clinic is going to skimp on treatment time.

Instead of performing a complete treatment, the staff is going to be under a lot of pressure to get these patients in and out. One likely scenario? They'll cut a 45 minute treatment to 30minutes. They'll perform skip treatments where they're not covering the entire area but treating every other one. They'll have a waiting room stacked six high or schedule patients only on off hours... All of these can lead to exactly the opposite result that Enlighten is looking for, happy repeat clients.

I'll also note that as I've spoken at length about before, the people buying these Groupon deals are coming for price, and they'll leave it just as quickly... Not the patients you're looking for.

Here's another laser hair removal offer from Lisse Laser & Aesthetics Medical Spa in SLC, UT.

This offer arrived in my inbox early this morning so it just started. They have 101 sold deals now but it doesn't end for 24 hours so they'll probably sell many more. (Note: While I wrote this post their sales have climbed to 371 in about 40 minutes.)

Lisse Laser & Aesthetics Medical Spa is taking a much sneakier approach. They're listing their value at $2000 in value.

Here's Lisse's Groupon offer:

...for $145, you get six laser hair-removal treatments on the lower or upper legs (a $1,000 value for women, $1,400 value for men), lower or upper arms (a $700 value), or Brazilian bikini area (a $1,000 value for women, $2,000 value for men)

So again, six treatments but at least they're making an extra $23 per patient. Let's do the math again.

$145 per sale / 6 treatments = $24.16 per treatment.

Lisse is going to have all of the same issues and problems with scheduling, service, appointment setting and the rest as well.

(I'd be interested to hear how those medspas that are using commission (which I personally hate) to pay their staff feel that this kind of discount effects both the level of service and the commission structure. If you have a thought on this please comment.)

And there's another problem.

Selling your services at this type of discount positions you in the marketplace as the cheap player in town. You'll never be able to control your pricing. You'll never be able to create steady, repeat buyers that pay a premium for your services. You'll never be able to bring in the bigger treatments and you'll always have cash flow issues.

• Read: Your Medical Spa Pricing, Cognitive Dissonance, & How To Charge More

Instead, you'll always be scraping along at the bottom of the barrel... if you can survive this type of cut throat slash-and-burn price war.

I can see that Groupon is doing a great job of selling their deal to laser clinics just by the endless stream of deals.

For Groupon this is great. They just made $34,650 from Enlighten by sending out an email... but Enlighten is the one who's stuck delivering all of the services, making all of the appointments, dealing with the customers, and putting their reputation and business on the line, including the potential of any issues that hit their malpractice insurance or medical licensure. (I'm not saying this will happen, just that the risk is entirely on Enlighten and the physician, not Groupon.)

Undoubtedly, there are some occasional successes and I've heard from clinics that claim that they love Groupon, but I've never heard from a physician who was paying the bills that this worked well. It's often the staff that like this since the clinic is now busy, but the physician owner is the one that's not making any money and still paying out.

Here's a quote from a business that ran a Groupon offer.

After three months of Groupons coming through the door, I started to see the results really hurting us financially. There came a time when we literally could not make payroll because at that point in time we had lost nearly $8,000 with our Groupon campaign. We literally had to take $8,000 out of our personal savings to cover payroll and rent that month. It was sickening, especially after our sales had been rising. So the experience jaded me, and the interactions with the few bad Groupon customers we had jaded our staff. After all of this, I find myself not even willing to buy Groupons because I know how it could hurt a business...

This business owner goes on to tell of her experience that the Groupon clients also lambasted her business on Yelp and other review sites with negative reviews.

If you have an opinion on this or experience with Groupon, please leave a comment.

Additional posts on Groupon:

• Medical Spas & Groupon Group Buys
• Your Medical Spa + Groupon
• Groupon & Fee Splitting
• Groupon post on Techcrunch

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.

Cosmetic Surgeons enlist patients to fight the Botox Botax.

Cosmetic surgeons are asking for patient help to fight the Botox Botax. Here's what the ASDS (American Society for Dermatologic Surgery) is giving it's members to solicit the support of Botox consumers: Here's the form.

The U.S. Senate health care reform bill  (Patient Protection and Affordable Care Act) contains a proposed 5 percent tax on "elective cosmetic medical procedures."  While this may look like an attractive option to Senators looking for ways to pay for health care reform, we know that:

• Cosmetic medical procedures taxes are an unreliable and risky revenue source, which has proved to be a failure at the state level;
• A tax on cosmetic surgery discriminates against working women;
• The definition of cosmetic procedures is arbitrary and almost impossible to administer; and
• enforcement would necessitate review of patient medical records by tax collectors, a clear invasion of privacy.

Please enter your zip code below to be connected to an automatic email system which allows you to send a quick message to your Senator asking him/her to vote against this tax.

I've received an number of emails about this over the last 48 hours. Is anyone worried that this 'Botax' will hurt your medical spa, skin clinic or cosmetic practice?