166: Unlocking the Profitability Matrix - How our Secrets can Help you Measure your Practice‘s Performance

November 11, 2021

Keep up with the latest strategies on how to manage your medical aesthetic practice's ROI projection and learn more about this matrix we have prepared exclusively for your business! In this week's podcast, we'll share about coming up with the perfect scheme to meet your desired profitable outcomes.

As a business owner, it's important to know about how much money you can make off of your business, so why not use our Profitability Projector? Master the tiers and packages that lead you to success, familiarize yourself with our downloadable Profitability Projector, nurture leads from online ads, and most importantly, master the ways to effectively manage your business' Return on Investment.

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Transcription:

MATT COFFY: Alright. Another episode of the wonderful Profit Engines with our Practice Bloom stint towards the aesthetics, not all the time do we do aesthetics, but of course, we talked to a lot of people who are just don't smart. I've got Erica on with me, say hi. Hi. All right. So we do this once a month and go through some diagnostics. This one happens to be very specific towards one of the things that we get asked all the time, which is "How much money am I going to make?" Kind of important when you start to do marketing, to figure this out. Now, this is a pretty detailed, I guess you could call it, matrix. That's what we've named it. But I think at the end of the day, you know, what it really is, is profitability, projected. So what we've done here is we've broken the typical procedures down for a med spa aesthetics or cosmetic surgeon, dermatology, you know, basically a lot of the stuff that relates to that business.

MATT COFFY: Let's just call it in general medical aesthetics. And I think the challenge with a lot of our clients, when we start speaking with them, is return on investment. And that's the number one driver of the reason why people are in the business, is because the procedure, can turn a pretty good investment return if you do the right things in the right order. So what we're going to talk about is a couple of these, and I'll invite you if you want, listener or watcher, to download this particular matrix. If you're so interested, we will provide the link to that. If you are looking to get some of this information at a quick glance and make some, maybe better decisions on how to go about maybe putting package pricing together so that you're always going to have a decent return on your investment and your efforts.

MATT COFFY: But right now let's just go through it and walk down the lane and we'll talk, Erica, and I will talk about this. we'll, we'll take the first one, which is a common procedure, which is Botox. And we're going to, I'm just going to highlight as we move down the, the, lane here so we can see Botox. Initially we see a lot of the first sessions coming in at, 2 99 ish or whatever. So we put $300. That's maybe one session. Then we can talk about that real quick, because it's important for people to understand. So Botox, obviously, multiple areas that typically someone doesn't always come in for one area it's maybe a three area. So just talk a little bit about that and the reason why I'm pointing the follow-up here is that initial and followup, can be done, in synchronicity, meaning that you could book it all in one shot, or you could book one and then work for the other, but let's talk a little bit about the difference between 307 50 here. You can maybe chime in a little bit, Erica.

Speaker 3: Yeah, absolutely. So when we run these types of ads, we are going to draw in leads at whatever the promotion is. Many times we run a $10 per unit. That's the standard lead gen ad that you know, many patients or many clients run for new patients. there is a certain proportion of, of these leads that are going to come in and only get 30 units of Botox, on their first treatment, which would equal $300. Now, if we have a, a great injector, a good sales team, we've nurtured the lead. Well, many times they'll get more than 30 units or they may even upsell into fillers. And that's how we're getting into the higher tickets of seven 50. And, and even beyond actually,

Speaker 2: Right So typical person, maybe they come in for a frown lines or whatever, go do one session. And then the common thing would be to upsell them to three sessions on, you know, in total as a, you know, a sort of a bargain, right So it's 300 for the first session and then seven 50 for three altogether. So you're getting, you know, discounted rate. and of course, you know, I prefer not to go into the per unit because I'd rather do per area because then units become inconsequential. It's just the per area. So, you know, that's why we always try and suggested you a hundred dollars off or $50 off or whatever the number comes out that makes sense for your practice, but doing it areas as opposed to units makes a little bit easier on trying to gain some profitability because obviously some areas are not going to be as dense, obviously as others, but let's just say you did a frown areas, maybe above the temple, whatever, pick a pick three spots, chin who knows, right You, you picked three spots and you say, let's do the whole thing. And now, you know,

Speaker 3: The average area is 20 to 25 units.

