In this episode, Cameron is joined by Alex Thiersch, Founder and CEO of AmSpa, and they discuss strategies for growing and expanding medical spas, with a focus on prioritizing patient retention and leveraging technology to optimize patient acquisition and retention. They emphasize the importance of education, collaboration, and adapting to industry trends to build a successful medical spa business. They also discuss the growing demand for aesthetic treatments and the need for more providers to meet this demand, as well as various strategies for enhancing the patient experience and growing a medical spa business through referrals, social media, and treating patients well.

Transcript

This is medical millionaire the podcast, helping your Med Spa increase in status, visibility and profitability. Join your host as he dispels myths, shares trends and gives you actionable steps today that will take your medical practice to the next level. Here’s your host, expert marketer and founder of growth 99 Cameron Hemphill,
hey guys. Cameron Hemphill, here your host for medical millionaire. Hey guys. Thank you so much for taking the time to tune into the podcast. Our goal is to give incredible value and insight into the medical esthetics market. So if you guys are a practice owner, you’re looking to get into the space. You’re looking to grow your practice. All of these episodes, they’re 100% designed for you and to help you take your practice to the next level. So guys, today, I have a amazing guest that is going to be joining us. This guy has spearheaded the amspa industry for many years. I went to his first conference shoot, I want to say five or six years ago, something like that. And I want to introduce you guys to the CEO of am spa, American Med Spa Association, Alex starsh, Alex, welcome to the show, man. Thank you so much for your time. Hey, you know, appreciate the introduction. I feel a little sheepish after that, not sure what to say.
You were at the first you were at the very first, the first event back in like, what, 17, I think. So, my gosh, it seems like a long time ago, but also a short time ago as well. That’s right, yeah, that’s awesome. That’s awesome. We’ve come a long way since then. But appreciate the support. Yeah, this last conference that at the win was incredible. I think the most amount of attendees I’ve seen, and also exhibitors and talks and now there was just a lot of value. So I want to thank you guys for everything that you do for the industry and really helping everybody educate themselves and continue to their growth patterns. Yeah, it was, it was our, it was our biggest event, kind of by far, as far as total attendees and number of exhibitors and number of courses and everything, and it’s been, it’s been incredible to watch. I have to be honest, when I, like, first started all of this, having a conference like that, was never in my, you know, within my, even my dreams, like, I wouldn’t say, wildest dreams, I’d never even thought about it. So it’s been, it’s been pretty crazy to see it develop. And really, what we just want to make sure that we’re doing at all times is bringing everybody together. This industry is such a cool industry. And unlike a lot of other industries that I’ve been a part of, including, you know, issue industries like plastic surgery and a little bit and dermatology, even in this industry, in esthetics, the the excitement and the ability to share in this industry is just, is so palpable. And everyone is very, very collaborative. And so we just love, we love putting it on, it’s, it’s a lot of work, but it’s definitely worth it. Yeah, no, absolutely. I totally agree. And like, for the for the audience, you guys, for the listener, I can tell you right now, like I do talk a lot about conferences and how much value they bring if you’re looking to grow your practice, whether it’s interacting with somebody from an exhibitor standpoint, that maybe has a piece of technology that can help you with your workflow, or if it’s networking with your peers that are doing something strategically different, clear across the country, this is a way to come together, collaborate, learn, and I would encourage you to come in with the right mindset, right and come in with the correct mindset in terms of, like, hey, what am I going to get out of this conference? Because you’re going to have to physically leave your location. You’re going to have to, you know, get in the plane. You’re gonna have to show up and put in the work. And so I see folks that come into it with the right mindset really leave with just another piece of information that can help them in their business life, their personal life, and ultimately grow their practice. So I’m a big fan of it, and I always learn from every conference I go to, and especially as far as
well, I appreciate you saying that, you know, we when we
So, I mean, I’ve been around in this industry for a while, and when I first, when I first got into it, I was, I was going to, you know, Vegas cosmetic surgery, so VCs, and which was at the Bellagio in Vegas. And then there was a conference called, which is no longer around, called Mastering the business of esthetics that was put on by Dr Steven Diane way back in the day. And what I loved about those conferences is that they really focused on, you know, kind of the business side of things. And so that was always our approach. Is that the there’s so many ways to get clinical training. Now we do, of course, we do a ton of clinical training at these at the conference, but the main thing is, we want you to be able to to build your business, connect with people who are in the exact same position that you are. And so, you know, we’ve just gotten lucky. I think because the people of this industry are so excited to be there. They’re so excited to.
