This is Medical Millionaire, the podcast helping your metspot increase in status, visibility, and profitability. Join your host as he dispels mis 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 ninety nine, Cameron Hemphill.
Hey, what's up everybody. Cameron Hemppill 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 for practice owners. So, if you own a practice medical stus practice, or you are thinking about getting in the industry or this specialty, this podcast and all these episodes we make, they're one hundred percent designed for you and to help you take
your practice to the next level. Guys, I have a good friend today. We've known each other for a few years. We've been on panels together. I feel like I run into this guy like every conference I go to. He's deep in the weeds of what's going on in the world of aesthetics. He owns a group called the Skyte Group out of Dallas. His name is Ben Hernandez, he is very well, let's just call it in the tune of what's happening in the private equity side of things,
the buy side of things, the consulting side of things. Ben, I don't know how many practices that you have touched and consulted at this point and transacted. But man, it's so good to have you back on the show. Welcome to the podcast, Cameron.
Thank you so much for having me back. And yeah, we were just talking. It's been about a year, so happy to be back. Appreciate it. And yeah, definitely enjoy seeing you at all the conferences and learning from you as well every time I go there.
Absolutely, Man, I appreciate it. I just saw you recently at GAC in Miami. Shoot before that was like a weekend before when let's see we were at face at Live Gretchen's conference, and then before that it was a symposium that Scott Callahan puts on. So I've seen you a lot. I know that we live across the country from one another, but it's nice to have you back. So just for the audience, can you just give us a quick update. What is Skytel Group? What is it
that you guys do over there? And then you know, you guys. He has a report that they came out with with a company called q Sites and it's an incredible report that we will get into. And that's really the purpose of this episode. It's like what's going on in the world of aesthetics. But before we go there, ben just for the audience, like, give us a recap,
background history update. I know that a lot of people that are tuning in know whose Skytel Group is and who you are and what you do, but there's definitely some people that do not, so we just give us a quick update.
Of course, yeah for those of us who don't know Skytail.
We do three things. On one hand, we do management.
Consulting where we take to true strategy and we typically work with one of two type of clients. One or typically found our own businesses that either have large practices or multi site organizations that are wanting to grow in scale. The other one is financial sponsors such as private equity. We help at times with their portfolio companies to deal with very specific opportunities that they're seeing or issues that they're having. The second side of the businesses investment banking.
Most of our business there is we take companies typically founder owned and we sell them to either private equity or the platforms the strategics, and then finally we have a smaller private capital side where we invest in either our clients or the spaces in which we play. And yeah, as you said, Cam, we were very excited to put out a white paper because, as you know, there have been so many new entrants into the space and one thing that we consistently saw is just a thirst for data.
And I know you have a lot of it as well, and we talk about it a lot. So this will be a lot of fun.
Yeah, absolutely, And the last channel of that to the business that you guys are now working in. That's the new A side, right it is.
It was propped up in March of twenty four, so, you know, eight months ago or so. And we did it because some of our early consulting clients would ask, you know, would you ever take the risk alongside us? So with the advice that you're giving, and you know, back then we had like one or two acorns on our balance sheets, so there was zero capital to deploy. But that's what got the wheels turning. So it's been a really exciting piece of the business.
I love it. I love it. I think it's definitely needed. And just to kind of break this down for you guys. So the consulting side, and Ben, you can, you can stop me anywhere, but what I want to do is explain it in more of an understanding approach for the audience.
So the consulting side of the business the way I understand it is a practice will come to you guys and say, you know what, I am interested in potentially exiting my practice, whether that's soon later, how can you put me in position to trade at the highest value. And then of course I'm sure you guys have expertise internally that can help guide them along that journey. Is that is that right?
That's correct?
And you know we're generally agnostic oftentimes that is why folks come in, which is, you know, show me how to turn my b's into a's and my season to v's, if you will.
But we're agnostic.
You know, someone could come to us and say I want to give my organization out to my child down the road. We take a similar approach, which is really solving for any opportunities to make the business more valuable, whether it's to yourself or to the potential partner or buyer, whichever it may be. We take a pretty similar approach.
I like it, and I mean basically what I hear from that is, hey, we'll take your current infrastructure, see where you are at on a grade, whatever that grade is, and we're going to fine tune it to increase that grade, right, which ultimately is going to make the practice run more efficiently, effectively, make it more profitable, more attractive for whoever you're going to hand it to sell it to whenever. That may be pretty cool exercise. And then you know what's interesting, guys,
is coming out of that it makes total sense. I'm sure a ton of practices were like, hey, can you also help deploy some capital to put us in position to grow based upon whatever area that makes sense to deploy capital. And so i'd assume you guys would go through some sort of underwriting diligence process and at some point I'm sure it's made sense to participate and partner, which I think is amazing. And I'm sure that you know these practice owners are super thankful for having the opportunity.
Yeah, and that one is a really mutually beneficial one. I mean, as you said, we we do the diligence side of things, which we typically do anyhow as we're running consulting, but you know, from a diligence perspective, make sure that it's an investment that we think we'll get
a good return for our limited partners. And then the beauty of it is then we become true partners and we work together on you know, maximizing that practice as efficiency and hopefully down the road if they're ever ready to go to market, getting a nice return on that. So it's a really fun process and it brings you really close to your partners as well.
That's amazing. I like it. It's going to be interesting to see. I know that it's you know, March. I'm sure that's moved super fast from you know, we're recording this in November twenty four. From March to twenty four to November twenty four, I mean, not not a huge time, but it'll be interesting to see, like in the next
twenty four months what happens there. So dude, let's definitely stay in touch and remember these conversations so we can you know, go back on them and listen and then see where things are in the future.
