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Balancing Medical and Esthetic Services

By: Adam Dinkes
Posted: January 29, 2010, from the January 2010 issue of
Girl reads the label of a bottle amongst shelves of products

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Differentiation vs. low cost. Differentiation is always the more optimal choice because it allows you to charge a higher price for your services; however, some very notable corporations have opted for a low-cost strategy, which has often led to great success. The best examples of companies that use low-cost strategies are McDonalds and Walmart. Both continue to achieve incredible profitability because they stick to their strategies and provide lower costs for products than their competition.

With differentiation, you can leverage the client experience and the added comforts that come with spa-like services in order to charge higher prices. Everything that is not low-cost uses a differentiation strategy. Examples include Mercedes-Benz, Coach Leatherware and the Ritz-Carlton Hotel Company, LLC. These brands offer the perception of higher value, service and quality; therefore, they can charge more for their products.

To capitalize on differentiation in your medical aesthetic practice, consider offering unique procedures, combination treatments, value-added services or special amenities to your patients. Find out what procedures, treatments and services are offered at your competitors and discover ways to provide more value or unique menu items that are specific to your practice. Differentiation doesn’t always mean spending more—simply offering a stress-free environment can be enough to set you apart.

The competitive landscape

No matter which strategy you choose, the lesson is to stick to one and be sure that you coordinate it with your service offerings. As part of understanding your position in the marketplace, you need to assess the competitive landscape. Unfortunately, there are no widely available public statistics or data sources with this information; therefore, you will have to rely on feedback from patients, staff, friends and family. Another option is to talk with your pharmaceutical vendors, because some offer consulting services or benchmarking capabilities. Although these usually measure financial metrics and patient retention, they can add credible data to your analysis. Note that there may be a fee associated with such services from pharmaceutical vendors. There are a few possible outcomes to this exercise. Perhaps your vision and reality are completely aligned, or maybe your vision is not clear to patients. Either way, the ultimate goal is to be sure that your points of difference are clear on every level.

Based on the understanding of your position and the competitive landscape coupled with the strategic vision for your business, you have the foundation on which to build a clear and definitive strategy that will ultimately dictate the services and treatments you offer. It will also help determine the breakdown between esthetic and medical treatments within your center.

A 50/50 split