Physician Branded Skin Care: Put your name where the money is
- Posted on: Mar 12 2014
Physician Branded Skin Care: Put your name where the money is
By Cheryl Whitman
The future of Physician Branded Skin Care lines in aesthetic medical practices is growing not only because savvy owners recognize a burgeoning and lucrative market, but also because they want to offer specialty products that meet the unique needs of men and women seeking cosmetic procedures. These products create loyalty to you and your Brand.
Carrying existing well known lines is profitable to your medical spa business but it is limiting, and your local competition is most likely selling it also. By adding a new profit center the Physician Branded product line offers an even greater return on investment. It isn’t only your profit margin that benefits but just as important the quality and loyalty benefit. Physicians report that their patients express a new level of trust for their knowledge of the industry, which increases their aesthetic treatments as well as home maintenance cosmeceuticals programs. The luxury skincare market is rapidly growing due to the aging population. The never ending battle against the aging face and skin makes for more sales of more products and aesthetic services packaged together.
Market research shows that the annual average revenue of a medspa tops $1.5 million. Of that, the annual gross sales account for up to $120,000, 15% of which is accounted for in retail sales. That’s significant – but it can be even higher if you offer your own Physician Branded Skincare.
According to Transparency Market Research, the global physician dispensed cosmeceuticals market was $560 million in 2011 and this market is projected to reach $1.8 billion by 2018. The market will grow with the compound annual growth rate of 18.15% from 2011 – 2018.
Physician dispensed cosmeceuticals market is categorized into product segments such as skin care and eyelash products. The demand for this market will spur due to factors such as product innovations, rise in surgical procedures, increase in consumer spending and growing number of dispensing physicians.
Clients can actually enhance the treatments they receive in your offices with your Physician Branded product line. They will have the benefit of higher grade, more potent products with a higher percentage of active ingredients than they can find in a drug store or department store. This includes over-the-counter products that are selling for up to $600.(Step up product programs can be created and patients skin can be analyzed on a more regular basis).
Even doing just one “Hero” product can start to make you a skincare authority….and can be a good way to get your feet wet…especially if it is a specialty product(, which can retail for $250 or what your market will pay!
“Branded products get people in the door and what they walkout with is your brand. For example a customer goes to CVS for an Olay product and walks out with a CVS brand product. It’s all about positioning and marketing” explains Ellen Clark, Founder of Global Skincare. “Patients are easy to convert from a famous brand, both serving a same purpose with one not necessarily being better than the other. This simply has to be explained to your client.”
However, you can’t expect a lab who is the product supplier, to come up with a marketing and sales strategy. You must invest in a strategy and a plan to create your Brand. That’s where consultants, like beautiful forever and our creative branding team, can help position and create your brands vision. We also can help create your collateral marketing materials such as product kits, sample packs and more.
Set the Stage
Whether you choose to begin the process of developing a Physician Branded product line on your own or with the assistance of a consultant who specializes in this market, you need to:
• Acquire thorough assessments of the market, competition and demographics
• Develop a business and marketing plan, with financial projections to gauge capital and cash flow needs for labeling (hot stamping or silk screening), packaging, marketing and advertising, and collateral materials, such as brochures
• Complete research, identifying and procuring a physician-grade product line, and naming your products
• Review reports on products currently sold in your practice and used back bar) in your treatment rooms to identify categories that are most popular, as well as the types of products your (patients) are requesting
You will also need to create a timeline to determine how long it will take to move from inception to implementation. Generally, you can expect the process to take minimum of two months. For those opting to create proprietary lines, it can take up to nine months to complete testing, choose packaging, design labels and develop collateral materials.
Recipe for Success
According to case studies, entering the Physician Branded Market aren’t just about profits. Cosmeutical science is taking active ingredients and putting them in a jar sometimes with subtle changes and other times with great success. Physicians and medspa owners are determined to provide products that perform at the highest level and deliver above and beyond the results their patients expect. They report being more than pleased to have found exactly that. Further, they are impressed by the amount of research, testing and regulated studies that go into developing the products they choose for their practices.
However, not all Physician Branded product contenders are equal. It is vital to evaluate the vendors in the market, choosing one that not only meets your needs, but also is regulated. You have three different levels to choose from, depending on your projected volume and budget:
• Basic Private Label companies offer existing lines that allow you to choose from a variety of products that meet your specifications. The manufacturer does not alter the formula, but simply places your name and logo onto the packaging. This is the most affordable option at under $5,000, and can include a (full) line of products (approximately 20 different stock keeping units, or SKUs).
• The custom line allows you to work with a designer to incorporate specific ingredients into the formulation of, or tweak an existing line. In addition, you may further customize your products with designer packaging, which costs approximately $2 and up per jar or bottle. Rates for this option will run from $10,000 and up, depending on the number of products and the packaging minimum required. If you are required to purchase 5,000 jars, keep in mind that they do not need to be filled all at once and can be labeled for different products.
• The proprietary line ensures that you have unique products or ingredients that no other medspa has. You work directly with a chemist and through research and development creating your products from scratch. Because this requires testing– proprietary formulation is the most expensive option but, it’s completely your own concept and brand starting around $20,000, depending on the number of products and the type of testing required. For example, fees can range from $2,500 to $10,000 per product for development and extensive testing.