I would love that.
Yeah, hopefully by then cam where we're raising fun too, and we can look back on.
Some success here on our first one.
You'll be looking back and saying, hey, do you guys remember fun one a long time ago? All right, so let's get into the meet. So this q site First off? Who is q site?
Q site is a guidepoint company with which is basically a large firm that is very, very data driven, so they have all the data that you would ever want within various sub sectors, and q site is the metasthetic
side of it. And you know, we, I think it was July of twenty three, we sat down for lunch and had this idea of wouldn't it be great to put out a really extensive white paper because all of us, as you know, are getting calls from financial sponsors as well as practice owners themselves wondering, you know, what is the true data out there? And there wasn't a lot out there at the time. I mean, you could get things from different places, don't get me wrong, but we
wanted to come out with something really comprehensive. And the thought was q site, you have all this amazing data, Skytail has the industry knowledge, you know, kind of boots on the ground that can translate that data, ideally into English, and that's where we had the thought and we've spent you know, the past half year so really trying to refine it as best we could.
I'm glad you guys did it, and you know, I know that amspot came out with a recent report. I'm glad you guys did just a quick insight for the audience. I don't talk about growth and nine a ton on the podcast, but we have. We're releasing a benchmark report that we will be pushing out there. I think that's actually going to come out maybe in the next thirty days,
something that we've been working on as well. To your point, man, it's like the industry is craving data and it's interesting that you know, you guys have obviously that's been in your ear and you guys took initiative and pushed that out right. So we're going to go through this report together. And I've spent the time digesting it obviously, I know that you've probably been through it a lot as well, probably more than you'd like, but I appreciate you taking
the time because it's it's extremely valuable, guys. So we're going to get into the mean of this. I think that if you're turning in, you know, make sure to pay attention because there is some interesting stuff that has happened in the aesthetic space. Right, So, what are patients spending? How many practices are opening? Like really, like what are what is the industry spending their money on when it
comes to services and treatments? Like to the dollar amount from q site and skytell that put out this report, right, like, there's a lot like what is happening in weight loss? What is happening in private equity? Because I know that there's a lot of talk about it, but now we have some really cool meat and data behind it. So
that being said, let's let's talk about it. There's there's a couple interesting points that I wanted to point out here, Ben, And the first one was non surgical patient spend that that I saw on the report was estimated to be right around fifteen billion in twenty twenty three, and that's up four percent from the previous year, right, which which is it just shows that like, oh my gosh, like it continues to grow, Like four percent of fifteen billion is a lot of cash. So talk to us a
little bit about that. I mean, because I know that you guys have been at this, like you know, for years, and as you can, you continue to see demand from the consumer side outpaced supply.
Correct.
Yeah, you know, this stat was interesting to us for a few reasons. One, I think there's a chart in there where if you look at twenty seventeen and you go to twenty twenty four, this market has doubled in size in that amount of time. So, I mean, that's phenomenal. In twenty seventeen, I see have this up period seven point four billion, twenty three, fifteen billion, and that short time for an entire market to double is just phenomenal and just speaks to the growth.
I think.
The other thing is, you know, we oftentimes see reports that point to the KAGER, which is basically just compounded annual growth rate of closer to ten to twelve percent over the next decade. So the four percent, while not great compared to that number, it's actually very positive from our perspective because if you think about what twenty three was high inflationary environment, we were just coming out of, or in the middle of, potentially a mini recession. You know,
we knew we had the presidential election coming up. These are all things that, from a consumer confidence perspective, make people nervous. So for it to still grow four percent is tremendous. I know, you and I talk sometimes about other healthcare sub sectors, like in Dentnel it grows three three and a half percent a year, and that's a good year. So if you put that into perspective, you're exactly right.
Cam.
It just really speaks to the dynamic space that we're in right now.
Yeah, I agree, And that's that's why I wanted to call that one out because to your point, like, yeah, Dentell, you know it's it's like three percent good year, you know, but four percent in a very let's call it an very interesting world in dynamic you know, to see it grow at that pace is amazing. And really like from twenty seventeen to twenty twenty three doubling you know, seven point four billion to fifteen billion in that short period
is I mean, that's just a different world. In fact, I got into the industry late twenty sixteen, so oh wow, I like saw that just continuous surge, which has been crazy. I mean, so many practices have opened up, I've met so many incredible people. And you know, unfortunately I've seen practices close too, right, Like that's that's a real thing too.
Yeah, a lot of competition out there. I know you mentioned earlier on the new men's spas that opened in twenty three and that number was I think seventeen percent. And and you can dissect a lot from that figure.
I mean, when you have seventeen percent new med spas, if you think about what that points to CAM, it's exactly what you said. You see some that are failing. It's increased competition. It also, you know, we have a provider shortage. There's more demand for services than we have providers, and so you actually have providers that are leaving existing practices to open up new med spas. And that was a big reason for that four percent growth that you're mentioning.
So there's a lot to dissect there. You're exactly right, Yeah.
I mean, seventeen percent growth last year in new medical SETUS practices, that's it. That's an outstanding number, especially in like given the type of environment that we're going through. Dui, it's bananas. I mean, it's it's incredible. I don't know what it's going to be for twenty twenty four. I mean, we're consistently getting hit up by practices that are still opening.
I don't know if you have any forecasts on what twenty four looks like, but I know that AMSPA was projected to see like a ten to twelve percent growth rate. I'm not sure if you guys have saw the same thing.