Get together and to learn and to exchange information. And if you’ve noticed this camera, but like, there’s not, of course, there’s competition right within med spas. But whenever I’m at at a medical spa show, it’s what I always see is, yes, there’s competition, but, but, but nobody’s trying to withhold information. Nobody’s trying to, you know, be squirrely, or kind of, you know, underhanded with with what they do, because there’s people that in the in the room that are, that are their competitors, everyone is just very open, and they want others to succeed. And they and they, it’s just, it’s very refreshing for a conference, and I appreciate you saying all that. And you know, we’re so lucky that we’ve had the growth that we had. We were this year, we had around 17, almost 1800 attendees. Last year we actually had more attendees, believe it or not, but it felt bigger this year, and it felt so but anyway, we’re moving on. We’re getting ready to sign additional contracts to be at the win for the next several years. So we’re ready to roll
Awesome, awesome. Yeah, I love, I love that facility. It’s a, it’s just, it’s a great place to to connect. It’s a, they have a an amazing vibe and atmosphere and so many things to do, like during the conference and outside of that and so, so I’m excited 2025 I’m sure is going to be amazing. I’m sure you guys are probably already gearing up, planning for for that event. It takes a tremendous amount of time and effort to plan for an event. Is that going to be in April of 25 I know you guys moved it used to be in January of every year it is. Yeah, we our typical where we had always planned it, and kind of, what I had envisioned was we were going to do this same, you know, same time, same place every year, so that people could get accustomed to it. Unfortunately, this little thing called the, I believe it was called the Super Bowl, happened in Vegas
at the same time as when we were doing it. So they kicked us out. And so we moved to April, which is a different time, but it’s also amazing, because you can be outside. The weather’s perfect. So yeah, we’re gonna be in April, kind of here from here on out, for a variety of reasons. But yeah, so it could be April of 25 and then April 26 27 as well. Awesome, awesome, very cool. No, I actually, I think April is fantastic. Little bit warmer weather. It’s a little bit away from the holidays, you know. So I think it’s, I think it’s a great time. I very much enjoyed it.
So I want to talk about a couple of things. If you guys had just sent an email out, and I know you guys have posted about it, but you guys come up with this executive summary of what’s taking place and in, like, in the industry, right? I think you guys call the state of the industry executive summary.
I received that report, and that’s like, what got me to reach out. I said, Oh my gosh, I need to have Alex on. I really want him to go through some of this data that’s on here, because it’s so interesting, especially because, you know, being in this space for so long, and seeing it grow, and seeing the forecast of where you guys seeing it, seeing it go. So first off, how do you guys compile this data? Because guys, when we get into it, we’re going to be talking about revenue per practice, like revenue per provider costs, where we see the industry going, how many practices have open like, what’s the average, you know, the average meeting when it comes to to, you know, practice, and who owns them? Are they owned by individuals, and how much is owned by private equity? Like, this is a really cool report, and so Alex, like, I want to go through it and just kind of highlight some of the, some of the big KPIs that you guys have pulled out here.
Yeah, I’d love to, and what you have in front of you is the, you know, the executive summary we’ve got. I’m not sure if you have the full report or not, but we have a full report that is, that is even longer than that, and it’s kind of a, it’s, it’s, it’s difficult to put together, but we have a third party called Gordian GSG Gordian Solutions Group. They are, they are a data analytics provider, and they do these kinds of things, you know, for a living. So they help build out the survey, they help form the language, they analyze it to make sure that is statistically relevant, and all that kind of stuff. And then it’s just, you know, it’s, it’s a lot of, it’s a lot of hard work we do, ask a lot of kind of in depth questions. And the reason that we came up with this survey is, I’m sure you know, as someone who, you know, who is interested in KPIs and looks at analytics all the time there, is a lot of information out there when it comes to like plastic surgeons, or their reports are always you know how much they’re selling on particular treatments, things like that. What we wanted to do is really get into the business side of the industry, the size of the industry. Who is do?
Doing it, where it’s going, who’s involved in it, a little bit on compliance and kind of how people are running their med spots. But mostly it’s meant to be a financial industry study. And it’s evolved over the over, over the years, because, you know, we’ve gotten some feedback. But it’s fun. I look forward to it every time we do it, it’s, it’s fun to look at. I still, I’m looking at it every day almost, and I still find things that I didn’t notice, even, you know, yesterday. So it’s pretty cool.
So there’s a couple things that that really like hit home for me. Is when I look at the total number of med spas in 2022 2023
right? So, in 2022 we got, you right around 8900 practices, you know. And then in 2023 we got 10,500 so when you look at the growth rate there, even with, you know, one could call it economic contraction, right? That’s currently taking place even from 22 to 23
the the industry is doing extremely healthy. When you look at the average annual medical spa revenue, and 22 was, was 1.3 million. And in 2020 sorry, 2022 is 1.3 million. 2023 1.4 million. And that’s, that’s like the average annual medical spa revenue. I mean, those numbers like most so most of them, most practices, you could say, are seven figure producing practices on an annualized basis, average across the United States. Is that right? Yeah, absolutely. And it’s been, it’s been over a million for for a while now. And I think that’s that is extraordinary, because you’re talking about just kind of the average run of the mill Med Spa is doing, you know, a million plus a year at probably 20 25% margins. And there’s a some that are doing a lot better. It’s the number of med spots, is always interesting, because it’s, it’s been with a slight blip during COVID, which I think was obviously for a lot of industries, had some impact. In 21 there was a bit of a it was, there wasn’t a dip. We still grew, but there was a much slower growth. But since then, it’s been the industry has just been on fire. We’re adding, you know, well, we’ve been adding 1000 or more med spas a year since, you know, 2015
and probably even before then, I think you go back even further than that. So it’s, it’s extraordinary to see the resilience of the industry, the the the continued growth, the continued evolution of it, we’re seeing a lot more and maybe you can, you can comment on this too, because we’re seeing a lot more sophistication from the business side too. People are starting to figure it out, like how to do it, but there’s still a long way to go. There’s still so many people who don’t really track the right things, or know what to track, but, but just for watching the industry mature has been, has been fun to watch. It is, though, I think you know anyone listening who’s looking to get into it, we are still very much at the ground floor. When you look at at what is to come.
