Industry • Perspective
Boulevard's 4 Most Important Takeaways From AmSpa's State of the Industry Report
Sep.26,2023By Boulevard Staff
This bird’s-eye view of the medspa industry provides insight to better understand clients, choose menu services, and more
There's a lot to learn from the frontlines of daily medspa work, but sometimes a top-down view can help put things in perspective. The American Med Spa Association (or AmSpa)'s State of the Industry Report provides precisely that. It contains a wealth of information about the medspa industry as a whole to help you invest in the right menu services, marketing methods, and more.
It's also a hefty document, with scores of pages and hundreds of data points. So if you're worried about finding the time to sift through the noise and find what matters for your business, don't fret: Boulevard has you covered. These are the four most essential takeaways from AmSpa's 2022 State of the Industry Report.
The medspa business has many facets, and would-be business owners have a lot to consider. Experts say that between half and 90% of all start-ups underestimate quite how much cash and planning are required to start an aesthetic practice. But the AmSpa report has plenty of advice to offer on the early stages of medspa work:
Start slow: Being smaller means you can grow your skillset before the daily demand makes that challenging to schedule. Avoid building up too much overhead by focusing on the areas of the business that will bring the greatest ROI.
Have a vision: No business can meet every client’s every demand. Rather than spread yourself too thin, create an identity for your business that carries deep appeal for your target clients. Stay true to and consistent with that vision.
Build a team: Starting a business means meeting myriad challenges you may not be prepared to face alone. Investing in the right experts, even if it comes at a bit of a premium, will help your business flourish in the long run.
Setting your menu
It's often difficult to decide which procedures to offer your clients. AmSpa found that 40% of medspas see key opinion leaders (KOLs) as the most valuable resource for learning about new treatments. Industry conferences came in as the second most valuable resource for info on treatments, with 30% of respondents rating them as such. Just as many respondents noted that company sales representatives could be just as helpful — provided they demonstrated deep knowledge of the industry.
Facial injectables are now the most commonly offered service at medspas, with 94% offering them. This service seems to appeal particularly to younger generations who are interested in preventative services. Other non-surgical aesthetic services came in second with 92% of medspas offering them. Also worth noting: other services such as massage, yoga, nutrition classes, and more are becoming increasingly common at medspas. Only 28% offered any such services in 2019; by 2022, that number had jumped to 48%.
If you're looking to add injectables or any other service to your menu, AmSpa suggests asking these questions to reveal whether it's right for your business:
Have you done market research that shows demand for the treatment among your target demographic?
Is your market area already over-saturated with providers for this treatment?
What's the potential for return on investment (ROI), and what metrics will you use to track the treatment and determine its results?
How familiar is your staff with the treatment? What training opportunities are available to them to learn?
Can your client base afford the treatment?
Understanding clients and seizing opportunities
It's no surprise that women continue to comprise the majority of medspa clients at 88% of all visits. Women aged 35-54 are the largest patient group at 52% of female clients. These numbers have basically held steady since 2019. But not everything is so static: More and more men aged 18-34 are visiting medspas. They now make up 24% of all male clients, up from 18%. This trend demonstrates both the effectiveness and the importance of a powerful marketing suite. Men remain an under-tapped pool of clients; by using gender-inclusive marketing, you can help them learn the benefits of regular medspa visits.
"Regular" is a key component here. AmSpa says 65% of medspa clients are repeat visitors. That's one bit of good news piece among many. Also promising: The average number of patients per month for both single and multi-location businesses continues to rise, as does the average ticket. Medspas now enjoy around 283 visits per month, up from 243 in 2019. At single-location medspas, the average spend has gone up from $459 to $543, and at multi-locations, it's risen from $465 to $506.
Revenue and reporting
Speaking of financial concerns, the average annual revenue of a medspa open for the full year in 2021 was $1,722,551, indicating the high productivity of the business. What's a little more concerning is that 42% of medspas could not estimate their revenue at all. Even among those that had total revenue estimates, nearly a quarter (24%) could not break that revenue down by service.
These medspas have all kinds of reasons for not tracking these metrics. For one, the value of doing so isn't immediately apparent. That can make it hard to dedicate the time to tracking. For another, many medspas are owned by practitioners who have never received the kind of business training required to maintain detailed financial data. They may not even know this info can be tracked. Finally, AmSpa suggests having access to all this data in a single, integrated, and easily navigable system is rare.
So why track this data at all? Because according to AmSpa, doing so is one of the top things successful medspas do. Here's the complete list, plus tips on executing:
Have a business plan and conduct thorough research before opening. Maintain an annual marketing plan and budget.
Differentiate yourself and choose a target demographic rather than attempting to appeal to everyone. This is where having a strong brand comes into play.
Continuously track data metrics that inform your practice's performance. Integrated sales and revenue software can automate this process, generating detailed, actionable reports.
Remain client-centric, rather than profit-centric, by focusing on quality of care and compliance. Doing so will strengthen relationships with clients and allow you to lean into word-of mouth marketing. Client relationship management software makes it easy to intake client info and power a personalized experience for everyone who walks into your business.
Pay staff well while investing in continued training for them. Always keep staff learning and growing. Staff performance reporting can show owners and managers where team members might benefit from coaching, deserve promotions, and more.
Whether you’re new to medspa operation or simply looking to optimize your business, these takeaways should help you deliver quality care your patients can recommend.
Have big plans for your medspa? Be sure to grab your free copy of our latest medspa guide, Five Secrets to Running a Medspa: A Manager's Guide to Success. Download now