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Trends and truths: From offsite locales to the P&L of the cross-sell, most medical spas win by remaining firmly rooted in the physician's good name


Mr. Light
National report With the number of medical spas growing exponentially in recent years — from some 700 in 2003 to nearly 1,500 today according to Feedback Research Services — trends are emerging that provide clues to which strategies are working and which aren't.

STANDALONE, FRANCHISE MEDSPAS SUFFERING One prominent trend that has become evident in the past year or so is that stand-alone spas don't appear to be faring nearly as well as spas integrated into existing medical practices, Jeff Russell, president and chief executive officer of MedSpa Financing in Las Vegas, tells Cosmetic Surgery Times .

"We started noticing medspa failures in Spring 2006, and when we looked at which ones were doing really well and which ones were doing poorly, we determined that the stand-alone medical spas were the ones really having difficulty," he explains.

The reasoning for opening a separate facility for cosmetic surgery patients is logical: Patients who are well and seeking improvement to their appearance are separated from patients seeking treatment for medical maladies.

Dr. Harris
But the investment necessary for opening a stand-alone spa makes it a greater risk and increases pressure to generate more business. "Physicians may need to drop $700,000 to a million dollars on a second location, whereas they may only have to spend about $200,000 by integrating the spa into their practice — so it really can be a huge investment," says Mr. Russell.

"You need to do a lot fewer Botox injections on a $200,000 loan versus a $900,000 loan," he adds.

Medspas linked to franchises also have been struggling, and even though they only make up a small percentage of such facilities, many doctors in franchise agreements want out according to Eric Light, president of the International Medical Spa Association and president of Strawberry Hill Group Consulting, Cincinnati.

"I can tell you every doctor I've spoke with has wanted out of their franchise," notes Mr. Light.


Dr. Casas
Without naming names, Mr. Light says he knows of at least two major medspa franchises that are facing lawsuits from franchisees, with the key complaint being a lack of marketing.

"The ideal premise for a franchise would be to start in one location and expand regionally to establish a national brand. But almost all medspa franchises are lacking in national marketing for their brands, and doctors really need that," he explains.

CROSS-SELLING, BRANDING KEY Whether or not a medspa is part of a franchise, marketing can be very tricky territory for physicians whose traditional role, after all, is fundamentally to try to treat problems so that patients don't have to come back.

That approach, of course, directly contradicts the repeat business that's needed for a profitable medical spa, and some physicians may simply have trouble wearing hats for both marketing and medicine.

"The key to longevity and success with a medical spa is cross-marketing, and some physicians may not be comfortable with that, but it's necessary in order to be successful," observes Mr. Russell.

"Patients may come in for laser hair removal and you need to ask if there is anything else they need to change. You let them know about Botox or Restylane and at the same time perhaps recommend a physician-directed skin care program at home. It's constant selling," he adds.

Monte O. Harris, M.D., co-founder of Cultura Medical Spa in Washington, D.C., agrees that medical spas challenge doctors to come up with entirely new business skills, but he says physicians can avoid the hard-sell by using other strategies such as building their own unique brand.


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