Yeah, absolutely. I mean, we’re sitting in, you know, mid 2024 shoot. We’re almost like, as we record this, we’re almost the last couple days of the quarter for or half of the year, the second quarter of 2024, right? And so, I mean, there’s so based on the report, guys, we show 11,432
active medical spas the United States. If you look at that data just two years prior, two years prior, going back to 2022 I mean, you had 8900 practices, right? And then going forward the projection. And I know you guys have these projections, but you have it growing
right around 1000 new practices per year going into 2026. Is kind of where I see the data unfold there. But what’s interesting too is if you go all the way back to 2010
there was 1600 and that was, I mean, like 14 years ago, but in reality, like that is not very long ago. And then you look at 2010 to 2010, to 2020, there was, went from 1600 to 7100
and then it’s doubled again, where we where we are today, basically just south of doubling again. You know, so, so. But talk to me. What does that do in terms of
competition, right? In terms of because you see, like the average income or the average revenue per practice as more practices open people have more options. Do you see that going down in your guys’s projections? Like, because there’s just more options, but there’s also more demand. There’s like, how does the supply and the demand weigh into something like that? Well, it’s, it’s, it’s interesting, because whenever.
Do this study, the the the data scientists that that we use, we always have a bit of back and forth when it comes to projecting out, because this industry is not like other industries in terms of how it’s been growing, because they always we’re always battling a little bit with like you’ll see in our report, we’ve got a little bit of a slowdown. 2627 towards the end of the decade, where it’s it’s plateauing, but they’ve been predicting that for well over a decade, and every time they do it, I kind of say, you know, you know, I understand that probably we’re going to have a slowdown at some point. We can certainly grow this this fast, this long, forever. But
when you talk to folks like Allergan Galderma, some of the injectable companies, who have data from all over the world and certainly all over the United States, what they’ll say is that the market penetration for esthetic medicine is very, very small compared to what the market possibility is. So, you know, the number of people who have actually had an injectable treatment that of those who want it is like 567, percent tops, right? So you’ve got this massive demand out there. So I’m always pushing back and saying, you know, I think it might be, you know, we might be under selling it, but from a statistical standpoint, we kind of have to go with what the data shows. But it wouldn’t surprise me if it was going to be what was going to grow even more then we’ve got, you know, 10% in 25 and 26 I think it could be 15% I think, very, very easily. And to your question, though, competition obviously is something that everyone is dealing with, but
it certainly has not done anything to slow down med spas that open because there’s more than enough for everybody to eat out there, right? It’s the bigger issue that we’re seeing right now, and if, and one of the stats that we found was some of the single location med spas that are kind of by themselves and not part of a chain, are actually making less revenue per year than they were prior, and we think that’s because of the evolution of some of these larger chains that have started gobbling up some of the market share. So competition is definitely having an issue. But the bigger issue that we’re that we’re that we’re looking at, I think, is a lack of providers, and that you can open, you can open your Med Spa, and you and there’s, there’s people there wanting to come in, but there’s, there’s not enough qualified, trained injectors or providers to be able to service that. So anyone who asks me, should they start a med spa? I mean, the answer is, is yes, if you do it carefully, if you plan, if you have the right tools, like with what you deal with, if you, if you’re well enough financed, you can open a med spa virtually anywhere in the country, in any location, and you will be able to make it if you’re careful, and you’re and you’re carefully planning, regardless of competition, regardless of who you’ve got around you there, just there’s that I haven’t seen somebody not be able to make it work yet, unless they’re just careless, right?
Yeah. I mean, you know, there’s an interesting stat that you guys have on here is still in 2023, a single location. You know, I’m just reading it right here, a single location, 2023, monthly average revenue, $92,000
a month. And I mean, that’s, that’s a seven figure business we all know. You know, like you’re for practice owner. It’s a very healthy, marginable business, and it’s predictable, right? Because of, because of repeats, and because of how many like, the patient loyalty. So yeah, if you’re thinking about getting into the space for sure, like, I agree with Alex, I think it’s a wonderful time, especially when you look at the forecast going into 20 620-627-2830,
I’ll take a 10% growth factor, every, every, every day. I’ll take a 15% growth factor. That’s a healthy growth market. I mean, some of the numbers obviously, like, you know, the industry has exploded, but there’s so many more things that we need to look at in terms of, like, what is it going to be from the wellness side, the hormone replacement side, the weight loss side, like, we see a massive push there, at least on our end, from, like, marketing demand. And I know you guys have some stats in here as well, right? But that’s just from a single location. And then another thing that that really stood out to me was repeat patients. Yeah, so 73%
of patients actually repeat. They go back to the practice. My question, do you know how long like, what is the typical patient lifetime value is it? Is it like two years, three years? I have some data on that, but I was curious to know if you guys had a data point on that. Yeah, you know what? Let me, let me look through, because I know we’ve got some of that. We have, we certainly have a lifetime value. Is one thing that we didn’t calculate and that, but that in which is something that we should.
Because I love that, that stat, because that’s really what you have to look at in order to determine, you know, what your marketing spend should be. You know what I would say is that the the repeat customer, 75% which is what we saw, is a is a healthy and significant increase from what we showed back in 2022
and 21 so which it was in the 60s, right? Which is, which, when you think about it, is not great like you want, you want to be higher than that we’ve got. You know, the average spend of a first time patient is 500 some odd dollars, which doesn’t seem like a lot, but when you think about a lot of the things that they’re getting when they first come in. They first come in, skincare, you know, facials, things like that, you start adding that up. It definitely adds up. But I think what the the repeat patient
stat shows is that is that people are getting a little more sophisticated and a little better at being able to to systemize their their business, so that they can actually get repeat patients, because the repeat patient is, that’s really where you’re going to make your money in this industry. It’s where you’re going to it’s how you’re going to be able to scale. It’s how you’re going to be able to grow. There is, there’s absolutely no way you can do that only off of new patients. New patients, number one, have have very you know, have less value overall than than repeat patients, and they’re more expensive because you’ve got to get them, you’ve got to get them to come in. There’s a bunch of hoops they have to jump through. But I will take a look, because I know we have something on, on spend and patient profile.
