Surgery and market shifts

According to ReportLinker and other credible research organizations, the cosmetic services market would reach $40 billion or more by 2013 with a compounded growth rate of 5.2%. Cosmetic surgery product demand (eg, dermal fillers and laser dermal resurfacing) created by manufacturers and suppliers will drive this movement. In addition, a growing list of less-invasive procedures, products, and home devices is also expected to create new challenges and consumer awareness regarding the benefits of seeking a specialist for the consumer’s facial surgery needs.

The current frenetic shifts in the cosmetic surgery marketplace resemble the changes that reshaped refractive surgery (laser-assisted in-situ keratomileusis [LASIK]) for solo ophthalmologists. The expense of the requisite technology forced the ophthalmologists who provided LASIK surgery to aggressively advertise, resulting in the procedure becoming a retail service offering. Now, minimally invasive surgical (MIS) procedures and nonsurgical services have created a new business front for those with the latest and the “hottest” technologies. With smart marketing, the advent of new technologies, and the dwindling reimbursements from medical insurers, business-savvy cosmetic specialists and non–core cosmetic physicians are taking advantage of the opportunities to enter the cosmetic services market. Use of à la carte facelifts, lasers, and fillers now allow postponement of full facelift procedures and present a new opening for more competition and a new market from patients who never before considered facial surgery. There is even a new movement to meet patient needs through concierge delivery mechanisms. According to the ongoing statistical reporting by the American Society of Plastic Surgery, facial procedures for the eyelid and nose and facelifts are collectively the second most popular surgical procedures after breast surgery in America.

Steps for your strategic action plan

Facial plastic surgeons must take steps now to secure their practice with internal and external marketing before any further commoditization of the specialty. The laws of commodity (better known as the laws of supply and demand) serve the consumer and will shortly take place as a varied clinical labor pool, and competition increases. True and false perceptions in the form of equipment wizardry, posh venues, and availability will decrease the fees paid by new and current patients. Thus, the consumer is in control.

We are now observing the effects of commodity (supply and demand) in the current promotion of surgical and nonsurgical fat resolution procedures in the pushing of price and credit before mentioning the physician’s name and credentials. Shrinking profit margins, new competition, branded technologies, and new surgical techniques are here to stay. There are now irreversible shifts for all consumer-paid medical services. These shifts will not reverse themselves in the near future, so it is time for cosmetic surgical specialists to enhance their practice’s bottom line and ensure market share. Smart practices can flourish with ongoing relationships and a commitment to affordable, ongoing, incremental facial surgery calibrations presented with a personal touch and well-trained staff that can market the practice.

Starting with the recent recession, consumers sought cosmetic services that offered immediate gratification, that is, a quick fix at lower prices. We observed many facial specialists who responded by creating medical spa–type operations within their practices and advancing skin care services. In the process of maintaining cash flow from this market, some physicians entered into problematic relationships with aestheticians and other practice extenders who lost sight of the main mission of the practice: performing surgery.

Steps for your strategic action plan

Facial plastic surgeons must take steps now to secure their practice with internal and external marketing before any further commoditization of the specialty. The laws of commodity (better known as the laws of supply and demand) serve the consumer and will shortly take place as a varied clinical labor pool, and competition increases. True and false perceptions in the form of equipment wizardry, posh venues, and availability will decrease the fees paid by new and current patients. Thus, the consumer is in control.

We are now observing the effects of commodity (supply and demand) in the current promotion of surgical and nonsurgical fat resolution procedures in the pushing of price and credit before mentioning the physician’s name and credentials. Shrinking profit margins, new competition, branded technologies, and new surgical techniques are here to stay. There are now irreversible shifts for all consumer-paid medical services. These shifts will not reverse themselves in the near future, so it is time for cosmetic surgical specialists to enhance their practice’s bottom line and ensure market share. Smart practices can flourish with ongoing relationships and a commitment to affordable, ongoing, incremental facial surgery calibrations presented with a personal touch and well-trained staff that can market the practice.

Starting with the recent recession, consumers sought cosmetic services that offered immediate gratification, that is, a quick fix at lower prices. We observed many facial specialists who responded by creating medical spa–type operations within their practices and advancing skin care services. In the process of maintaining cash flow from this market, some physicians entered into problematic relationships with aestheticians and other practice extenders who lost sight of the main mission of the practice: performing surgery.

Step 1: focus 45 years and up

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  Focus on the significant facial surgery market of patients 45 years and older because they have

  
  
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  The funds to pay for cosmetic services

  
  
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  Few stable investment options and are prepared to make an investment in their bodies

  
  
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  The belief that they need a specialist to operate on the most visible part of their body

  
  
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  Concerns that the results of facial surgery are both a highly personalized and usually the result of a compounded set of procedures

  
  
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  Requirements that may require fine-tuning. This population is less inclined to look for bargains and more inclined to inquire about specific credentials and avoid discounts.

For the aforementioned reasons, we find the facial plastic surgical specialist in a unique position, momentarily exempt from the full impact of the current shifts, new competition, and the effects of commoditization. In fact, we expect that true facial specialists with a strong-branded Internet strategy will greatly benefit from the promotion of minifacelifts, consumer shopping, and any necessary fine-tuning that might result.

Step 2: trim the fat in marketing

Until the recent recession, many practices overlooked the opportunities to optimize the cost of overhead. The focus, historically, has been on the topline practice income. Many tried to offset the business downturn by presenting the same services using the same expensive marketing methods, including discounts, specials, and the use of Yellow Pages and print media. Comprehensive, thoughtful, and discriminating adjustments are needed to take advantage of the shifts in the consumer’s criteria for selecting medical cosmetic specialists. Up until 3 years ago, a typical successful cosmetic surgery practice within our client base generated $2 to $2.5 million a year and worked on a profit margin of 30% to 35%. This typical client would spend $40,000 to $60,000 per year on advertising with Yellow Pages and received a 4- to 6-fold return on their investment. Apart from patient referrals, the Yellow Pages were one of the most reliable sources of new patients. In addition to this expenditure, the typical client would spend an additional $20,000 to $30,000 on other forms of promotion, including staff training and, sometimes, electronic and print media.

Today, those same clients budget no more than a total of $35,000 to $50,000 for practice promotion and achieve a 10-fold or more return. The new-found efficiency is achieved through an intelligent integration of Internet promotion along with other less costly promotional programs based in social media marketing, which is enhanced with staff trainings. To address the current shifts and the need to cultivate the facial surgery portion of your practice, allow for a marketing budget that is at least 8% to 12% of your expected income for the next 12 months. Moreover, according to our observations of our clients and prospective clients who contact us for assistance, we see the following important changes taking place:

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  Demand for facial surgical and nonsurgical cosmetic procedures has been strong during the economic turndown and continues to be strong through 2011.

  
  
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  Overworked staff are expected to market services without proper training on phone skills and Internet-response protocols.

  
  
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  Fees are being cut to bring in more patients, with reduced profits to the practice, instead of focusing on promotion of branded procedures, unique procedures, added-value offers, and creative internal marketing programs.

  
  
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  There is a significant reduction in the use of Yellow Pages and print media and an increased use of creative marketing on the Internet. We recommend that the use of Yellow Pages be retained but spending no more than $500 to $750 per month.