Speaker 2: Right Exactly. So at the end of the day, now we have an initial or someone comes in and then we're hoping to get a follow-up and we based this on just reality, right Because you've run a spa, Erica, you kind of know how this works from a physical layer for doing this for 10 years, I've been doing the marketing for 10 years. We kind of come to the conclusion that a good solid practice should be getting a return of investment about $750 on a Botox patient. If they're upselling and being consistent with sort of the marketing, which means that, they contact the patient, the patient should come in and then even if they don't get it on the first time that they're able to contact a patient at the secondary time, or at least get the patient to follow through on some other service.

Speaker 2: And the reason why we're trying to make this specific is that when we get down the line here, you'll understand why you need to do this. Not just, because it's, you know, mechanically built this way, but let's get into the next thing, which is now we have cost per lead. So what I'm always interested in is people don't understand that cost per lead and Facebook is pretty cheap. It's 10 bucks on average to get a lead from Facebook. The only thing is we have a Delta here. And what I mean by a Delta is that not every lead turns into a sale, not every lead turns into a person walking through the door about one out of six or one out of seven will then turn into a lead that will walk through the door. So our CPB here is our cost per booking.

Speaker 2: So booking, you're going to end up about $67 on average for someone to literally walk through the door of your practice to get serviced. Now, one thing you have to consider is how well do you close So they may walk through the door and they may be excited and they, they liked the offer, but maybe they don't always take on average, we see about a 70% take rate. So the closing percentage CP is 70% of those people who've walked through the door. So let's do the math $10 per lead. One out of roughly, we'll do 15% here. It's either the one in six or one on a seven, which comes to the middle of that, which is one, which is basically one seventh. so we end up with 67 for a cost per booking. Then 70% of those people who come through as booked patients will then end up as procedures or actual done cash register ringing sales.

Speaker 2: So that gives your cost per acquisition, which is the thing you need to know in this business of $113 per acquired patient. They're both toxic. So if you looked at the dichotomy of this, which is one 13 verse, your $300, a typical cash register, verse one 13 for your cost to acquire the customer, your initial ROI is 2.6%, which leaves you with $187 of profit. Now, that being said, this is why we say you must sell multiple packages because $187 is not going to make you a wealthy practitioner. It will make you solvent, but it will not make you, to the next layer. Now, if you went and had the followup secondary procedures, we'd see an ROI of 6 37. Now your full average ROI is 6.6 times. Your spend that's that one 13. So we really like to see ROI over five or greater.

Speaker 2: In fact, if you look at this whole line of services here, you see most of them are above five, obviously. So this is why we make sure that when you're doing this is to start to think about package pricing. So when someone comes in, you can take your ROI from 2.6 to 6.6, in this case, by just making sure that you're offering a package off of those initial offers that are in the market. And that's the most critical thing as well. And we haven't got the cross-selling upselling, but in Facebook, that is the complete story for a Botox. And this entire document has everything. Laser hair, CoolSculpting, micro mini, IB, Threadless, M sculpt, hormones, weight loss, things, hydro facial hair restoration, tattooed cellulite, laser light bulb, factory eSports sculpture, filler. And there's obviously more than this, but these are the common ones. And I'd like to take another example, which I think is super, super cool right now. Let's talk about thread lifts and why it's a great place to be in Threadless.