You know, I think the other thing that I wanted to point out that you had mentioned briefly a second ago was that the although we’ve seen this incredible growth, and we’ve seen a lot of consolidation, like to me, it’s every every med spot owner that I talked to says they’ve been in contact with some private equity group, some platform that’s rolling them right,
and while we’ve seen a lot of that have an impact, interestingly, though, the relative ownership portion of private equity versus single owners is exactly the Same as it’s been for the past, probably, you know, five years, meaning they’re buying and they’re they’re consolidating, but this is still very much a mom and pop industry. It’s an industry dominated by single location, single owners,
not large chains, not private equity and I mean, 90% I think, of all of all med spas are like one or two locations, and that’s it. So, you know what I always tell people when they talk about, you know, how can I, you know, how can I do this? It’s you can do it any damn way you want, right? Because there’s so much opportunity to build your own brand and do your own thing. Lifetime value. So I’m curious, like, what, what’s your take on lifetime value? Have you, have you been able to triangulate what that is? Yeah, I mean, a lot of the stuff that we look at, you know, on the marketing side, as we look at patient acquisition cost, you know, how much does it cost to actually, to acquire a patient? And that can vary depending on what channel that comes through, whether it’s like a pay per click ad, social experience, dark social, word of mouth, referral that can, that can vary, but, you know, like, typically, we see that to be right around anywhere from 80 to $120
is, is a, you know, that’s, that’s, that’s what it costs to basically get one, and that’s just on the spend side. Now, when you factor in, you know, all the components that go into that in terms of making the phone call like staff pricing, that’s probably going to shoot up north of 150 to $175
right? So if that’s what you’re spending, guys to acquire a patient, let’s just make numbers easy, 150 bucks to acquire a patient. Let’s just like that. That’s a pretty decent average you can use the first time spend that am Spa has out here is $527
right? So imagine, you know how much it costs to get that patient now, what they’re spending for the first time now they spent net you also have costs on that, because if they’re getting injectable, it’s like you have marginal costs on that. So what is the net income on that first patient visit? You have to realize that your goal should 100% to be to retain that patient for as long as you possibly can. And that’s going to come down to patient loyalty, patient experience like, how when they found you, do you have the right reviews, the right credibility? How was your before and afters? How’s the booking you know sequences go? What is it like for them to fill out their consent forms. Are you leveraging technology? Are you not? What is the experience when they walk in the door? Are they greeted properly? Is the staff trained properly? You know, like, I’ve seen, some practices do some really unique things in order to greet them properly and make it more of an ambience and a welcoming event. And then, of course, when you’re getting.
Treatment done, you know? I mean, it’s that’s where you should ultimately shine. And then, of course, as you’re leaving that checkout process, connect on social, get the Google review, you know, make sure that you’re rebooking them, getting them on a membership, like letting them know everything that you have. Because that second visit, if you can get them to come back in. And what am Spa has that here is 73% of them come back, right? So if you guys are, if your practice is north of that, you’re obviously above average. I know some practices that have like 88 to 92% repeats and then, and then they come back. They usually stay for about three years. Is kind of what we typically see. But where your margins and where your loyalty just expands. Is second visit, third visit, fourth visit, because what’s going to happen? They start to send you referrals, right? And so it’s hard to compound that patient lifetime value on a compounding threshold, right? So we typically see three years. We see, like an average spend right around three to $5,000 a year. But it’s hard to factor in the referral network, right? So, yeah, so that’s, that’s what’s super, super interesting.
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Yeah, you know, but what’s one thing you mentioned? If, if, if, what you’re saying is, you know, 100 $150
to get a new patient in, even, you know, so the gross margin on that is, you know, if they’re, if they’re, if they’re bringing in 500 plus dollars. You know, that’s that, while it certainly is more expensive, that’s still not terrible, like, you’re still getting, like, still able to get a decent margin off those first time patients. But I think what would be really interesting, and we don’t have this, but I think this is something I just took a note on that that I want to get for next time, or even even before then, is what’s the average spend for repeat patients, right? So once they come back, what are they spending? Because if the gross margin is, say, you know, $400 or whatever it is, 350 for, for a first time patient, I would bet it’s, it’s closer to 400 for up for a repeat patient. And so you’re, you’re talking about, you know, adding 50, $75
every time you bring somebody back, versus spending, you know almost twice that when you’re trying to get a first time patient. So it’s, it’s the there’s no question that that what you’re seeing in your data matches up with what we’re seeing is that you’ve, you’ve, you’ve got to be able to get these first time patients to come back. If you talk to, I had interesting conversation with the folks at at Allergan, they work. Obviously they track a lot of this stuff too. They say that first time, like first time injectables patients, first time Botox patients, usually their retention on that is like 50% meaning, if they just come in, they only get an injectable the chances of getting them to come back are half or less. Whereas, if you add on additional services, right where, if you bring in additional services, whether it’s even if it’s something like skincare, it doesn’t have to be anything more than that, but something additional besides that, it jumps up to 75%
or so that process for getting people in the door. How you schedule them? Are you doing a consultation? All those types of things becomes hugely important.