(NOTE: Co-branding with an established skin care company may be offered to medspas with distinguished aesthetic services and retail success. This category of Physician Branded products would link your name with the company’s on the label of every product in the line.)
You will need to decide upon the number of cosmecutical products you will carry. You may choose to offer one specialty product targeting a specific condition or expand to a full retail line of up to 20 skin and body products. The goals are to protect from UV damage (sunscreen), reduce free radical formation (antioxidants) improve skin lipid barrier (moisturizers), brighten and unify color and tone (bleaching agents and antioxidants), and smooth texture, reduce pore size and decrease fine lines and wrinkles (retinoids and collagen stimulators).
Other options to consider include highly touted ingredients, such as collagen stimulating peptides, growth factors, acids or cutting-edge product delivery systems. Combining of the key active ingredients will be more effective than one ingredient alone.
The teams of designers we work with makes the process easier, which saves time and money and is more seamless (“one voice” project management, ensures that the message is clear and decisive). By taking you through the R&D process and acting as a liaison between you and the labs, chemist or package suppliers, we create a unique experience, which is productive and enjoyable but most importantly, ends with a beautiful branded product or entire skincare line worthy of representing you and your name. Creating a new retail business within your office.
Regardless of the type of product line you choose, the mark-up is entirely up to you, based on your wholesale, development and marketing costs. (For example, your Physician Branded eye cream may cost $15 per item from production line to shelf. If you mark it up to $90 and give a 10% commission to your staff, you still net $66). The mark-up on these products can be 300% or more, depending on what the market will support.
Marketing physician-dispensed products to patients who may be cutting back on more invasive procedures might be the best way to keep them involved with your practice. You may be able to retain your patient base by marketing products. When executed properly, this approach can help you to continue patient conversations about surgery, facial injectables, and laser service portfolios. Remember they can only buy it from your office or website which gives you an opportunity to introduce new products.
Rachelle Akino of Physicians Products Inc. tells us “The patients love our private label products either as part of their in office treatment or as part of a take home regimen.”
Make Physician Branded Skin Care work for you
Create a Sephora like “retail zone” near your reception desk with testers and informative materials. Make your products visually appealing by keeping them clean and fully stocked. Don’t be afraid to turn to an expert to give you the goods on how to display your product in an eye-catching way since half the “sell” is in the “seeing.” Depending on your budget and taste, your display space can be quite elaborate or tastefully simple. Displays should be in every room for patients to start conversations about what they are currently using at home. Every patient should leave with at least one product no matter the reason for their visit.
Train your staff to treat the entire patient using a questionnaire and treatment plan. Your staff should be capable of discussing all of your product lines with patients rather than just focusing on one procedure during an aesthetic patient consultation. Using a questionnaire at check-in can be a valuable way to identify patient needs, especially as they relate to your particular menu of services. A patient questionnaire takes little time to implement and can offer valuable information to use later in discussions with your patients. By training staff to consult with patients through a total treatment plan, you can easily discuss the patient’s short- and long-term aesthetic goals. Implementing an overall protocol allows all staff to discuss a patient’s long term aesthetic needs rather than only focusing on a single patient procedure. Additionally your staff members should have a strong closing statement. Example: “I know that procedure was a large investment. This product will help to keep your skin in great condition and increase the time before your next treatment.” An aesthetician can do skin consults and can sell Skincare programs tied into your laser programs.
In addition, by offering kits or sets of products for specific skin types, such as acneic skin or mature skin, and treatment packages for follow-up care after procedures, such as laser treatment or micro-dermabrasion, your staff need only assess a client’s unique needs to finalize the product grouping. Don’t forget to send them home with samples and brochures. To keep their interested offer social media tips and hints.
“Many brand name products that are sold in a physician’s office are also available directly through the internet” Explains Jim Krulisky of Dermesse Skin Care, “Or, they can be purchased from any other physician carrying the brand resulting in price wars. A private label product is only available at your office. There are no price wars. There is no losing of sales to the internet.”
With products lasting anywhere from 30-60 days, patients will need to purchase products even when they aren’t in your office. But if the patient does come in for a scheduled visit to purchase refills it gives you and your staff the opportunity to promote additional services.
By offering special promotions as a follow-up to certain procedures you can cross-sell patients into additional services. Newsletters, E-mail “blasts” and marketing pieces also can be an inexpensive way to introduce patients to products that may complement their procedure pre- or post-consult. Let them know that you are an innovative practice, with an eye on “what’s new and exciting.”
Investing in your name
As an established specialist, your name has become your brand. An investment in a Physician Branded Skincare Line is a logical extension of your practice’s offerings – and one of the hottest and most obvious revenue sources in the business. Take advantage of technology today and video your product training for staff to have training and a sales library on hand.
According to the American Academy of Dermatology, at-home skin care products – including Physician Branded Product Lines – are responsible for up to a billion dollars in sales per year. You are in the perfect position to take advantage of the benefits this industry has to offer, which includes increased revenue and a stronger relationship of trust with your patients.
The bottom line is that most clients are more than willing to spend their skin care money where they get the rest of their cosmetic services. A Physician Branded product line and a well-trained, well-informed staff that are proficient in selling it can add 30 to 40% to your total revenues. So, what are you waiting for?