Yeah, we're expecting something similar as well this coming year, and I think Q one and two of twenty four we were continuing to see that uptick. And you know, that's both great, but it also presents challenges to existing practices. Like from a growth perspective, the new practices were the ones that really helped fuel that four percent overall market growth you mentioned, and above a certain revenue level, what we saw in twenty three v. Twenty two is actually
declining revenues for the larger practices. So, you know, it's kind of a mixed bag, but it's certainly something that you know, if I'm an existing practice owner, I start thinking, Okay, how do I protect myself against this?
You know, is that you know, marketing obviously is a big one.
Making sure that I have really good training, making sure that my patients trust my brand, not a specific provider as much as you can anyway. But there are a lot of things I think that you can take action on with this data of you know, how do I retain my providers as well? So yeah, some pretty neat things I think that you can do with it.
Yeah, retaining your providers is key, you know, Like I've seen lots of practices where providers will will jump, they'll want to go open up their own their own practice, or just go to another environment. Maybe it's a compensation thing, a personality thing. I'm not sure, you know, that's like, retaining providers is like more important than, like, if you look at the data, more important than retaining your patients.
Not saying that retaining your patients isn't important, right, but they are very important to keep in revenue and growth
and market share you want it to be. One of the interesting things too that we were seeing, and this kind of goes with the report, was the marketing, right, So as competition goes up, as you see this seventeen percent growth and we're projecting to see it, you know, let's just call it, let's call it ten to thirteen to fourteen percent growth in twenty four for example, and I think twenty four could actually is even more of an interesting year than twenty three, given the fact that
this is the election year and agree a lot of uncertainty that that was taking place, and in fact, for our business, we saw like like demand from online search drop like install pretty significantly mid October, like November tenth, and then it went back up.
Oh yeah, I think waiting for the election to be over.
And then you know where we are bullish is, you know, from an inflation perspective, the fifty bit rate cut should help with consumer confidence.
Hopefully we're seeing that in twenty five.
But I agree with you, I think twenty four is going to look like a wonky mixed bag.
But you know, Q four I.
Think will be pretty positive from a number's perspective, and then heading into twenty five, that could be an exciting year.
I think I'm bullish on twenty five. You know, I'm bullish obviously in this industry and it being so so strong when it comes to recession. You know, there's some interesting data in the report that I'll call out there, but you know, just like really the patient loyalty speaks
volume of wanting to get services and treatments done. By providers, you know, at their practices and they they want to invest in confidence, they want to invest in feeling good and looking good, and you know, we'll get into that. But in fact, it was there was somewhere in the report. I'll need to go in and find it, but it was talking about the recession, like how households are wanting to invest more in getting treatments done than purchasing household items.
Yeah, it's fascinating and there have been a few reports out on this that for whatever reason, medical aesthetics is very recession resistant and that's a beautiful thing for our space. And once people get in it, they don't typically stop services.
It's actually very rare.
Even as consumer confidence goes down, it's one of the services that people will cut last. And there have been a few questions as to why it's a non essential service. And one of the psychological reasons, according to a few reports anyway, is due to when you don't feel very good about the environment you're in, investing in oneself is actually something that psychologically people tend to do, whether it's you know, working out or reading a lot or metaesthetics.
In this case, that's something that people will invest in But yeah, you're exactly right.
I think that's a fascinating statistic.
I can't remember where it was in the report. I'm trying to find it now, Ben, but I was reading on it earlier. I think it's like in the first few pages twenty seven, I think is it page twenty seven. Let's go to go the really quick Okay, scrolls pretty quickly.
It says here, studies have shown patients would prioritize treatment before household expenses if they have treatment. Yeah, so it's one of those things like Exerto expensive, won't buy that, but I'll continue to get my neurotoxins.
You know what's interesting is that's what my gut told me too, Like just been talking to with my wife and her friends, like, you know, like she's the ideal candidate. She's the ideal patient for a practice owner that's going to continue to.
Go and can.
I'm just like, okay, like I can see why. You know, let's not call it full recession proof. Like I know that patients like they slow down, maybe they skip a visit or whatever. But I mean to back this up with data and look at it and say, okay, cool, Like yeah, maybe we could slow down on our grocery bill because I still have to go get treatments and services done.
It's fascinating.
Once you start, it's proven that it's pretty difficult to stop. I mean, it works, people see the results, and unlike other healthcare, it's one of the few that people go in excited to actually go and they leave happy and it's a good experience. So yeah, it's a fascinating statistic.
I agree.
Yeah, And that's a good point.
You know.
It's like I hate going to the doctor hospitals. Doctors don't like to do it. I think that's pretty common
for most men. I'm a patient. I go to medical aesthetics practices and I have a great time and I leave there feeling great, and so I can speak to that too, you know, and there it is backed up by data, like I think, like when you compound that too with the weight loss, like you know, feeling good and then looking good inside outside type like two way punch, it's hard to hard to miss, you know, really going to one of your services and treatment appointments.
Yeah, and weight loss was another interesting one, wasn't it. Like The category grew to one point two billion and twenty three, which I think it was zero point three billion and twenty two and it was I think the stat was like two hundred and thirty six percent increase, right, So it's phenomenal. So already you're baselining benchmarking against that. And what we did is we refreshed Q one and Q two as well, CAM and I think it grew like eighty five percent Q one, Q two twenty four v.
Twenty three, So like it just continues to grow. So if you think about what that does, there's a stat in here as well. I think that a lot of these patients too, if you talk about expanding a market, a lot of these patients that come in from weight loss were not originally medical esthetic patients. So what you're doing is you're getting a brand new patient based brand
new demographic. And there's another sat in here, I think, and I forget what the exact number is, but of those that come in that we're not a lot of them end up adopting broader medical esthetic services. So you think what weight loss has done, it's been quite fascinating. It's opened up the market, it's added another ancillary services under the medical esthetics arm and the growth is just phenomenal.