Speaker 3: So thread lift is one of my favorite ads these days, because the cost per leads are so low with such a great ROI. the starting price for thread lift is $1,500 on the low end. So even if you're not upselling patients, the ROI is still amazingly good in the majority of patients do tend to upsell and do more than one type of lift. you know, these lifts can be eyebrow lifts, mid facelifts, neck lifts. there's all kinds of, creative things that people are doing now with, with threads and, you know, thanks to things like Instagram, they're becoming very well-known and people are really excited about threads,

Speaker 2: Right So let's go through the numbers cost per lead. Again, $10 a lead in Facebook, one out of seven or one of us say one out of six points out by, I guess you could say, we look at this and go, it's hard to put 15% cause you can't really do one out of six and a half, but that's about what the theory is. It's what we've experienced from overtime. So that one out of six and a half people ends up being a cost per acquisition, again, of, of 67, same as Botox, right So we're in the same vein. Now our closing percentage is going to be a little less because it's more invasive of a, of a procedure. It's not the same as Botox. It's a little bit more intensive and you're not going to close as many, but when you do close them, you're going to end up with a different type of ROI because of obviously the initial set of initial revenue is going to be much higher and then the follow-through is going to be a lot higher.

Speaker 2: So we do the same math. We look at a 67 cost per booking. We close at 60% of those patients. We get an acquisition procedure costs of 1 0 6. So we're actually at now $106 per acquisition. That's a turn of 14 per 14 times return on investment of marketing, which ends up being an initial ROI of 1300, almost $1,400 with a full set ROI at 2,800. So huge difference, right So this is, this is a, almost a 10 X difference between Botox. So that was why we talked to people. When they say, Hey, what would you like to do in your practice And we look at sort of having some different goals based off of what we can obviously mind from Facebook from a marketing perspective, because there's always going to be an X amount of patients in an area not everybody's going to be Threadless.

MATT COFFY: Of course, these are volume-based strategies because we know there's a lot more Botox patients than there are thread lift patients. But again, it all comes down to where do you put efforts And I think what we find is that a lot of people come to us and say, Hey, I want to do a HydraFacial right, because it's an easy thing to do. But then we look at the numbers, let's talk about this, right So we asked a lot of people, Hey, if we're going to do some ads, let's make sure that profitable. Now there's nothing wrong with running ads to bring people through to the practice. But you can see in this case with HydraFacial because the cost is so low, meaning that we're, we're actually ending up almost in a negative position. You can see, an initial ROI of minus 27, right But again, it could be a loss leader to bring the patient in, to up sell them to another service. So we understand that in some cases you may need to do this, but this is the whole point you want to do stuff that's profitable. You want to stick in the five X or greater ROI. Then we want to do full procedures. And we want to make sure that we're getting a good turn on our investment. So let's talk quickly about CoolSculpting because I think it's one of the biggest and most profitable procedures because of the return and the flow-through of consistency and volume.

Speaker 3: So I think Matt, if we look at CoolSculpting, it tends to be successful time and time again, because it has so much brand recognition. So because of that, you know, cost per leads for, for body contouring are at $40, which is actually quite low for body contouring, you know, on procedures where people are spending on an average, you know, we have the initial at 1250, almost, no one comes in and, you know, spends 1250. I would say the average person would probably be starting with four cycles, which runs on average of about 2200 even. So you have, you know, a great ROI, for a body contouring procedure. Closing rate is pretty strong if the patient is a candidate, because it does have so much, you know, brand recognition, people call and, you know, they mentioned CoolSculpting, you know, like it's a brand. and, and that's the thing. And the other great thing about CoolSculpting is many practices are being given, you know, co-op dollars from Hourigan to also help offset some of these costs per leads, which is another great thing,

Speaker 2: Right But we still can't get away from the truth was, is that the cost per booking is going to be around $267 to bring up CoolSculpting patient in, and of those you're going to close 55%. So your acquisition costs are really high. It's more 13, but you're getting volume because it's, it's an easy volume metric sale. There's a lot of people looking for CoolSculpting. So you get a lot of these volume. So your initial ROI, even at the very, very low end at 1250 is 8 37. And then your full ROI is almost $3,000. Obviously we, we have these numbers up here based on our experience in what will happen. And this is the sort of the high end is column where we see the maximum amount of volume of, of, return for your efforts with bringing a patient in selling them, maybe on the max of what you could get them for, if they want to do multiple sessions or multiple areas where in the initial is going to be your sort of, at least your minimum.