Yeah, no, absolutely. That would be an interesting number to look at. I would, I would very much bet that the spend on round two is probably 35% and above than the initial spend that they came in. I would love to see that stat, because they’re now comfortable. They’ve seen a result, you know, and they’re, they’re ready to actually go, you know, all in, like, yeah, guys, the best thing about this, and what Alex is saying, is, you’re going to make money. Patient one, right? The money’s there. The margins are a little bit, you know, thinner. The.
The average spend is a little bit lower, and that’s not for all practices, but this is you guys got to think, this is a national, you know, industry average, right? But if, if you solely focus, and I see a lot of practices that are constantly focused on new patients, new patients, new patients, new patients, which is great. That’s important. I totally get that. You got to have people coming in the door. But if you also pivoted your mindset just just slightly and said, You know what, we’re going to also focus, just as hard on new patients is we are on keeping what we have and embracing that patient loyalty and experience. And there is products, there’s tools, there’s training, there’s also shoot go to the amspa conference in 25 you’ll be able to, like, meet everybody that’s there and be able to focus on this. But you know, there’s some practices that I work with very closely and may absolutely nail the patient experience. And the patients are beyond loyal, like beyond loyal, like that. They’ll argue for you. They’ll go to bat for you. So
Okay, a couple more stats here, I want to go over.
So this data report also shows kind of coming to your private equity comment, yeah, I think that
we’ve, we’ve here, you know, I heard the word like so much private equity consolidation, there’s so much that’s, you know, like a lot of spas and practice owners have been hit up to see if they’re interested in in exiting or what does that, you know, look like? But still, the ownership structure you guys show here at 97% are non private equity, with 68% owned by single owner. So even though we’re hearing all this stuff, right, it’s still very much, like you said, it’s only 3% is currently owned by private equity. Now I anticipate that going up, especially, like, going, like, in the next four or five years, and I think you will probably see that our ownership structure go down, but there’s been a lot of private equity noise, but at the real like, the stats show that it’s still very, very small percentage of ownership. Yeah, they’re, I mean, they are.
They’re trying very hard private equity, and these are trying very hard to consolidate. I think we’re seeing a couple things. Number one, the industry is growing much faster than they have the ability to consolidate. I think they have also, and I’ve had some conversations with them, and I’m sure you have as well. I think they’re, they’re finding a bit of a challenge off the top, to really get these, these med spas, consolidated as quickly as they want. Because the reason, and what I think, and this is anecdotal, you know, people, people want to go to somebody that they trust, right? So it’s, it’s, it’s much easier to go to a trusted brand or a person who works at a med spa than it is to go to, you know, it’s like you’re going to go to, you know, whatever, like sport cuts, right? I mean, people have a you want to have a nothing against sport cuts, but you want to have a really personal, trusted relationship with the provider who is injecting things into your face, and you’re making your you’re having a relationship with them. So I, I think that’s got something to do with it. But, you know, the other thing I would add is that
while we’ve got 97% are not owned or non private equity owned, 81% are single location too. So, right? So you’ve got 81%
of all med spas are just one single location. And then of the remainder, 57% of that are only two locations. So you’re really, you know, you know simple math? Well, not so simple math. And I’ll do that. I’m doing math in public, which is dangerous, but you’re talking about like 90% are one or two locations, most owned by one provider, and that’s what makes that’s what makes private equity salivate right now, because they see that, and they see
average monthly revenue, and they see margins going up. They see they see repeat patients going up. They see where the demand starts to lie. And they are really, really excited about this industry for for a good reason. What is interesting though, also, is that, you know, in any market, and I’m learning this as I go, but like, if you look at the dental industry, dermatology, really, there’s like, different there’s different scales and layers and levels to how private equity works. This first tranche really is just kind of the beginning. There’s the big private equity brands are sitting in the background with we’ve got billions and hundreds of billions of dollars. They’re not ready to start buying yet because the brands aren’t big enough. So they’re waiting for that first consolidation to happen, and then they’re going to come in and buy it after that. So it’s really, it’s going to be really exciting to see what happens in the coming years with this, because it’s, it’s, you know, you don’t know, there’s and there’s, there’s good, bad and indifferent on that, right? I mean, what’s the what’s the good, what’s the bad, and what, what we want to make sure that we are doing is that we’re.
We’re, we’re ensuring that, even if it’s private equity or larger institutional investors, that we’re growing in a responsible and safe way. What worries me a little bit is that folks come in and they start just thinking about profit, and they start thinking about cutting costs and making a buck, and that that that makes me worried. We haven’t seen that yet. It’s been, it’s been, it’s been pretty, pretty good and safe, but we’ll see, yeah, yeah, no, absolutely, I totally agree. I mean, there’s, there’s, there’s pros and there’s cons to it, you know, like, anybody that’s going to come in and invest in something is going to want to see a return, right? That’s why they put their dollar out there. They’re going to see a couple back, yeah. And a lot of times, like, you know, you look at some of these institutions, I mean, they’re sharp. They know what they’re doing from a mathematical standpoint, but, yeah, I agree. They got to be cautious in terms of, okay, this is a, this is a relationship business like these patients. Patients are loyal to the brand. They’re loyal to the provider. They’re loyal to the team. They’re loyal to everything that goes on, from when they when they book, to when they, you know, go on site, to when they see them in public. I mean, it’s a small town type, type of environment, and so, yeah, we’ll see. It’ll be interesting. There was another stat that I thought was pretty interesting. I thought that most of providers in practice, solo owners, were in the West, from a from a regional standpoint, when you look at like, when you look at a national level, I was always under the impression that most of the there was more medical spas on the west coast, but when you guys put out this data report, it appears and maybe this had shifted, maybe this is maybe this was bigger on the west coast, but I was showing like when you break it down from a national cohort perspective, 27%
of the ownership is in the West. You got 24% which is the Midwest. I’m sure that’s grown a lot.