It's exploded. It's exploded. Now, I agree. I think that's that's a really good point. I think, you know, like this whole talk of semi glue tie GLP one, like you see the ads everywhere, hymns like I mean shoots, it's all over and you know what, like it works and people are getting benefits and results and so you
know you've seen the surge. Now they go into a facility, they go into a practice and if that provider is doing what they're supposed to do, educating that patient on all the other treatment services benefits that they can do on the surface of the skin, right Like, It's just it's opening up the world for education to learn more about the benefits of aesthetics, which is interesting. So that makes total sense to me.
Yeah, that's a great point on the education piece. I know a lot of our.
Clients bring that up of how do you do that without feeling salesy, And to me, it's all about treatment planning, right Like it would be as well.
Cam, I think you like to work out a lot.
It'd be as if you were my trainer and I'm like, I only want you to work on my biceps. I think your responsibility to me would be to say, that's great, we'll do that as well. But here, here are the other things from a totality perspective, and it really does allow you to Okay, great, now that you're doing this, it opens the door for things like, you know, because you've heard nozempic face.
Or butt or whatever.
It allows you to talk about, okay, maybe dermal fillers, biostimulators, some of these other things. And by the way, as people start looking better, they start feeling better, they see the results, that's a perfect time for them to invest more money into other services that ultimately they probably want.
If you're treatment planning.
Totally, you know, and I think like there is like even though that demand is outpacing supply when it comes to customer again, guys, customer demand based upon provider count, it's out pacing now, and I truly think that the consumer is This would be an interesting data point. I don't know if it's in this report or not, but it'll come out eventually. Like what of the total US population based upon like let's call it men female from the age of don't know, I guess I can go
to like twenty to sixty five. If you want big range. But out of that cohort, I think like there's probably a big chunk in that category that think a MEDSPA is just botox. Yes, I mean, you know, like obviously not for you and I because we're in it every single day. And it's like, man, like, how do you to understand that? But go talk to your you know, like people that are that don't work in the industry.
It's it's astonishing to hear. So you know, you're going to continue to see this grow, and it has to grow through education, Like to your point, Yeah, I mean, if you're going to hire a personal trainer and you're just going to focus on biceps, like you know, it's that trainer's job and responsibility to educate, so you know, you don't have to be sales and b people like to buy information exactly.
You're the expert. I want you to tell me.
It'd be as if I went to and said, hey, Cam, I want to do two videos a week for Instagram or something along those lines, and I would hope that you would say, great, we can do that, but how about this for an overall marketing approach?
And you're the expert, and I would actually appreciate.
That yeah, totally, you're like guy me right. People want to buy expertise. They want to buy expertise, you know, And so I think like, especially as an educator and provider and academic, like, man, these these people are well
equipped to give information, oh yes, and help. Like so if you guys are tuning in now and you're you know you, I would include that in your consults, your treatment, planning, your journey, like just continuously educate your patients, and then those patients are going to go tell their friends their colleagues.
Like information spreads, right, And so you've really seen that through weight loss lately there was a I mean here to what you're saying, like, yeah, it was a two hundred and thirty six percent increase in GLP ones like weight loss semi glue tide from twenty twenty two to
twenty three. That's that's huge, right, like one point two billion to spend, and I think you said in the stat here it was eight hundred and eighty million in total revenue Q one Q two, which was an eighty five percent increase in the same time period from twenty twenty three to twenty twenty four. Yeah, that's what that's that's the call out right there in the data.
Yeah, I mean, that's amazing.
And I think there was a number in there that monthly weight loss spent went from fourteen million to one hundred and thirty six million.
I mean, it's just the growth is just unbelievable.
Yeah, right there. Yeah, So on page twenty three, from twenty one to twenty four, Yeah, monthly spent fourteen million to one hundred and thirty six million. That's three years.
Isn't that amazing? Yeah?
I mean, and then in that the beauty of medical aesthetics as well as this is something that wasn't on anyone's radar. In twenty two we talked about the chart that we doubled in size from seventeen to twenty three, and and these are some examples as to why is the science gets better as the technology continues to improve. There are services that cam we might be talking about
next year that aren't on our radar. And I think that's the beauty of this space is all of these ancillary things that are now being absorbed within medical aesthetics and then at large from a global perspective, certainly in the United States, the focus on overall wellness a lot of it, which kind of falls under our umbrella.
It's just such a perfect time to be in this space.
I mean, if you know, I wish I owned medical aesthetics practice sometimes because talk about great timing, right, It's not often that you come in on the first or second floor of an industry.
Yeah, No, absolutely, I totally I wish I owned like four or five. I've had opportunities to invest in them, like years ago. Un just unique opportunities just be being in the industry just like you. Yeah, and I've passed. There has been times where you know, we were going to open one up and have to get it, you know, because I shoot, you don't want me touching your face, your body. I am not qualified for that at all.
But I am a business guy, and I could definitely find a location and know how to market the crap out of the it and know the numbers and know how to run a console and know how to get the provider and get to get the right people in place to do it. I think I've just been too busy.
Running your company.
I mean, you know we kind of heep that. I mean from you know, that growth phase, you know, from twenty sixteen all the way up to to you know, the numbers that we had last year. It's just it's's time.
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Back to the show. But I hear you, man, it's still very very interesting to me, and I think that even though you've seen this incredible growth over the past, you know years, it's there's going to be a new exciting thing that's going to come out. And that's the beauty of it is. You know, twenty two I wasn't talking about we lost at all. Maybe some practices were doing that, but now it's like the talk of the town.