Speaker 2: So we, we love to see these numbers because it helps people frame up when they put investments in. So a lot of the times, people who ask us who want to get started with this business, the first thing they ask is how many patients can you deliver And it's from this math that you can see, it's really determined on the budget. So if you want, for example, 10 Botox patients, well, your answer is going to be one 13 times 10, if you want 10 Botox and then 10 laser hair, it's one 13 plus one 70. So you're looking at, this is literally a 2,800. So this would $2,800 of marketing on Facebook. So that would bring you 10 of those, each of those patients, and then your yields are here and somewhere between here and here, depending on how much you end up as a initial ROI or a full average ROI.

Speaker 2: So let's move down the column here and I'm going to, bring this up because I think it's important. The difference that we have in Facebook and in, sorry in Google is dramatic. So let's move to Google. Now let's talk about this. So now things change, right So now we have, our, our cost per lead goes up because we're in a different matrix with more competitors, what our Delta comes down. So now our Delta, instead of being one out of six, six and a half patients is one out of four patients because in Google, the patients have got more proclivity to close because they're looking directly for the solution and Facebook. It's more of a, let's just call it, an interruption marketing strategy where you're interrupting somebody through a feed, and you're getting their attention where this is a direct search.

Speaker 2: So you're, you're going to come up quite a bit in your Delta for your, candidacy, the closing race also go up typically in pay-per-click because your closing rates are going to be a little bit strong, not all the time, but in sometimes because those patients are more apt to want to get it directly in, they're coming hot. They're a little bit higher. So we get a higher cost per acquisition in general, not much, but in this case, significantly enough to change the ROI. But let's talk about what's the differences between a Facebook patient and a paperclip patient. Okay.

Speaker 3: So I think Matt, you touched on something very important that the Google patient is someone who is pretty hot. They are searching for the procedure. They tend necessary, you know, net based on like the keywords that we're putting into these campaigns, they tend to be bottom of funnel leads. They're not in research mode. So for instance, you know, we're negating keywords such as reviews or complications or before and after pictures, you know, things that people would be searching. If, if they're researching the procedures, we're putting things in like Botox near me, Botox costs, Botox doctors, things that people would be searching for where they're calling your business. And they're saying, I want to make my appointment. I'm ready to have the service. And that's why I'm number one. You know, the, the Delta is so much higher. And then the, the, closing percentage is also generally a little higher. You know, they're ready to be treated. They're not in research mode. so long as they can afford the service and they're medically a good candidate, they have a very high percentage in this case, 70% of moving forward with the procedure.

Speaker 2: And another thing to think about, which is a unknown is the time. So if we go back up here, a Botox patient comes in one out of six and a half we'll close, but the question is, how long does it take this person who comes in and costs $113 for an acquisition verse This person who comes in for $170 per acquisition, and the, the effort involved from the front desk and from the, let's just say, operational field, the interruption marketing is convincing, meaning that you're going to have to think about. You have to convince the person that you are, the person or the practice, the doctor, the ma the PA the person that can be trusted with this procedure in Google. That's a little different of a spectrum because they're already looking in they're there, they've made a decision right there. They're clicking button forced the issue.

Speaker 2: So they've, they're not console. Let's just say going to be on the question and answer, you know, version of what we find in, in, in this is why people prefer, if they can to put money in Google, because they don't have to do as much work. They pay more for that. But this difference of let's say $50 or so of cost per acquisition is the time it takes to convince this patient. Right So we know that, people who run a lot of Google ads versus people who run a lot of Facebook ads, we know the difference because they know who's a different who, what type of patient that's coming to you will be like, it's different type of spectrum. Now. That's why we usually run both Facebook and Google ads, because each one of these procedures has a different level of let's just call it challenge.