And then you got northeast, which is 9% but what was astonishing was the South, which is like, 40% of all those practices are in the south, and that ranges from Texas to Florida going up to the Carolinas.
I thought that was very interesting. Do you have any like, have you seen the data shift over time from the early 2000s to now? Has that changed geographically or well, so it depends a little bit on how you, you know, break out the regions, right? And we’ve always struggled with that a little bit what, what we’ve always seen is that. So we have seen a shift, but mostly the shift is, is because of
a few major states. So Texas is, is really what we’re seeing as far as growth, Texas has been one of the fastest growing states, year over year for several years. But then you’ve also got Florida, right? And Florida is another big state where seen a lot of expansion. But then I think where I’ve been excited in terms of where, where med spas are growing, which states are growing? Is that if you look at states like Virginia, North Carolina, Ohio,
Utah, Nevada, so these are not necessarily the big, big, big states, but they are populated states. The growth in those states has been really, really robust. So it depends on how you look at it. But, you know, California continues to be kind of the, the the hub of all things esthetics, and that includes things like plastic surgery. So a lot of the a lot of the the bigger brands are based out of California. A lot of it starts in California, but
Texas has been year over year just in continues to amaze me at how big that market has gotten and how quickly it’s gotten, and that’s had, you know, that’s that’s good in a lot of ways. It’s had some some, some negative impact as well, because we’ve seen some, some, some negative outcomes, some bad publicity come from some of the med spas in Texas. But, you know, I think more than a regional breakdown, what I’m seeing is that is that there you can do this in you can do this anywhere. Utah and Idaho are two states that aren’t really known for their population right as far as the numbers, but they both are exploding when it comes to numbers of treatments, numbers of med spas. We’ve seen states like North Dakota and Minnesota produce very, very expansive. Met one of the biggest med spas that I’d ever seen was in North Dakota, of all places. So it really, you know, it’s, it’s everywhere in Oklahoma as another place. We’ve had a ton of movement in Oklahoma, which, again, not, you wouldn’t necessarily think of that being a place for robust growth, but it is. And so it’s really anywhere you go and that. So, you know, the South. The other thing that’s interesting is, if you look at the space.
Patient spend differs amongst regions. So even though the what patients are spending is far more out west than it is in the Midwest, which makes a certain amount of sense, because prices generally tend to be higher, but what they’re spending in the Midwest is a lot less, but the growth is, is, is still catching up a little bit. So it’s, it’s, it’s always very, very, very interesting to see kind of how this all shakes out, what we’re like to do next time. So for instance, I’ve got the data here in the Midwest, patient spend is four average patient spend is $409
versus in the West is $650
right? So you’re talking, those of you looking to where you want to open but obviously that what this doesn’t account for is the amount of the expenses that you’re going to spend in a place like California, the ability to be compliant is a lot, is a lot more expensive because the rules are a lot stricter.
But it’s, it’s, there’s so much to dig into for sure. Yeah, no, it’s interesting. I figured it was something like that. I’m sure even in Florida too, the average, the average patient spend, is much higher in Texas. So, I mean, there’s a big state, so Florida has, what, 25 million people, almost like 10% of the entire, entire freaking United States. So, yeah, you’re gonna, you’re gonna see that, and I think that’s what absorbs a lot of that 40% factor in terms of national, like national cohort, you know, demand, in terms of practice, ownership. So the next thing I want to talk about is, and I’m hearing like a ton about this, and we talked about it briefly a minute ago. But
when we talk about, like, wellness, hormone replacement, peptides, the weight loss, regenerative medicine, you know, the sculpture PRF, like
this is, this is an area that practice owners need to really think about. And if you’re just doing injectables and you haven’t really kind of embraced this. I would encourage it, because, you know, you’re able to capture patient loyalty, like double the amount, right? If you have a patient that’s loyal for injectables and laser treatments, and now you help them with their hormones and peptides and weight loss, like talk about giving someone confidence times two, they feel good and look good. I don’t know, like, where else they’re gonna go. So, you know, that’s, that’s what we see, a tremendous amount of growth. And I would say in the next five years, you guys probably see the same thing happening.
Oh, it’s, it’s, it’s huge. It’s the, you know, it’s the
peptides. And in all the kind of, you know, bio, identical hormone IV. One of the things that’s been interesting is that, you we have always seen that most patients are coming in for injectables, right? That tends to be their first time treatment. But it’s also in a large percentage are for esthetic treatments, so whether it’s chemical peels or hydro hydro facials, light microdermabrasions, things like that, but there’s no question that the biggest trend that we see, and someone asked me recently, you know, what’s the trend? And it has to be weight loss and wellness. It’s, it’s, it’s what we are seeing over and over and over again. And what’s interesting is, there’s, there are two very different interests. When you think about wellness, I don’t know if you’ve ever been to like a forum or the anti aging Conference, which is a very big conference, but it’s very, very different than what the you know the esthetic conferences are. And we’re seeing a lot of those types of practices try to bring in esthetics, not as successfully as the esthetic practices are bringing in wellness products. So weight loss. You know, 50% of our of our med spas surveyed offer some type of weight loss service, which is far more than it was even two years ago, right?