Agree.
Yeah, And you know, as we mentioned earlier, brings in a new demographic of patient that starts adopting other core mets VAH non invasive services, which is exciting. And you know, as you said, new things continue to come out that aren't on the radar, and you know, like I see the page you're on, Like dermal fillers is a perfect example.
In twenty three it actually shrunk i think seven percent from as compared to twenty two, and you wonder why, right, it's like, well that doesn't make sense because we're talking about weight loss and zempig face or whatever. People were saying, Well, it's because of biostimulator. There's more natural longer. So it's really fascinating that the type of service remains, but as the science technology changes, it's it's just a different kind of adoption.
Now, with that said, on.
Fillers, we did see enough tick in Q one twenty four, so you know, we're starting to see that creep back up. But that was an interesting one that we saw when you looked at the different segmentation of services.
Everything else rude, everything else grew Durmer phillers. It shrunk slightly, right, nothing dramatic, still up from twenty twenty one and twenty one it was three point one billion in total cells. And this is derma fillers. And you know twenty two went up to three point four and twenty three down to three point two. But you're right, it's the only
data point on this entire graph that did shrink. Now, look at weight loss, like that's like crazy, It's like, I mean, I know that we've we've talked about it, but you can just see those charts. It's just it's just bananas. That's like just massive growth. And so if it continues that run rate, just on weight loss for a second, at eight what was it eight hundred million in Q one, Q two for this year, if it continues to run rate, that'd probably be at what one six one seven.
Maybe that's right.
Yeah, so you're going to see another big pop in terms of weight loss for the overall year.
If that run rate continues, which there was one two in twenty three, just like for comparison on what you just did.
Isn't that amazing?
Yeah? All year, all year long, which is which is wild. So yeah, let's look at this report in more detail. You know, I think, in fact, there was another graph before I get into that. Okay, it was this one right here. Let's see, so this is page ten. This graph is really interesting. Now this this graph will get into you guys. It's US aesthetic sales share by segment in twenty twenty three. So this is like broken down by the entire segment. So Ben, will you walk us through this really quick?
Sure? Yeah, and you know this didn't really surprise us.
You know, I'll start by stating that, you know, we talked to a lot of practice owners obviously investors as well,
and generally speaking, we like a practice. Right, if I had a Magic wand that's maybe fifty to sixty percent injectibles, you know, maybe twenty percent or so energy based, maybe ten percent skincare, and then you know, you round it out by some of these things we're talking about, like weight loss, and what we're seeing here is it kind of broke down that way Interestingly enough, thirty two percent of sales were neurotoxin. I don't think that surprised anyone.
Twenty one percent dermal fillers, so that's you know, right in line with that fifty to sixty percent, and then twenty one percent energy based devices. Now, one thing that's interesting is weight loss was right behind that now at eight percent. So for that to be number four in that short of a time we thought was really interesting. You know, skincare was seven percent. I think that's you know, an opportunity for a lot of practices we suggest that to maybe be a little bit higher if it can be.
It just has really nice margins. But yeah, I think overall it was really interesting, but fortunately not.
Overly surprising as to what we would have hoped for.
Well, and what's interesting too, I think neurotoxins carry the least.
Margin, right, Yeah, Like that's a good point. I'm glad you mentioned that. Like neurotoxin's the plus and minus, right, Like the cogs, the cost of goods sold on those or thirty five forty percent often times, so that's the negative if you want to look at it that way, Like if I inject the dollar thirty five forty cents or flying out the door.
So and I haven't even paid my people or paid my rent yet. Now.
The beauty of it, though, is that I know that CAM is going to come back according to this report in ninety one days average, which is kind of interesting. I know Cam's going to come back in ninety one days for that. So that's the repeat revenue perspective that
makes this industry so attractive. And then if you balance it out by some of these other things CAM, that's where we get to that ideal like total cogs of maybe twenty twenty five percent, because like Energy Base skincare, Professional grade skincare, those are lower cost of goods sold. That kind of start from an overall portfolio perspective. You can get the cost of gets sold there. But yeah, that's a really good point. Neurotoxins have a high cost of get sold percentage on those.
Yeah, and it's it's the highest thing sol. I mean, it's it's predictable, right, I think I can get volume discounts. But the nice thing about it as you get repeat patients and then you get the another opportunity to educate your patient on all the other procedures and benefits that your practice carriers, which which is huge.
Yeah, you brought treatment planning up earlier.
That's a perfect example of of why you should. You know, you compare a practice with the makeup we're talking about, like this makeup that you're showing as opposed to one hundred percent inductibles practice, you know, very easy to see which one's going to be more profitable totally.
And the energy based device is like that that actually it's it's the same as Germa fillers. German fillers was twenty one percent. Energy based devices was the same. And I mean I know that the the profit margins on energy based devices are much higher than fillers. Oh yeah, much higher, much higher.
So I mean.
Yeah, I mean I was at a recent event and we were talking about there's a specific device we're talking about to operate the machine. It was a micro needleing device. I won't I won't say that the name or brand, but it to run it, it was cost about one hundred bucks to run the device, and the average practice was selling it was like a package type opportunities, but basically fifteen hundred, eighteen hundred dollars a treatment. Yeah, I mean that's a very profitable machine.
Yeah, what is that seven eight percent cogs? I mean that's unbelievable.
That's like SaaS business dude, that really is I'm like, well, why not just open up a practice and just do micro need link.
I almost said that just that, Oh it's.
