It’s Time To Sweat The Small Stuff
Where our attention goes is where our energy flows. Where our energy flows is where we see true change. By directing our attention to specific areas, we ignite exponential growth. To sustain or enhance outcomes, we must concentrate our efforts. In both business and life, prioritizing what truly matters is essential. Embracing Pareto's Principle and emphasizing the critical 20% that yields 80% of the results can lead to transformative achievements. The key lies in recognizing and nurturing that crucial 20%.
As is the case in business, the best medical aesthetics practices are effective at understanding the key metrics that drive 80% of their results. These metrics are not merely financial. As those who understand business know, it is many times the little things, which are not always financial, that generate the greatest return. Sometimes, sweating the small stuff is necessary!
Given the overwhelming amount of data, how do we know what matters most? The first thing we must do is understand what drives the business on a day-to-day basis. We must think about leading indicators and not allow our focus to get caught up in being an observer of the past. We want to be active participants in the present and engaged with the data as it is generated. We must also understand our objectives for the business. Every business is at a different stage and requires a different level of focus. Where our energy goes when we are first launching is very different than where we channel our energy after we’ve been open five years.
Think of a business like raising a child. Infancy requires much handholding and guidance. At this stage we are deeply involved in every aspect of a child’s daily life. As the child develops, we find ourselves delegating more and doing less physical work. However, like in business, as our child matures, we actually find the job of parenting to be more challenging, if not more difficult. This is because the stakes are higher with an intellectually advanced child. As such, micromanagement no longer achieves the desired result. If anything, it can have the opposite effect. What is needed is strategic and thoughtful leadership coupled with high expectations for self-regulation. However, one thing that never changes is accountability for results. The accountability thread runs through the life of the relationship.
We have stated many times that we must know the big or obvious data, such as gross revenue, net profit, labor cost, cost of goods sold (COGS), marketing expenses, etc. Failing to attend to these can be disastrous. However, these items tend to be a result of the small stuff that happens in our daily operations. For example, labor costs are driven by our ability to not only schedule effectively, but to actively manage the schedule on a daily basis. This is known as schedule utilization. By employing practices to effectively manage the schedule, we can positively impact labor costs in real time. Seemingly small stuff like this can have an immediate and significant impact on the bigger stuff.
Here are some considerations regarding minor details to ponder as you evaluate the growth phase of your practice, your strategic goals, and the outcomes you are currently achieving.
Schedule Utilization - How full are your books? Do you pull from the future to fill the present? Do you cut labor when necessary? Do you manage appointments so that the most profitable services are offered during the most demanded times/days? e.g., no full body laser hair maintenance on Saturdays.
Net Promoter Score - Managing Google and Yelp reviews are critical. However, the best way to head off a potentially devastating online review is to know about the issue prior to it making it out the door. Most EMR/POS systems offer the ability to gather feedback about a service immediately. This not only allows you to avoid a potentially embarrassing online review, but it also affords one more opportunity to hold the team accountable for service-related interactions and results.
Client Referrals - We many times focus on social media and paid campaigns as our primary source for new clients. However, referrals are a great way to generate the coveted “warm lead”. As we all know, it is much easier to convert someone that was recommended by a raving fan. Here’s the question, how many referrals do you receive? If the answer is few or far between, it may be an indicator of a couple things. 1. a lack of effort. 2. Clients not willing to refer their friends or family. 3. Tapped out the referral sources. Neither 1 and 2 are good, and 3 is unlikely. You know how to address 1. However, 2 may be more telling. If clients aren’t willing to refer, you need to find out why. If they’re not telling their friends they’re not telling anyone else either and you are missing a low-cost growth opportunity.
Average Invoice - Sometimes people get caught up in client lifetime value. While this is good data, CLV is a measurement across the entire client relationship. We want to know what they spent today. Every transaction should be evaluated based on the total of the engagement. By knowing this you can learn many things. You may be able to infer whether the team is listening to the client and truly meeting their needs. For example, no one comes into a medical aesthetics practice because they solely want the lines on their forehead relaxed. They’re coming in because the aging process has them concerned. That’s why each team member must dig deeper and expand the opportunity by listening and offering other service options to meet their unidentified needs. As such, a great consultation process can lead to great growth opportunities across the entire practice.
The above makes up a very small portion of the opportunities to identify those little things that can have a great impact on the big things. Once you have identified the key metrics that drive 80% of your results and you effectively deploy processes to drive the underlying behavior, you will find that managing the business becomes easier and growth becomes the norm. You may also notice that running a practice becomes fun again!
💌 Are you ready to take on an investment partner to help you grow your medical aesthetics practice? If so, we are here to partner with you every step of the way. Fill out the contact form or send us an email at info@baraesthetics.com and we will schedule a call to discuss the possibilities.
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