5 Tips to Stay Relevant in Today's Economy

Jul 18 / Taylor Siemens
While we increasingly hear about the risk of recession impacting our economy, it is more crucial than ever to create contingency plans, diversify revenue streams, maintain strong customer relationships, and continuously monitor market trends and indicators to navigate the risks associated with a recession. 
During a recession, people tend to reduce their discretionary spending, and non-essential services such as aesthetic treatments and wellness services offered by medspas may be affected. As a business owner, the risks of a recession can significantly impact your operations and financial stability.  

Cutting costs in your medspa business can be a challenging task while maintaining quality and customer satisfaction. In addition to evaluating your current operating costs and return of investment on marketing campaigns, there are a few simple strategies and solutions that any medspa can put into place, regardless of their size or budget, to help increase profits! 

1. Review and optimize your supply chain

Assess your vendor relationship and identify areas where you can reduce waste or negotiate better prices with suppliers. As you know, it can quickly get complicated as each vendor has their own method of how they reward their customers with savings, whether it is ordering certain products together, reaching a specific threshold, or simply re-negotiating your pricing structure. Within 2 months, my operations team was able to save our organization an average of $9,000/month with just one of our vendors by discussing the “smartest” and most strategic ways to order with this specific company.  

2. staff optimization

Analyze your staffing needs and ensure that you have the right employees for each shift. Now, more than ever, team members need to be willing to be a “swiss army knife” employee, with the ability to perform multiple tasks and services. Consider cross-training employees to handle multiple tasks, reducing the need for additional specialized staff. In the past, it was typical for nurse injectors to only inject neuromodulators and dermal fillers, but the majority of nurses in our organization are trained to perform services with energy-based devices, limiting the need for another full-time employee on the payroll. If a slower day presents itself, our hourly employees have an option: take a non-paid day off or help with other administrative tasks that are typically outside of their job role, such as working client outreach lists. 

3. streamline your services

Minimize nonessential services by identifying services that have low demand or profitability and consider eliminating or reducing them. Focus on your core services that generate the most revenue, profit, and customer satisfaction.  The more you can combine services in one appointment, the higher average ticket value you will get, with minimal impact to your operational expenses. As an example, are your clinicians educating your clients well enough to add growth factors to their microneedling appointment? If this was done for each client receiving this service, your revenue for that same patient would increase $400-700 based on your pricing structure, with no additional time needed from the patient or team member, and a small increase to your cost of goods sold (COGS). Let’s say you had 5 microneedling appointments in a week. You have now increased your profits by an estimated $2,000 in one week by adding growth factors with only 5 clients. Get those wheels turning on the impact this could have for your business with regards to all of your other service offerings, not to mention the increased client outcomes and satisfaction with multi-modality treatments!  

4. consider adding new services

 I know, this may seem like a contradiction to what I just encouraged you to do in my 3rd suggestion of streamlining your services…but while you evaluate your current list of service offerings, consider what your business may be lacking. Client convenience is key in 2023, and sometimes simply eliminating the need to physically come into a practice demands a higher price tag, while helping your client perceive less spend. What can you add, or enhance in your business that does not require clients to visit your location? The wellness category is on a significant uptick. Now, more than ever, your client base has a desire to age well, no just look good. Adding services such as at-home weight loss programs or peptides allows your revenue to increase without increasing your overhead. Consider this: if you could add a service that only takes and average of an hour of a team member’s time to manage care once a month, with no additional supplies or cost of goods needed in the location, it would only increase revenue with little impact to your operational expenses. 

5. Collaborate with other businesses

 Seek opportunities for collaboration with complementary businesses in your area. This can include joint marketing efforts, sharing space, or cross-promoting services to reduce marketing expenses and attract new customers. It's important to note that each medspa may face unique challenges during a recession, and these strategies should be tailored to your specific circumstances. While cutting costs is important, it's crucial to maintain the quality of service and customer experience. Regularly monitor customer satisfaction and adjust your strategies accordingly to ensure your medspa remains competitive in the market.  

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