Crazy, just focus on that, Like, man, I know what would happen though, Like I totally get that you have to have other services and categories. But you know, if you look like Scott Callahan, like he knows threads like to it, that guy gets it under. That's like that's his area of expertise. Yeah. Yeah, he's unbelievable at it, and that's like what he's honed in on. But like, I haven't talked to a practice. It's just like, hey,
we only do you know, like microdating. It seems like and this is Carrie's positives and negatives and I and I get having a broad based service menu, but I do think some of the practices and practice owners just want to carry everything as well and not specialize. Yeah, because the practice down the street has the same stuff and you know, like just a call out there, I think it's important to specialize as well.
That's such a good point.
I mean It reminds me of like Steve Jobs, right, one of the first things that he did when he was rehired at Apple is he basically got rid of most of the products and focused on like two or three. And if you're the best at something and you have that level of focus, yeah, usually what you see is a very focused entrepreneur that knows their lane and therefore is able to completely succeed in it versus someone that's, you know.
That mediocre at everything. Completely agree.
I think having a true focus knowing your patient base is such an important piece to running an organization.
That's a great point, totally, totally. And I was running I have this really cool AI tool that kind of breaks down, like I've ran it in various different ways, but essentially you could you could say, Okay, I'm going to buy this device. Let's say this cost is one hundred and fifty K. Some are more somewhere less, but I put it at that, and then I said, Okay, how many treatments do I have to do in order to pay off this device in one year, two years,
three years, four years, like ten years. I think I put up to ten years. And then how many patients do I have to have, and I put in like the percentage of what it would cost to finance it, like the patient acquisition costs like in it is mind blowing really, Like when you go from just doing like this specific microneedling device, if you were just doing let's call it, I think it was like five treatments a month versus like twenty, which is not that's only fifteen treatments,
That's that's nothing crazy. Some of these practice owners I'm talking to are doing like fifteen a day, so it's uh, it basically cuts down the you can pay off this device. I think it was like, you know, cuts the time off by like eighty percent or something like that. And then when you have it all paid off and you have like you know, no interest on it, your margins
go out further. And so it's just really interesting to kind of play with the numbers on how many patients do I have to service to pay this device off, what's the cost, and what does that look like? Is very interesting. I think every laser rep should actually be using it.
That's a fascinating exercise. I'd love to see that. That's that's pretty neat.
Yeah, I'm like, dude, if I was selling lasers, Like this would be my number one tool that I would use to be talking to providers about.
Well, you might be getting a lot of calls from laser text.
Out yeah, oh yeah, okay dude. So the other interesting point this was interesting to me on this report, something I wasn't aware of. I figured, like, so eleven billion was spent on on surgical We're sorry, let's see eleven billion spent on surgical compared to fifteen billion on non surgical.
Yeah.
I always like, maybe it's just because I've been in aesthetics, Like that was something in the report I thought was pretty interesting, you know, because the cost per transaction is much higher on a surgical treatment obviously less right, So I'm like, Matt, how many botox appointments can you do in order to like compare next to breast augmentation rhinoplastic Right, for example, that's a four billion dollar delta. So people continuously want to invest in non surgical treatment.
Yes, yeah, and that's that speaks to a lot of things, right, I mean, the technology science getting better for non invasive you know, in fact, we've we talk.
I know you're in it as well. We're in the.
Plastic surgery space. And some plastic surgeons have mentioned too, is that the effects that some glue tide has had on their practices, like people who are going to do lip pose section. Okay, maybe not anymore so as these technological things change, you know, I think plastic surgery is changing along with it, of course, But yeah, I agree. I think certainly the growth in medical esthetics is outpacing
plastic surgery, which has been around longer. In fairness, it's a more mature market and so the growth rate is closer to other you know, medical subsector growth rates. But yeah, that's a really good point. That one stuck out to me as well.
Yeah, and I don't know if it was like where it was in twenty two or twenty one. I didn't see that in the report. Might be in there. I definitely want to go through this thing again. But you know, it just goes to show like business changes and evolves, and if I'm a plastic surgeon, you know, I see a lot of plastic surgeons that obviously adapt and bringing
aesthetics into the practice. And we've seen that. But if I have, or I've only kind of done it, or I haven't, I think some of them still may devalue it because they're a surgeon. You know, it carries a
little bit of ego if you will. And Man, I think that they better really start considering this going forward, that this is probably going to I mean, overall spent is out pacing, so like eventually, it just kind of goes to show that the aesthetic side is going to outpace your surgical side of your practice eventually.
And that's such an interesting conversation, Cam because I remember a few years ago you go into plastic surgery conference and you know, you didn't really talk about medical aesthetics. You didn't talk about non invasive you know you've been to the recent ones as well. I know they're starting
to introduce those sessions in there. So it starts, you know, it starts showing you, I think, macroeconomic where that market is going, which is, okay, it's going to start to be adopted to your point, which is but then you start looking at okay, what do investors think about this?
And if you look at some of the statistics, like we talked about this space, the non invasive space being resistant to market economic downturns, plastic surgery gets hit pretty hard oftentimes during market economic downturns because it's you know, sometimes it's a one time thing you need and you might put it off a year or two years before you cut a forty thousand dollars check or depending on what you're doing.
So that's one thing.
The other thing is from a risk perspective, surgical revenues are a lot riskier than from an investor perspective anyway, surgical revenues are a lot riskier than non surgical revenues, so they're actually valued lower, which I think shocks a lot of people than you know, medical aesthetic non invasive revenues.
So completely agree.
I mean, obviously our first suggestion is run your organization according to your vision.
And your DNA.
