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Main Subject - Why Coupons are BAD for Your Business
Offering coupons are a common and easy way to attract new or old clients to your salon, day spa or medical spa. But what kind of client are you really attracting? And
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
are you profitably providing that service once the coupon is redeemed?
Your ideal client is not a coupon-cutter. While everyone loves a great deal, those that
Your ideal client is not a coupon-cutter. While everyone loves a great deal, those that
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
ONLY come to your spa or salon because of your promotional coupon are not likely to come around the second time. Sure, you tell yourself that you provide an outstandi
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
ng service and if they like you, they'll come back. And that is logical thinking -- but it is a tad flawed. And doesn't often come true, sadly. If you are retaining
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
more than 10% the clients that first see you with a coupon, you are way ahead of the rest of us. [To calculate this percentage, divide then number of clients who came
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
back a second time to pay full-price by the total number of clients who used that coupon.] If you don't track your retention rates, or how many coupons are being redee
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
med, you should be. Measuring the impact of your marketing is the only way to can be sure that money spent on marketing is growing [and not hurting] your business.
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
>Every single service you do should be profitable. If you are offering a 20% or 30% off coupon, do you make any money? My guess is no. While offering a $10 or $20
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
coupon might seem like a better choice, they too need to be calculated whether you are profitable. The simplified calculation for service profitability is PRICE minus
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
LABOR COST minus SERVICE COST minus OVERHEAD equals NET PROFIT BEFORE TAXES. Labor cost is what you pay your staff (or you) to perform that service. Service cost is th
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
e cost of the products used in that service [your product supplier should be able to help you with this.] Overhead is everything else like rent, utilities, insurance, m
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
arketing expenses, etc. that you have to pay even if you don't do any services. To calculate the overhead by service, you could simply guesstimate it as 40% of your pr
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
ice. But to a bit more accurate, you would total your average monthly overhead costs and divide it by the average number of services you provide in a month to reach you
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
r average overhead cost per service. You'll probably find that your profit margin is 10% or less for your services -- which doesn't give you much if any wiggle room on
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
offering motivating discounts.
There is another way. You can still attract new clients with promotions that do not require you to pay them money when they rec
There is another way. You can still attract new clients with promotions that do not require you to pay them money when they rec
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
eive a service. Upgrades and add-ons are great solutions here as they don't have to add time to the service, or much cost. Some examples:
- Free
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
skin or hair consultation with first service
Free deep conditioning with hair coloring
Free eye creme with Botox injections
Free lip or eye treatment wit
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
h facial
Free brow wax with your high-end facial
Free shoulder massage with mani/pedi
Free foot reflexology with 60 minute massage
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
l>
Notice the word "free" is common in all of these promotions. Free has to be one of the most powerful marketing words you can use (but that is just my opinion).
Notice the word "free" is common in all of these promotions. Free has to be one of the most powerful marketing words you can use (but that is just my opinion).
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
Do be careful with the giveaways however. As a general rule, they need to cost you less than 10% of the price of the service in order to maintain your profitability.
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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