Our guest author for this newsletter is YellowTelescope’s Sr. Director, John Berry, who has expertise in introducing new products and services, having spearheaded medical laser sales, developed and implemented our sister company’s SEOversite LITE and LITE+ services and more. He was on faculty at the recent ASCRS-ASOA event, attended by over 5,000 eye industry leaders, and can be reached for questions at firstname.lastname@example.org.
Issue #32 – Bullets, then Cannons – How to Introduce New Products and Services Profitably
If your team is like ours here at Yellow Telescope, you likely have a staff meeting once every week or so (if you don’t, there’s no time like the present to start). When we get together for our “pow-wows” as we call them, a good amount of our time is spent discussing new ideas or processes, or if we’re past that initial concept phase, we pin these ideas to the dart board and start throwing. After all, if you can easily poke holes in what, at first, seemed to be the next million-dollar product or service, it probably wasn’t that great to begin with, right?
As we enter the summer of 2016, many of you have conferences and conventions coming out of your ears. Some of you will spend more time traveling than you will in the O.R., and while it’s great to get those frequent flyer miles while networking and learning, part of that travel time will be spent in the epicenter of temptation for any wallet – the convention hall.
You tell yourself that you aren’t a buyer this year, and yet you inevitably end up listening or watching a demo of the next greatest laser to come on the market, or a skin care line that will have customers beating down your door to spend their money with you. Before you know it, fingers have been put to iPads and you are the proud owner of a brand new Sun-Ray 5000 fat-burning tanning bed that literally sizzles patients down to 2% body fat, all for the low-low price of $250,000. Of course, that product doesn’t exist – feel free to contact us if you’d like to buy the rights.
We often get questions about how to price certain services, or how to sell this or that. There are a lot of flashy “can’t lose” products out there that just “sell themselves” and it can be tough to navigate through all of them to find what really works. We hope that by the time you’re done reading this, you’ll be able to avoid the pitfalls often associated with new products and services.
Perhaps the greatest pitfall we observe practices make is investing in products and machines before people. The Sun-Ray 5000 is very tempting, but should not be purchased before ensuring you have the right people on the team, in the right seats, retained long-term. Ask yourself when was the last time you invested in training each tenured team member. Have you ever sent your team members to formal management, sales, marketing, web, customer service, leadership, or medical training? Do you rely exclusively on free lunches brought by device reps to improve employee knowledge? Is your reinvestment in your team under 1% of your annual profit? These are warning signs that you are taking risks with your business in the coming year, which include employee turnover, under-performing team members, and reduced patient conversion rates. Indeed, if you have great machines and products, but nobody or poorly trained people selling them, you have the compound pain of missed revenue coupled with large monthly payments.
The YellowTelescope Training Seminar is a great option for team training, but there are dozens of superb options available, from Tony Robbins motivational courses to Cool Sculpt University, to various annual conventions like Vegas Cosmetic Surgery, AAFPRS, ASCRS, AACD, ASPS, and the ASPS Re-boot camp that are all great values. Further, there are webinars and learning opportunities through our preferred affiliates like RealSelf and PracticeDock.com. Take advantage and consider spending some of your budget at your Spring and Summer conventions on opportunities for personal and professional growth for your team and you.
Something New You Can Promote
Assuming you have highly trained people ready to fight the good fight for 2016, it is time to go shopping. If you’re looking at adding something to your menu, keep an eye out for things you don’t have. Try to avoid the product or service that’s just a touch better than what you currently offer, especially if your current offering isn’t doing well. Many times we’ve found that it’s not the product’s fault, but rather the culture in the office or practice. And to boot, the practice has three different lasers that improve skin pigment but nothing to address facial or body fat.
Next, ask yourself if you have someone devoted to promoting it. Is it truly being offered regularly when applicable, or has it found its way to a dark corner of the office to collect dust? Rather than spend the money for a newer model, it might make sense to dust off the current one and make money there, first.
If you’re already successful with the last model or if it would be a new revenue stream for you then give it a shot, but be sure to take advantage of trial offers and keep track of money-back guarantee periods. Get your team on board with a contest so that they introduce it properly and often. Send an email blast introducing the new product and schedule an event at your office with at least a full month to promote it. Have printed information to hand to every patient who visits the practice. Add the product or service to your website and consider a temporary website “pop-up” as soon as a new patient enters the site that promotes your shiny Sun-Ray. In other words, get the word out everywhere you can.