That was a, you know, a couple years ago, there was still weight loss, but, but it wasn’t like it is now. And obviously the semaglutide and all that has had a massive impact on that. But hormone replacement is fully 25% of all med spas offer some type of hormone replacement. And as far as IV therapy, we’ve seen a huge increase in that. That’s up to almost 40% of med spas offer offer IV therapy. And that’s interesting, because IV therapy is not one of the larger margin treatments, right? It’s you’re not going to get a ton of of margin off of that, but you can offer it very, very easily in packages and in memberships, and it allows you time to upsell on other things. So I think we’re only going to see this, this continue one thing that I have seen, and not not from a ton of med spots, but there are several that have really taken this whole wellness approach to its fullest.
Where they they are offering things like, you know, they do body fat analysis, they do personal training, they do mental health,
medically supervised weight loss. They wrap all of this kind of in, where you come in and you literally are doing, you know, it’s a functional medicine approach, where you’re not only doing wellness, but you’re doing everything, and they are tracking you. They won’t, they won’t provide you with the semaglutide and some of their medications unless you are following their strict plan, which means you’re doing weight training. So you’re not, you’re not losing you’re not losing muscle mass. And they really take it to another level. And if you buy into that, and if you really, if that becomes your model, we’ve seen some folks just crush it when it comes to to that, because you, you you’re targeting a certain population that wants to be healthy, wants to look good, feel good, head to toe, mind and body. And it really makes a difference.
Yeah, no, absolutely, I completely agree. I mean,
so I’m, you know, I go to practices, I get, I get treatment done on the injectable side, on the laser treatment side, hydro facial side, you know? And then once, I just started educating myself more about hormone replacement therapy peptides, the benefits of them.
You know, I, I was like, You know what, shoot, I’m getting older. I want more energy. I want to think, you know, is, I want to be on my game. And so, you know, like I was introduced to it through, through my provider. And, I mean, talk about, like, game changing, life changing opportunity for both. I mean, the patient is so excited and happy, and that’s got to just make that practice owner feel so great, you know, that they’re able to not only, like, build confidence within the exterior, but also boost confidence on the inside, which, when you compound those together, I mean, it’s amazing. It’s so impactful for the patient. And what I think we’re going to see, Alex, is you’re going to see that that patient lifetime value and that patient second time, third time, fourth time spend more frequent, right? They’ll probably go back, because now there’s two different levels of service, and that price tag is going to go up, and the referral network is going to expand, because of how you change and impact that person’s life?
Yeah, and I think it’s going to depend on, on, on what people, what the med spa owners, want to do. I can see us. I can see us kind of breaking into different segments in this industry, right? Because you’ve got some folks who have kind of doubled down on the injectable side, right? That’s, that’s like, where they make their hay, they, they’re comfortable with it, right? They, if you’re a nurse practitioner or a PA or a physician who comes in from emergency medicine, or wherever it is, and you learn injectable that’s kind of the first thing that you learn. And you first thing you become good at. It becomes very easy to just, to just focus on a practice that does that. The overhead is lower the minute you get into these other things. You’ve got to learn new skills, new specialties. Sometimes you got to bring other folks on, and it makes it more and I can see there being kind of different approaches to this, like, who’s going to do what? How you’re going to do it. According to data we have,
you know, almost 10% of of revenue generated by med spas comes from medical wellness, right? So that’s compared to, when you look at traditional injectables, energy devices, you’re at 60% of all their revenue comes from that. But at the same time, 10% of all revenue comes from more than 10% almost 20% comes from skin. Skincare and skincare related treatments. That’s the other thing that that, that we see whenever I do training, or I talk about, you know, service mix, I always say, like, if you’re making, you know, which our data shows over a million dollars or $100,000 a month, right? Roughly in revenue, and 20% of that is coming from skincare and skincare related treatments, whether it’s aesthetician treatments or the sale of retail and skincare, that’s a that’s a big nut that’s coming in every month, and the margins on that are much, much better, and it allows you, as you know, particularly with women, because women love you know, they are the biggest buyers of skincare, if you can, if you can get them into
a pattern where they’re coming to you for, not only for the weight loss and all that, they’re coming to you for facials, and they’re buying their skincare at your Med Spa, like you have got a you’ve got a really good thing going, because the margins on selling retail and doing esthetician services can be much, much higher if you’re able to get that type of volume.
Yeah, no,
absolutely, it was said. And I mean, you guys also had a.