Speaker 2: And when you get to something like a fat transfer, right, where we look at, where we know that the people who are doing fat transfer in, especially in Google, you're getting a hot patient that shouldn't take too long to convince, even though the cost per acquisition is $480, the time to get that person over, because they've probably done their research. They've probably done what, what you'd expect, which is that they've watched a bunch of videos they've looked around and then they see an offer, when they finally decide that they want to make that zero moment of truth and click the button to contact you. The chance of this person converting over is going to be pretty good return on investment. It's pretty good. Now, when you look at the, the same thing for, for Facebook, we see, a different, cost per acquisition because that customer is typically going to be a little bit more, not that they're not, in convincible, there's certainly the S it's the same customer.

Speaker 2: It's just, they're in a different phase of their decision-making, strategy, not all the time, but most of the time when you're interrupting someone, it takes a little bit more time as opposed to directly seeing them. And so that's that extra amount of acquisition cost based off of the fact that your funnel there is going to be a little bit further down the pathway in Google. And so that's why we see a lot of the practitioners who are just literally just want to create a machine. They'll run a ton of ad, cause they're just, don't want to spend the time they're looking to just get people direct drive people right through the door. but we know that we can get low cost leads. And especially for people who are initially starting in this business or are young in the business, or have got a good set of staff and be closers, they'll use Facebook at their advantage because they'll be able to get a much better Delta of cost per acquisition, compared to any thoughts on that. One,

ERICA BREINIG: One thing I do want to add that, a lot of people really like about Google, is that those leads tend to have more of a chance to get into your follow category. So those leads tend to have higher ticket values than the Facebook leads. They're not necessarily searching for the lowest price. Whereas you, you touched on Facebook ads, we are interrupting the user on the platform. So we have to get their attention generally with a pretty low offer.

Speaker 2: Right Great point. Cause this is the one thing that people don't realize that we try and explain to them, which is that when you are talking to a Google lead, the conversation is typically pointed towards getting appointments set directly on to account, meaning they're calling and they're directly asking for a booking because typically they're not going to be as involved in the sales process, as you would be with Facebook, where you're giving them an offer, you're interrupting them. And now they're trying to figure out who is this and why should I go Where in the case of Google, you're looking at someone who has then clicked on a specific ad and said, okay, I want to do this. So two different types of mentalities, although both are the same at the end. It's, it's literally the same conversation. It's just where they enter the funnel.

Speaker 2: Now what's interesting. And I think what most people can see is that we have some huge numbers here and we have some negative numbers here, and this is the last point I want to make. So the question is I will bring up four modes because we have a lot of people asking about hormones. Now this is a big subject, and I'll start with Facebook. Hormones comes in at negative one 18, and you say, how can this come in Well, a negative. So why would anybody do something that's going to cost them money to give, get them a patient Well, because we know that if someone comes in and hormones, it's a multi-dimensional challenge and a long-term relationship with multiple involvements. And usually it's a year long or greater return on investment because someone who comes in for homework, hormone challenges is usually going to be involved in fixing that process over time.

Speaker 2: It's not a one and done, and this might involve shots, pellets, diet changes. It could be a mirror mirror, a multitude of, of mirrored, procedures, which all tend to be together. But what's interesting is that if you're, and we'll just do the numbers here quick and Facebook. So an initial let's say constitutes $165. Your cost per lead is $25. Your Delta's 15%, that's one out of six and a half. That puts your cost per booking in 1 67, your leads, et cetera. You close people at 70%. Your cost per acquisition is $283, and you can see your, your initial ROI goes negative. But what's interesting about this is it's super positive because we know that there's only going to be only, maybe one out of 10 or one out of 20 that are net that are going to stick it. One session, they're all going to come back.

