Three business professionals discuss the impact the impending recession will have on the aesthetics specialty, and how practitioners can optimise their resources to cope
It is no secret that the UK, and indeed the world, is currently going through a period of economic hardship. Political uncertainty, turbulent international relations and the UK’s shifting place in the world market have combined to create an economic crisis that is projected to soon descend into what Bank of England officials are saying could be the longest recession since records began.1
This prospect is daunting to most people, and the aesthetics industry is no exception. Many practitioners may be concerned that their patients will be less willing to continue with a course of aesthetic treatments or regimens when times are tough. Indeed, research conducted by Rare: Group consultancy firm concluded that three in four people out of 3,500 UK adults agree finance is an important factor when preventing them from receiving medical aesthetic treatments.2
Aesthetics spoke to three business gurus who have a positive view on how practitioners can navigate the situation with the correct strategy and mindset. In this article, previous clinic owner and founder of medical aesthetic distributor AestheticSource Lorna Bowes, social media marketing and business trainer Miranda Pearce and director at aesthetic service provider for Plim, Nada Ali Rheda, share how practitioners and clinics can practise efficiently and retain patients during this time.
A recession occurs when a country’s economy declines rather than grows for more than two subsequent quarters; this often happens in conjunction with rising unemployment rates and falling retail sales.3 There can be multiple causes of a recession, but according to Forbes, the primary ones are sudden economic shock (in this case, triggered by Russia’s invasion of Ukraine), excessive national debt (caused by the increased investment required during the COVID-19 pandemic), or too much inflation/deflation (exacerbated by the UK’s unsettled political climate).3
The most recent recession in the UK occurred during Q1 and Q2 of 2020 due to the beginning of the pandemic, but at this moment, many people will be thinking of the Great Recession in 2008.4 From April 2008 to mid-2009, the UK economy shrunk for five subsequent quarters, and it took five years to recover to pre-recession levels.4 The severity of the impending recession in comparison to the 2008 crisis is yet to be seen.
The business experts we have spoken to explain that the recession will have a number of direct effects upon the aesthetics industry, some of which have already emerged. Some distributors and manufacturers have already experienced problems with supply chains of both products and ingredients, which they say have been exacerbated by both Brexit and the Ukraine war. Placing sanctions on Russia due to their invasion of Ukraine has increased the price of imports, meaning many suppliers are increasing their prices.5 Bowes explains that the pricing issue is a difficult one to navigate, but clinics have various options including increasing their own prices to account for this, altering their supply chain to find more affordable alternatives or absorbing costs and losing out on some short-term revenue.
Imports and exports have also been slowed down due to new customs regulations post-Brexit, as since January 2021, all cargo leaving or arriving in the UK from the EU has to undergo a full customs declaration.6 This has caused huge delays because every vehicle takes approximately 15 minutes to register the required paperwork, sometimes leading to queues of up to 20 miles of lorries backing up from ports in Dover.7 Consequently, supplies get stuck, aggravating delays. However, the primary concern for aesthetic practitioners and business owners in the current climate is likely to be whether they can retain their patients or attract new business when so many people will be cutting back on expenses.
Research conducted by Rare: Group found that of 3,500 UK adults, 78% of people considering medical aesthetic treatment in the next 12 months believe the cost of living crisis will impact them,8 and 80% of those considering botulinum toxin and dermal filler treatments in the next 12 months believe the cost of living crisis will impact them.9
The key to coping with a difficult economic climate is to stay composed and think methodically, according to Bowes, who advocates for a solid strategy. “There is massive opportunity out there, it’s just a case of making sure that you are really true to your business plan,” she explains. “Sit down and think it through, making sure you know exactly what your unique selling point (USP) is.”10
Bowes explains that if your USP is a high-end service with bespoke, top quality treatments, feel free to highlight this to attract higher-paying patients. You can even consider a price increase if you feel your patients would be accepting of it, as this could help offset rising supplier costs. Adversely, Bowes advises not to shy away from offering more affordable options, as long as you are appealing to your ideal patient base.
A central aspect of your strategy could be establishing skincare as one of your clinic’s key offerings, as this is an easy way to generate repeat passive income. Bowes has had personal experience of this being a successful approach, saying, “When we went through some tough financial challenges while I had my clinic, skincare was my bread and butter. It was my rock, which everything else was built upon.”
She goes on to say, “I recommend doing an individual plan for each patient to achieve what they’re looking for. You want repeat business from your patients, so if you provide them with a cleanser, a day cream and an eye cream for example, and they see results, you can earn your extra income because there’s a lot of money to be earnt by doing skincare well.” Bowes recalls generating exceptional patient loyalty from this approach, with one patient even staying with her for 20 years and spending more than £70,000 on skincare and in-clinic treatments.
Offering top-quality service and treatments is crucial, but good use of technology is key in order to deliver this successfully. The use of technological automation is something to consider to boost your business efficiency in a financial downturn.
One area in which automation can be effective is through managing your finances. Ali Rheda thinks that patients and practitioners alike will become increasingly interested in incremental payment options whereby patients can pay for treatments and practitioners can pay for new devices through regular increments over an agreed period, rather than all at once. She says, “Buying a laser device can cost anywhere from £40,000-250,000. Usually, clinics buy a machine and then spend a lot to acquire customers to come and use it and that’s how they repay that amount. If you use a financing service to buy it in instalments however, it can help cash flow tremendously because customers are paying for the machine while using it.” Such services include Plim, Karma Finance, Pretty Face Finance and Snowbird Finance.
