However, as any successful business owner will tell you, the numbers are half the game. You don't have to love numbers to run a successful aesthetic practice or laser clinic, but you do have to be familiar with specific financial metrics and pay attention to them if you want to thrive.
3 Key Metrics for Aesthetic Practices
1. Treatment Times
2. Lifetime Revenue per Patient
3. Acquisition Cost
We've heard time and time again, that time is money! The longer the treatment takes or, the longer the patient is in your waiting room, the fewer treatments you can conduct during a week.
A simple formula to predict or forecast revenue is:
Treatment revenue per patient x Number of treatments per week = Weekly treatment revenue
Keeping everything else the same, if you can increase the number of treatments performed per week, you will also increase weekly revenue. You never want to rush clients through the experience or make them feel like just a cog in the machine. Instead, you want to have a smooth patient intake process, simplified scheduling capabilities, and patients moving through their treatments seamlessly. (We know that scheduling is essential during 2021 when we still need to socially distance patients to limit contact with each other while waiting. Of course, you should also be increasing sanitization procedures, which may also increase treatment times.)
Lifetime Revenue per Patient
Because of the way laser technology works, most aesthetic practices and laser clinics are doing more than just a one-time treatment. Laser treatments such as hair removal and tattoo removal require multiple treatments, which create a need to track revenue throughout a client's visits to your practice. Also, many laser and aesthetic treatments are complementary or have a similar audience.
For instance, if someone comes into your laser studio for tattoo removal and has a great experience during their multiple sessions, there is an excellent chance you can interest them in hair removal or other services you offer. Asking someone, "What other services might you be interested in?" on their intake form can be quite telling. Some clinics use this type of intake form to even forecast demand. For instance, if you have "Hair Removal" listed as one of the choices under, "What other services might you be interested in?" you can see how many people check that box and determine if it's a service your clients would want.
If you have enough clients interested in a service you don't offer, you can feel pretty confident that if you brought that new service to increase your lifetime revenue per patient. Some tattoo removal clinics have doubled their Lifetime Revenue per patient by adding additional services like hair removal.
After you determine the average revenue you receive from each client, you can determine how much you can spend on marketing and advertising to obtain each one (aka, acquisition cost). Think about the numbers here: if your average client is worth $10,000 over their lifetime, how much do you want to spend to obtain that client? If you spend $500 to earn one client, is that worth the $10,000 in revenue they'd generate?
When thinking about this equation, be sure to stay focused on profit because some treatments generate more revenue but have higher expenses than others. Examine your current marketing/advertising budget and determine how much you are spending per client.
TIP: Make sure to keep track of where your clients are coming from as well. The primary sources for obtaining new clients for most aesthetic clinics are:
- Organic search (Google)
- Paid Search (Google Ad Words)
- Social Media (paid and unpaid, primarily Facebook and Instagram)
- Direct traffic
Knowing how a specific client first comes to you can also help you determine where to invest your resources and focus your attention. If you see many new clients coming to you from referrals, you want to make sure you have a solid loyalty and referral program. If you see many new clients coming through social media, double down on it and start to post more frequently or hire someone to manage your social media for you.
2021 Aesthetic Practice Planning
To help you prepare for what 2021 has to offer, Astanza is very excited to welcome Mark Fenner, Scaling Up Coach and Strategist, to co-host a webinar with our VP of Marketing, Brian Hasenbauer. During this one hour webinar, we'll dive into five key points to support your business planning and success, no matter what comes your way:
- What are you passionate about? Do you have core values, or are you "soulless?"
- Your Culture and Your People - Who would you keep? Who don't you want ever to show up again?
- Huddles - Not for just when it's cold out
- Metrics - We do beauty, not data, so why does it matter?
- Strategy - What do hedgehogs have to do with anything?
Learn how to assess your culture strategy routines, optimize your strategic goals, enhance your team's focus and measurement, and nurture planning routines for increased accountability and success.
The webinar, "5 Keys to Success for Your Aesthetic Practice in 2021," will air live on Thursday, January 14, 2021, at 1:00 PM CST. All registrants will receive a recording after the live stream—register to watch this free webinar by clicking here or below. See you then!