But if you are open to that, we are big proponents of, you know, adding you know, kind of that medical aesthetics non invasive side to surgical practice.
It works, It works really well.
It also reduces like key person risk and things of that nature. That if you're a you know, single surgeon or even two surgeon organization, you have quite a bit of risk there because yes, you're able to produce four or five million revenues by yourself, which is unbelievable by the way, but it's all dependent on you. So it's a really fascinating conversation that one totally totally.
Yes, you're saying that the valuations on the EBITDA trade at a higher rate on the non avasive side.
Correct.
Yeah, if I have a two million dollar business, both of them, two of them one surgical ones not the one that's not is going to trade higher.
I figured that. I mean sense like, yeah, you're going to go and it's a one and done. Typically most you know, most times it's it's you're buying them, you're buying them. I call it patient lifetime value. You know, that's what that's what you're buying, is the loyalty and the repeat, right, which kind of brings you out to my next point, Like I'm here page twenty seven. It talks about retention. You know, patient retention is is oh
my gosh, so important. In fact, a quick little call out here, like you guys, please invest in running a consult the right way, building out a treatment plan. I know I talked about it a few times on recent episodes, but this is what's really going to help protect you
in patient loyalty, patient retention. The benchmark here that Q sites puts out is patient retention should be high, and in fact they say greater than seventy percent is most attractive since higher retention facilitates revenue substantially and has a compounding effect on a patient visits and therefore profit. A lifetime client can be invaluable considered a patient who returns four times a year, spends one hundred to five hundred
dollars per visits, and stays more than three years. But's so interesting about that that's the same data I have.
That's awesome. I love that. That's really good to hear, you know. And this is what was fun about this white paper with them, right is q site had the data and I think the data, if I recall, is forty eight to fifty percent retention is what they came up with. The seventy percent was then from us, which is like, that's great, we see it. Our best in class.
What we try to push for is seventy percent. And then it's funny you brought this one up because it's my personal favorite KPI can because like, if you have a practice, it's fifty percent and one that's seventy percent. There are a lot of KPIs that is a standalone, don't tell me a lot. It's like, okay, but I want to look at this other one. This one tells you doesn't. And I'm curious your viewpoint because this one, to me tells me I'm a patient walking in and
you're greeting me correctly at the front. From a provider perspective, you're treating me well. Your chair side maner is good as I'm leaving. You're trying to rebook me after I've left. You're adding some sort of value. Maybe you're sending me an email. Certainly you're sending me reminders of my appointments coming up, so you're keeping me in touch with you in top of mind. So it's this one KPI that takes the clinical as well as operational efficiencies of an organization.
It's the one that I really enjoy looking at because the other thing is like, if I'm paying you a bunch of money to bring patients in the door and I'm letting them leave out the back door, I mean, that's pretty frustrating that all you're doing is replenishing patients versus growing a practice an organization.
So yeah, i'd love your thoughts on this one. Since you went to it.
So yeah, no, absolutely, I mean I see, like I mean marketing companies, social media. You know, SEO can always produce new leads. You know, we can just take it there, right, You you have the ability to produce leads. And you know, because the the audience hangs out on those platforms are either going to do a Google search or they're going to look at your Instagram, your social you know, you're going to hit them with a Facebook guid. You have
a website, you have Google my business. You can bring leads in, right, but like kind of zero and back. You actually you have to have a system to convert them. And you you have to, uh, you know, acknowledge the fact that someone's raise their hand and they're interested in a service and a treatment. And if you nail that with systems, processes, TechEd and you have the ability to to convert these leads you know, at a at a
decent percentage, that's like nailing the first thing, right. So if you can convert at a really high rate and bring them in, educate them, get them on a treatment plan, and then have a robust checkout process. And the robust checkout process that I like that what is best in class that I see is upon leaving. Educate them like during the treatment, let's just roll back a little bit.
During the treatment, educate them on all the products and services you have, not through sales, but information and you're the expert, right. And then as they're checking out, rebook them, ask for feedback and get a Google review out of them. Educate them on the inventory that you have. Right. Most practices carry a skincare line that's going to enhance her experience, right, So that's an upsell which keeps them loyal and wanted to come back and reload when that product runs out.
Connect with them on social media. Great time to get a testimonial, have them call you out on social media on a story. Right, get them on a membership plan. Then they're really low. That's going to increase best in class when it comes to patient retention. Right. So it's
important obviously get the leadson and convert them. But if you do not have that checkout process dialed in, it's going to be a turn and burn operation and you're continuously having to spend a tremendous money on marketing and be stressed out to get new clients.
That's great advice and inn that cool, Like these little data points, that's where I think folks can go in and compare it against their practices. And let's say that I am listening to this and I'm one of those forty eight percent and I see seventy percent and I listen to your device, Like these are things that like data is so valuable because if you benchmark yourself against this,
you kind of know exactly where you can tweak. You know what's possible anyway, Like if I'm forty eight percent, okay, what should I be? And if seventy percent is your new target and benchmark, then I heard what you said, and I'm comparing what I'm doing versus what you said, and I can take action on some of these things. And that's how you really start turning the practice for organization into this like really efficient machine, which is pretty exciting when you see folks do it.
Dude, you just nailed it. Like that's the whole point of the data, right, Like let's get the data, let's look at it, let's talk about it, and then where are we at as a practice? So it doesn't matter if you're guys, if you're not at seventy percent, cool, it's an area to explore of opportunity to evaluate you are and now you can bring this up in your weekly sales meetings with your team and say, hey, we want to go from from why or X to Y or whatever. Guys like, what are we not doing? You know,
and focus on that retention. But you have to know your numbers, Ben, Like, Yeah, that's the other hard part is I see time and time again where you know, the practice owners they may not know what their retention rate is, you know, and maybe not have the best systems and tech in place to know it. That is, I think EHRs and EMRs are obviously getting better, and if you're using them diligently the way that they're designed, like, you should be able to pull these reports pretty quick.