Next, ask yourself what is the maximum upside and compare that to the downside. If a device, for example, is $100,000 and you expect to recoup your initial investment within 2 years and then feel you can sell another $100,000 before it becomes obsolete, that means you have 3 years to make six figures which is only an average of $33,000 or so per year with a downside risk of up to $100,000. While nice, that is a very limited upside and you’d do better putting the money in the stock market. Comparatively, if you were to introduce a new injectable filler like Kybella which has a start up cost of a few thousands dollars, will make you money by your third patient and every time you sell it you earn profit, there is an enormous upside potential over a 3-year period. As a final example, if you were to purchase the latest cataract laser for $250,000 and could sell the upgraded machine for $3,000 in profit per case and expect to perform 100 per year for the next decade, you can make 3 million dollars which is a very large upside for a relatively small investment.
Fire Bullets First, Then the Cannon
We’ve heard story after story of doctors who purchased a multi-hundred-thousand-dollar machine only to find out later that their investment would never be recouped. This is the equivalent of shooting a cannon when a bullet will do.
My initial involvement in the medical industry was as a laser light therapy salesperson, a modality to combat and slow hair loss. My practice had begun promoting these new personal devices that patients could use at home to slow down or stop the progression of hair loss over time. They were sold here and there and the practice was achieving around $10,000/month in sales – there was almost no downside risk and limited upside potential. Thus, this was our bullet. As sales of the device began to level off at a profitable monthly clip, we realized that they could really take off if there was someone devoted solely to promoting this product, so I was hired to fill the role of Laser Light Therapy Specialist. I’m not cheap so this was our practice truly investing in the program and shooting a proverbial cannon. Within two years we were selling over $500,000 per year and had built a highly profitable and impactful business within the business.
Would it have worked had they fired the cannon first? Possibly, but there would be great risk. What if they hired me first only to find out patients largely weren’t interested in the product or that it didn’t work for patients? I would have been out of a job, and the practice would have been left with thousands of dollars in inventory, not to mention the extra person on the payroll.
As you think about shooting your own bullet, don’t worry about the extra cash you save by buying products in bulk at first, or that buying the laser outright is cheaper than renting it – of course it is! But do you know what’s even cheaper than that? Saving the money you would have spent when you realize it’s not the investment that you thought it was. Buy a little at a time. Rent the machine first. Once those bullets are hitting their mark, then and only then do you shoot the cannon.
As much as we wish every single client hired YellowTelescope for our full service consulting, the reality is many stick their toes in the water and learn about us by attending our annual seminar which has a 100% money back guarantee. By providing an option with literally no risk, we find that attendees have a chance to test drive YellowTelescope and more end up hiring us long-term. We do these seminars because they are our labor of love and our soul on a plate, but we also love that it serves as the bullet to hiring YT’s cannon. Even our sister company offers a free service called SEOversite LITE and if folks love it, they can hire us for more comprehensive web consulting services. We know you should shoot bullets, then cannons, so we create services that fit our beliefs.
Find Something You Truly Believe In
I’ve always said that I cannot offer or sell anything that I don’t truly believe in. My father is the General Manager of a Ford dealership outside of Atlanta, GA. Now, one could argue that Chevrolet or Dodge makes a better truck, but even if they did – and they don’t, I humbly submit – my dad just couldn’t sell them. Why? Because he doesn’t believe it’s the best truck available. Can you tell I’m an F-150 fan yet? Ed may like Vespas, Jon may like Jaguars, and others like Teslas, but it starts with IASM (“I am sold myself”).
Believing and having confidence in what you’re offering is key. Customers and patients can tell it’s the best, because you believe in it, and you’re the best, so why wouldn’t they get it? It’s almost like they’d be losing money if they DON’T get it!
Be the Expert
Also known as having full product knowledge, being the expert on your new offering is very similar to building rapport with a patient. All things being equal, the patient will always choose the doctor that he or she got along with better over the other. It’s exactly the same with expertise – patients will usually choose the expert. To be clear, I’m not saying that you shouldn’t offer something new until you know every answer to every question that will ever be asked, but either you or the person you have devoted to selling it – whether an established patient coordinator or a brand new hire – should be prepared to learn at a professorial level everything applicable to selling that product or service.
In summary, introducing new products and services – when done properly – can be both exciting and profitable. There will be a myriad of attractive options to purchase as we head into convention season. Be diligent, do your research, and shoot bullets first. Don’t jump the gun. Resist the temptation to stroke a check for a new machine or bulk purchases to “save money” until you are 100% in and committed. Importantly, also only do so after you have invested in personal and professional growth for yourself and your team. Not only will you avoid a big regret later on, but your people and your bank account will thank you.