Speaker 2: And the average is a year and up to $1,500 worth of services because they are coming in for long-term relationships with that practitioner, which leads itself to also other services. So we know that the end of the day, this also is a huge process because you now are going to go into weight loss. You may be going into other services that the practice provides, and even into the nutritional side where you can do nutritional support with, the, you know, some of the other elements of what most of these, I would say practices want to do, which is they want to get people back into a subscription model where they come back, whether it's product or, a multi, threaded conversation around a package. And so that's the last thing I wanted to bring up was just thinking about packaging services so that you can get to these higher echelon followup services or multiple what I would call wins.

Speaker 2: And especially when you think about Ivy therapy, weight loss, hormones, any of the services that we have that are really dedicated towards, making sure that our customers who are our clients have an idea that when they go to market and they talk to customers that they are involved in packages when they come out to you, let's just say the first consultation should be around solving it over multiple packages. And I think that that's where, when you start doing package pricing instead of unit pricing, or, I, what I would really say is this it's sort of short selling the practices ability to solve bigger problems. It really ends up being a much better deal. Can you talk about packaging a little bit Eric, because I think this is where you see the critical components of how this is really the business itself in sort of monitoring how we see some of our clients go from really, really initially starting to branch out in their structure to getting to the hundreds of thousands of dollars per month in returning investment from very small spends.

Speaker 2: And I also want to mention one of the ones I really like, which I know we're not doing specific Facebook and Google cost per acquisition in our, you know, we're not showing the numbers specifically per practice. And we do those quite a bit in the other episodes. But when you talk about IVF therapy, especially when people really could make a huge, huge number, and we're seeing it, especially with BHRT as well, where they're coming on for that initial for a very short price of it, then they're getting the subscription and we're starting to see success quite a bit with this, especially, I think we had one in Florida, that's just going nuts right now. Talk about that a little bit and we'll wrap it up.

ERICA BREINING: Absolutely. So to touch on the hormones, that particular client, they charged the 165 for the first two months, that's their hook, that's their offer. And then actually goes up to 250, I believe each additional month. So it kind of, it increases, as the patient is more comfortable and starting to see results. and that's a great way to do it. The other thing is definitely with packaging, some of these other services, like Botox, fillers, CoolSculpting, and many of the newer offers that we're running, we're actually running tier offers. So it might be claim, you know, 20 units of Botox and get five units free, claimed 30 units get 10 free. we do the same thing with fillers where, you know, one syringe is a $50 discount, but you know, two syringes may be 200. And what we find with that is that people get excited. They want to buy the higher package so that they're getting more savings for their money. And then those higher tickets is what is increasing the ROI and making our clients successful. So obviously the higher, the average higher, the ticket, the more successful you'll be. And that's why having those tier strategies, those packages, ready to explain and sell to your patients is critical to your success,

Speaker 2: Right So you can use this cheat sheet. This link will be in the bottom of this video. If you're on one of the social channels, or it will be in a link within the content in this piece of material that you are seeing right now. And thank you for watching this, we're super excited. The business itself of this aesthetics world is a $26 billion business. There are literally thousands and thousands and thousands of patients out there looking for you to work with them. This will give you a cheat sheet to see your initial ROIs, your full RIS. You should be falling somewhere in between the two. And now you can make a better decision on where you want to place your that's on what ads you want to run. Obviously they all have a different layer of volume metrics, meaning that there's X amount of patients in a given area for each one of these services. But you can bet that the standard services that you're seeing here are active. So if you want to get into this business, now you have a little bit of a cheat sheet, about what we're seeing in the market. And of course the always can help you out with making some decisions if you need help, certainly contact us. Thank you, Erica. Appreciate this great, really good diagnostic. And I hope everybody enjoys the ability to have a download and that take away that they can review.

Speaker 2: We'll see you in the next episode.

Speaker 3: Bye everyone. Thank you.

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