Developing or growing your retail sales business in a down economy can be difficult. During a recession, physicians often would rather discontinue their retail product lines than try to sustain or grow them. While a slower economy may require you to re-evaluate the products you carry or to rebalance your product portfolio, there are still many reasons to offer skin care as a complement to your practice procedures.

The Lipstick Index
Diversifying your aesthetic portfolio might be one of your best defenses against wild market gyrations. Practices that fare well tend to focus on multiple streams of revenue rather than just targeting one segment of offerings. Statistics show that retail skincare sales and lower price-point luxuries (e.g., mascara, lipstick) offer a meaningful opportunity to introduce new patients to your practice and retain the patients you may already have. Unfortunately, a significant number of doctors feel that patients will turn away from physician-dispensed aesthetic products during tough economic times. Too many physicians feel that patients will go "over the counter" for products or will cut out skincare regimes completely in order to save money. On the contrary, economists say that consumers actually turn to less expensive indulgences, like mascara or skin care, when feeling less confident about the economic future.

In recent years, financial theorists have named an index related to the principle of less expensive indulgences. They call it the "lipstick index." The term was originally coined by Leonard Lauder (the retired chair of Estee Lauder), who noticed that his lipstick sales actually increased during slow economic periods. The lipstick indicator has been tracked since 2001 as a reliable signal of consumer confidence. Physician-dispensed products therefore offer an opportunity to capitalize on this phenomenon. Over the past decade, non-surgical aesthetic procedures, such as Botox¨ and Juvederm¨, have increased dramatically, with consumers in the United States spending more than $12 billion on total cosmetic procedures in 2006 alone. As more patients have sought these treatments, many of them also have become accustomed to seeking advice from their aesthetic physicians on skin care, specialty products, and complementary laser treatments. By consulting patients through a "cosmetic pyramid," or step therapy approach, physicians can successfully sell across product and procedure lines.

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 during a recession by marketing products with a less expensive price point. When executed properly, this approach can help you to continue patient conversations about surgery, facial injectables, and laser service portfolios.

Six-Step Plan
To overcome current economic obstacles and maximize lipstick-index opportunities with your patients, implement the following six steps:

1. Evaluate your product line(s) and focus on products that can only be sold through a physician's office. Department store brands can be marked up 75-80 percent for packaging and marketing. Many of them have little or no associated clinical science and offer minimal true value to the patient. In contrast, physician-grade professional skin care products can provide a level of treatment that goes beyond that of over-the-counter product lines.
   
   Department store brands generally contain less-effective ingredients that provide unsubstantiated results, whereas physician-formulated skin care products can provide effective ingredients for improving the skin and treating skin conditions with trackable results. In addition, physician-grade skincare products sometimes have a lower price point than comparable over-the-counter brands, offering an opportunity to provide patients a better value product at more reasonable pricing.


2. Train your staff to treat the entire patient using a cosmetic interest questionnaire (CIQ) and patient treatment plan (PTP). Rather than just focusing on one procedure during an aesthetic patient consultation, train your staff to discuss all of your product lines with patients. Using a CIQ on the front end of your check-in process can be an effective way to identify patient needs, especially as they relate to your overall menu of services. A CIQ takes little time to implement and can offer a wealth of valuable information to use in discussions with your patients. By training staff to consult with patients through a total treatment plan, you easily initiate a discussion around the patient's short- and long-term aesthetic goals. Implementing an overall protocol with the questionnaire and treatment plan allows all staff to openly discuss a patient's lifetime aesthetic needs rather than simply focusing on one patient procedure.


3. Continue to market your cosmetic products and lower luxury items despite the downturn. The first inclination of many physicians during a recession is to lessen their marketing spend or stop marketing altogether. As the lipstick index shows, troubling economic times may have some of your aesthetic patients looking for smaller luxury items (e.g., skincare, mascara) as a pick-me-up. Packaging these products together or discussing them in consults creates great opportunities for retaining patients who otherwise would wait to build a relationship with your practice until after the economy improved.
   
   Some practices have even found it useful to offer combination product packages on their websites. In addition, offering special promotions as a follow-up to certain procedures can be a great way to cross-sell patients into additional menu-of-services features. 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.


4. Capitalize on new market creation or innovative products. Research shows that aesthetic patients tend to have an interest in the "next best thing." Finding an innovative product or creating a new product market opportunity is a good way to set your practice apart during difficult market conditions. Being new, innovative, or different has the potential to clearly differentiate your practice from the competition in a patient's mind. Discovering new technologies and/or product breakthroughs can add great value to what you offer your aesthetic patient base and provide an opportunity to contact your current patients with something unique and exciting to discuss. It also demonstrates that you are an innovative practice, with an eye on "what's new and exciting."


5. Recruit, convert, and retain patients. With the recent increase of interest in aesthetic procedures and products through direct-to-consumer marketing, there is an opportunity to recruit new patients through additional cosmetic products. Market research shows that aesthetic patients who have received treatment for injectables usually have an interest in complementary skincare protocols. By cross-selling skincare options to your surgery or injectable patients, your practice not only may see increased revenue upon the initial patient visit but also may open the door for a long-term retention opportunity. For example, if a new Botox¨ Cosmetic patient comes to your practice for a treatment and decides to purchase a new eyelash product, such as Latisseª, upon arrival, you have increased the revenue of that initial patient visit. Additionally, if that same patient makes a commitment to purchase a Vivite¨ skincare kit once every four months, you have increased your revenue while generating a longer-term patient commitment to skincare. This long-term care opportunity can become an exciting and inexpensive way to grow your practice organically. Lastly, as you develop the conversion/retention of patients in your practice, you will become an integral part of the patient's lifetime of aesthetic planning and development.


6. Track the return on investment (ROI) on your product offerings. Analyze your product portfolio for best results using the Boston Consulting Group (BCG) Matrix, which was developed in the early 1970s to manage and track what your priorities should be within your product offerings. The BCG Matrix allows you to quantify your physician-dispensed products in four categories: stars, cash cows, question marks, and dogs. Tracking and evaluating the products in your practice can be critical during tough economic times. The following four categories can help you determine which products make the most sense for your overall business strategy.
   1. Stars. Stars are your high-growth aesthetic products that have good product recognition, compete well with the competition, and may need some heavy investment to sustain their long-term growth. Eventually, the growth of stars will slow, and they will become cash cows.
   
   
   2. Cash Cows. Cash Cows are your low-growth products with relatively high market share. These are your more mature products with little need for investment. Your cash cows should be managed for continuous profit so they will continue to generate strong returns.
   
   
   3. Question marks. Question marks are products that have low market share but still may have potential. Your question mark products may need a lot of attention during a downturn to decide whether or not they make long-term sense.
   
   
   4. Dogs. Dogs are the products in your portfolio that may have a low market share and may only be generating enough profit to break even. In a down market, dogs should be the first product offerings you consider eliminating.