An awesome data point on here that talks about patient gender. You know, you’re we’re still seeing guys. 89%
of patients across the board are female. And when you break that down from like, an age standpoint, so 18 to 34
is 22% of that,
55 and over is 24% of that. That’s an interesting step 55 so
the older you know, demographic is actually coming in more frequently than than 18 to 34 that’s interesting only by a couple basis points, but the majority of where these, these, the age of age is 35 to 54 it’s about 54% it’s going to be interesting to track this as we go, because we’ve always, always thought that men were going to become a larger percentage of the Med Spa population. It just really, it doesn’t have every year. It’s kind of the same thing with private equity. We think there’s going to be more private equity ownership, and it remains very, very stable right around 10, 11% I do think what’s interesting though, is the number, if you go to because one thing, everything, everyone’s going to do is age, right? So no matter what people are going to age, the number of younger patients is still ticking up ever so slightly every time we do this report. So younger men, the number of younger men that are coming in are increasing. The number of younger if you look at the total number of women who under 40, under 40 who are coming in, you’re at, you know, 50% basically, of your of almost your entire patient population, is under 40. So you’re talking about under 40 women. There still is a very large, robust market for for folks over the age of 40 into their 50s. But that that that younger patient under 40, if you project out 10 years from now, they’re all going to be in their 50s, right? If,
if the if the patient population, as we see it, continues to to to get younger when they start
that is a massive, massive amount of patients that is going to be coming in and is going to continue to need treatments for the next five to 10 years, which is why, worse, you know, we don’t have this data. It’s, it is kind of an estimate, and it’s anecdotal, but we’re projecting, you know, 10,000 20,000 injectors coming into the industry in the next, you know, three years, right? That we’re going to need to be able to service anywhere close to the patient population. And that’s a lot of opportunity for med spas, and a lot of opportunity for growth and expansion, absolutely. And that’s where I’ve seen, like, the the supply of, you know, providers and injectors like that, there’s not enough supply of them to meet the demand, right? So coming back to Alex’s point, like, if you’re thinking about getting into this industry, and you know, like a great resource, go to the conference like embrace on how to run a practice like a business. But also know that the supply of patients out there outweighs, or outweighs exactly what the demands, or the demand of patients out there outweighs of the supply of what we actually have from a provider standpoint. And it’s an interesting stat to look at. So there’s, there’s a lot of opportunity in the space continues to grow. And, you know, only 11% of us are male. Maybe that will that, maybe that will move is, is more men get on like, hormone replacement therapy, and we age and need more energy. Who knows? Wonder what that looks like, broken down by injectables versus, like, the wellness side. But I know that you got to go. I just want to cover one more thing in terms of, like, the types of staff employed, right? Because you can have a medical director, receptionist, Esthetician, nurse practitioner, nurse, practice manager, social media coordinator, patient coordinator, laser tech, marketing director, like, there’s, there’s a lot of different staff titles, one that stood out to me, obviously I want to look at like the the marketing aspect. Marketing Director, that’s that has stayed flat. 22%
from, you know, 2019 to 2023
as stayed flat. So what that, what I show is, you know, and what I’ve seen is practice owners that embrace marketing and really put their, you know, bringing a head of marketing, Director marketing, whether that’s external or internal, you know, see a tremendous amount of growth and be able to offload a lot of stuff. I like to see that percentage point go up a little bit higher. The one that I was I figured would happen was a social media director, manager. That one actually has gone up, because so much of this is through social media showing your expertise.
Showing your you know your personality, showing your before and afters your work and your credibility, yeah, and, you know, one of the things that’s that is tough to get data cuts from, is, is what the overlap is, right? Because there, there may be folks who are serving as marketing directors who are also social media managers, right? So it’s, it’s, it’s tough, and this is something we’ve struggled with continually. With this report is defining it both because you’re, you know, everyone defines things differently, and there’s a lot of new folks coming in who don’t necessarily call it the same thing or so, it’s, it’s, it’s difficult to exactly find, you know, but from a marketing standpoint. I thought one of the more interesting stats dealt with how patients are acquired, and it was really, it goes back to referrals, referrals and and social media is tends to be. And I’m trying to find that Saturday, I can give you the exact here it is, right here so sources of new patients? 42% of all of new patients come from existing patient referrals. But then another, you know, 29 come from Google, and then 18% come from social media. So you’re talking though, and I guarantee all the existing patient referrals go to social media. You’re really talking about, you know, probably a good 80% of your patients are going to be online, looking at your at your social media, at your website, searching for you on Google, looking at your reviews before they even come in. But that existing patient referral still, it still drives people’s practices start to finish. You’ve got to get you’ve got to be able to get people. You’ve got to get them to come back. You’ve got to treat them well. So they give you referrals. And if you can do that, you’re on to
something absolutely, I completely agree. What about the referrals? Like the best thing you can do, and that kind of that comes down to the patient experience, you know, and getting them to come back, right? So, well, hey, I know that. You know, when they have so much time with you. You guys are super busy. I know you guys are preparing for boot camps and shows and all the stuff that you guys do. I mean, thank you guys for so much, for everything you do. If, if somebody wants to get this report,
you know, and just learn more about am spa like, where’s the best place for them to go? Alex, the best places to start is, is on our website, American Med, spa.org, we’ve got kind of all the information. We are very easy to find. Also on on Instagram. We we are going to be in Houston at the end of July, I think, for our events a little, little over a month, depending on this, this, this drops for our next boot camp, so we’ll be there, but yeah, the easiest thing is to find us online or on social.
And we’ve just got a ton of information, and we’re all easy to find and go from there, because there’s everything, all of our information, all of our contact is on there. Awesome. Yeah. So there you guys have it. If you want to learn more about American Med, spa Association, am spa. They’re incredible. They obviously do, like, very cool market research, you know, show this out in the industry. They’re always here to help great conferences and, yeah, I mean this, there’s a lot more than what we covered on this report, guys. There’s probably, like, eight more pages of financial data, trends, what’s working, what’s not working, like, what the average, you know, NP, is getting paid with the like, there’s a lot more on here. So I would encourage you guys, if you’re thinking about getting into the space, if you’re thinking about growing, if you want to make decisions on where to open, if you’re looking to go to different states and have different locations in different states. This would be a really cool report to look at, because it just breaks it down by numbers and everything you need to know. So Alex, thank you so much. There you guys have it. I appreciate your time. If you guys found this, this content and episode valuable, my biggest ask is just please share if there’s somebody in your network that needs to listen to it, and if there’s somebody on your staff or somebody you know that’s getting into the space, please share it. That’s my biggest ask. We just want to give back to the community the best we can and see this stuff get shared and help others. So I’ll leave it at that, guys. Thank you so much. Until next time, happy injecting you.