As we head into a recession, medical spa owners want to know how to prepare their business to thrive in an economic downturn.
There might not be as much to worry about as you think. When times are tough, people turn to luxuries as a way of soothing the stress caused by economic uncertainty. Sociologist Juliet Schor calls this phenomenon The Lipstick Effect.
NPD Group reports that lipstick sales increased by 48% between the first quarters of 2022 and 2021.
According to a study published in The Economist , during the recession of 2001 and 2008, Chanel and Estee Lauder celebrated an 11% increase in lipstick sales.
It is important to think strategically, though, as the economy shifts in any direction.
Here are some easy steps you can take now to help your company stay ahead of economic changes:
Focus on value, not discounts
While choosing to offer more discounts may seem like the right strategy, discounts can actually hurt your business in the long run. Consumers will become accustomed to discounts and may be less likely to buy your services if they are not offered.
A more strategic path could be to offer value-added offerings, rather than discounts.
In the medical spa industry, there are so many ways to offer creative value-add offerings.
- For example, instead of discounting your neurotoxins, you could offer free skin analysis and consultations with a board-certified dermatologist. The cost of the consultation can be built into your pricing model, making it an additional service rather than a discount.
- You could offer a free hydrafacial for first-time filler patients. A great way to get new patients into your practice, without using discounts to attract them.
Offer Loyalty Memberships
A loyalty program is a great way to keep your customers coming back. By offering incentives for returning, you can reduce costs by reducing customer acquisition and increasing customer retention. There are many ways you can set up a loyalty program, but here are some examples:
- Provide exclusive deals on services like facials and microdermabrasion
- Have your customers fill out reviews of their experience at the medical spa in exchange for upgrades on future visits
Leverage your social media channels
In a recession, it’s more important than ever to leverage your social media channels. Research shows that people trust social media more than they trust traditional advertising.
If you do already have an established social media presence, now is the time to go all-in on your social media strategy. This means consistent content and interaction with comments and DMs.
- Don’t be discouraged if your following is “small”.
- During a recession you need to treat all potential clients as VIPs.
- Even with a following under 500, for example, you could have a few clients that are ready to come in and spend on an expensive laser package.
Try a Patient Referral Program
A referral program is another way to get business visibility even when marketing and advertising budgets are slim. Plus, they’re relatively simple to implement.
To get started with a referral program:
- Create a simple online form that asks clients to provide their name and contact information, as well as which services they’ve already received from you.
- Ask staff members to ask all clients whether they know anyone else who could benefit from their service(s).
- Include an incentive, such as free products or treatments, for successful referrals made through the system (e.g., facial at-home peel).
Cash flow matters
A good general rule for medical spa businesses is to have up to six months’ worth of operating expenses on hand.
Another tip from many financial professionals is to make sure you have lines of credit available.
- Build a strong relationship with your bank and have credit in your back pocket if you need it.
- Once a recession hits, it might be much harder to get the credit and cash flow you need.
Existing clients are your VIPs
While it might seem counterintuitive, in a recession you shouldn’t frantically focus on getting new clients. That could lead to wasting your marketing budget on campaigns and tactics that don’t work.
- Instead, It’s important to focus on your existing clients because they are familiar with you and the value of your services.
- Existing clients are also less likely to change service providers during a recession.
Do what you do best: Provide exceptional service
If a client is happy with what you offer them, they are more likely to stick with you through thick and thin. This is why it’s so important for medical spa owners to ensure that their services are always of the highest quality—and that their prices remain competitive in order to retain these clients.
In addition, it’s vital for medical spa owners to provide value for money at all times. Yes, this can be difficult when operating on thin margins (especially if you have been hit by a drop in revenue). However, providing great experiences for customers will ultimately mean more repeat customers people will talk about their great experiences at your clinic which then attracts new clients!