But you know, that's another issue that I too, one hundred percent.
That's exactly right.
And I'm hoping that, you know, with consolidation in this space and the newfound focus on data and knowing what's going on in practices, that we'll see that get better. And they're continuing to get better as you just mentioned, Cam, But yeah, I completely agree with you.
I think practice owners.
Have to have the ability to have good tools in place to give them a chance to succeed.
Yeah, man, I know we could talk on this report for a long time. I don't know how much more time you have, but you know, like I think we've covered a ton of meat and given a tremendous amount of value. I know you're super busy and I'm as well, So why don't we do this guys? You know for the audience that I think there's a lot more to go through on this. You know, for example, this is just a couple quick call outs before we go in two percent of all esthetics patients were millennials or younger
in twenty twenty three. Like, that's amazing, you know. So and again back to the exercise you and I just did. I see the data? Okay, cool, if that's what it is, what are we going to do in terms of our marketing and the demographic of the approach? Right? So, like see the data? Who is your who is your audience? And then what action are you guys going to take? Right? Let's just go, is there any other call outs you want to talk about before a set of transact.
That's actually the one that I was going to mention is the forty two percent millennials You're younger, and you just nailed it. Like, now that you have this data, you can analyze, is this who I'm reaching out to?
Is my service mix geared toward these people?
Because you know a decade or fifteen years ago, that wasn't the case. It was an older uh you know, female wasn't really talking about it because medical aesthetics wasn't as accepted as it is now. Now things are preventative and so forth, which completely changes the demographic of the patient base. You know, I would say one thing would be and we haven't really seen the uptick yet. We keep saying we're going to see it. We haven't seen it.
You know.
Male adoption was kind of interesting. Male adoption into this space hasn't been as fast as we would expect. However, if you look at spending habits, they line up with the females and in some cases outpace it. And that's something that I think surprised us, which was a pretty interesting you know, I think it's like in a chart there right here, kind.
Of an Excel thing. Yeah, so that was kind of interesting.
I thought, Yeah, it shows that the males actually spend almost four hundred dollars more per visit and that interesting. Yeah, I thought that. Yeah when I pre read this, that was very interesting. I'm like, huh, I wonder how, I wonder why that is. But yeah, it shows here, guys, in twenty twenty three, females the average like ticket, for example, thirteen eighty male seventeen sixty six, which is which is really interesting. But and then it breaks it down by
like segment female male. There's also a really cool report in here, guys that talks about gen Z and younger millennials, gen X boomers, what they spend, what services they invest in. You, guys, you have to get this report like it's amazing and take the time to read it and then don't like don't get the report and just read it and just tell yourself you read the report, Like read the report
and take action. Like that's my biggest thing is there's a lot of people that are like listen to podcasts, they listen like they read books audio and they just just like, don't just read it. To read it, like take notes from it and then implement all of the data points that can move the needle for the practice, because that's what's going to put you, guys in a
position to have ultimate success. And especially going in a twenty twenty five like this is a perfect time over the holidays, digest the report and then take action based upon what the data tells us.
Yeah.
I think financial data or KPI data really can drive everything from culture to operational guidance.
We do it all the time, by the way.
I mean, I look through things like this for investment, banking and management consulting firms.
To see how we're tracking.
And it's really neat because, as you said, a camp, I do take notes and I put it against our numbers, and I keep it there as.
A reminder of where we have the.
Ability to tweak, because it allows you then to double click into why am I lower than industry, and therefore it allows you to start correcting some of your behaviors. It really works because you know there's that saying. I know you say it too. You get what you measure, right, and if you're measuring that, that's something that you'll be focused on.
Yeah. No, absolutely, I one hundred percent agree, Ben. It's been a pleasure having you on, man. I think we could talk for another hour. Sure, But like if somebody if they want to go get the report, where's the best place have you guys published this on the.
Site or yeah, I think we have it on our website.
You can also, you know, kind of use any of the emails on our website that are available there and we'll get it over to you.
It's certainly something that we like sharing with the industry.
Yeah, I'm on their site.
Guys.
If you go to knowledge Base, I believe it's under blogs Business Development, it's on the site.
Oh perfect.
Yeah, and for some reason, you guys can't, Fine, I just get in touch with sky Tell. These guys are best in class when it comes to understanding the market. They are like extremely detail oriented when it comes to understanding what success looks like in order to run an effective practice. I know quite a few people on Ben's team.
They're amazing. They're out of Dallas. So if you guys are are you know, seeking for advice on what to do within your aesthetics practice from a consulting standpoint, Maybe you're looking to exit, Maybe you're looking to exit in ten years from now. Maybe you want to run your practice like you want it to exit so you can
get the highest value from it. That's like, you know, that's one of the things I always say is run it like you're going to sell it, because that's how you can really get tightened up in your numbers and your efficiency and your process. And you run it that way and you're going to have a very robust machine. So I'll leave it at that. Guys, thank you so much for taking the time to tune in, Ben, thank you for joining and you, guys, if you found this
valuable this specific episode, please share it. Let's get the conversation going. I know that you have colleagues that could get a tremendous amount of value from this white paper and from Ben and I just kind of going through the data and talking about taking action from the data. So I'll leave it at that. Guys, You guys have a wonderful weekend. Until next time, Happy injecting.