There are also various technology applications on the market which can help in implementing automation in your clinic’s everyday services and processes. Here are a few examples:
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Technology can also be used to gather information on your patients’ wants and needs, especially through using artificial intelligence (AI) such as data analytics and social media metrics in your analysis. According to Ali Rheda, practitioners are liable to lose money if they invest in expensive devices or treatments without gauging patient demand, which technology can help with. “AI can be used to answer multiple questions about your practice,” she says, explaining, “Always consider: who is your best practitioner? What is your best service in the last six months? What have your customers used the most? You can use this information to ensure you’re only spending money on what your patients respond positively to. If practitioners really tap into the data that they have and consolidate that data, they can better manage their cash.”
When drawing in and retaining patients is a key concern, an informed and consistent approach to marketing is essential.11 This is another area where automation can be employed.12 Ali Rheda explains, “I think using platforms to help reduce customer acquisition costs is a big potential money-saving tool. For instance, instead of paying someone to manage social media, sales strategies and telemarketing, practitioners could actually use a platform to market their products and services. By doing this, you’re centralising the services a little bit, making it cheaper for you to bring in new customers.”
Pearce is a big advocate of using social media to boost your clinic’s presence and engage with both existing and prospective patients, and especially recommends capitalising on the rise of short-form video.13 She says, “When it comes to selling to your patients, you need to think where’s the most bang you’re going to get for your buck? And by buck, I mean your time, because promotion is free these days. The answer is definitely short-form video – Instagram Reels and TikToks. I recently went viral three or four times on TikTok, and it showed me the power of that platform to reach a ridiculous amount of people. I think the reason it’s so powerful is because people want to escape, even just through educational content that allows people to be consumed in that moment.”
She emphasises that this engagement, even if just on Instagram stories, is crucial to keep patients interested. “Through consistent communication, patients are going to quietly build a relationship with you in a way that you don’t even see happening,” she says. For a more hands-on approach, Pearce recommends trying your hand at organising events and showcasing what your clinic offers. She explains, “My partner (Dr Tim Pearce) and I were trying to build a business during the recession in 2008, we hustled hard. We focused on creating hype around events we were running, like demonstration evenings. Lean into ‘what’s in it for me’ and consider why would anyone come to your promotional or educational event? If you really focus on what the patient potentially wants, you can benefit your patients as well as your practice.”
In a time of turbulence such as this one, taking a personal approach to your patients so they feel like they know you before, during and after treatment is invaluable.
Ali Rheda agrees with this concept, saying, “Post-treatment engagement or interaction plays a big role. It’s psychological – it makes patients think that your service was money well-spent because they’ve made a connection.” She highlights that, once again, automation can come in handy here. “One way to achieve this is to have a properly designed automated email message. To emphasise that you’re there for the patient, or to remind them to drink plenty of water post-procedure, for example. This is a small solution that can enhance customer loyalty.”
Bowes states that this is also important when ensuring patients understand the treatments they are considering. “Practitioners need to engage in dialogue with every single patient about the products they use and the clinical evidence behind them to demonstrate that they’re using the best skincare, the best filler, the best device or whatever it is – they’re really going to want to understand the science before they spend their money. Communicate with everybody in the clinic team – front of house, therapists, nurses, doctors – to ensure they know the science behind every treatment you’re providing.”
Actions that don’t take too much energy away from clinic time can still be effective here, as Pearce highlights. “One way to keep in touch with patients is to just reach out to literally say, just thinking of you and I thought I’d reached out and say hi, I hope you well, let me know if I can help you with anything,” she advises, adding, “The majority of people will come back to you because they’ll just be grateful that someone remembered them. I promise you when they’re ready, they’ll come to you because you’ve built that relationship.”
We cannot ignore that there are tough times ahead, but there could be potential positives on the horizon, such as making your clinic more efficient, learning more about what your patients actually want and building a stronger relationship with your patients and team. Despite all of the uncertainty around how the recession will impact the medical aesthetics specialty, Ali Rheda remains hopeful. “Even though there is a recession or there is a downturn in the economy, aesthetics is no longer a thing that people think of as a luxury – it’ sactually something they think is an essential part of feeling good,” she says. “I think that after COVID-19, people have started investing in experiences, and are more willing to spend on things like aesthetic treatments despite financial hardship.”
This idea is often referred to as the lipstick effect - a phenomenon coined by author Juliet Schor in 1997, refering to the concept that in times of recession/economic stress, people (mostly women) are more likely to invest in discretionary purchases in order to boost their mood.14 Research conducted by American psychologists between 1992 and 2011 found that during times of economic hardship and high unemployment, the US census revealed reduced spending on electronics, furniture and leisure/ hobbies, but increased spending on clothing/accessories and cosmetics.15
Bowes believes practitioners should capitalise on this, saying, “Instead of going on the expensive holiday, patients may go on a weekend break, but stick with their brands. I think we’re going to see an increase in brand loyalty, which highlights the importance of trust with your supplier. Is the science genuine? Do patients really see the results? If so, they’re going to have a home-cooked meal instead of a takeaway, but keep hold of their skincare and other aesthetic procedures.”
Pearce seconds the significance of this mindset, adding, “I think that when we think of aesthetics, far too many people think that it entails vanity and indulgence, but I actually see it as the opposite, because it’s about carving out control. By choosing to have a treatment, patients are showing themselves that they can control this one area of their life. I think if we can have that kind of mindset, then we will take the kinds of actions that will allow us to weather the storm.”
She concludes that it’s key for business owners to maintain a positive mental attitude throughout the recession and beyond, sharing that, “At the start of the pandemic in 2020, I felt like I was staring down the barrel of a gun, but a friend told me, you are going to tell a story at the end of this period. Do you want your story to be that you thrived during this period? And in that moment, I just made the decision and we thrived. I think the recession we’re facing right now is much the same.”
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