A Prescription For Skincare Sales Results In Physicians’ Offices
Beauty brand founders may want to consider making appointments with their doctors. Skincare sales in the physicians’ channel surged 6% last year to $900 million, according to Kline. While the segment is growing, it’s ruled by brands — Kline names SkinCeuticals, SkinMedica and Obagi as the top three professional skincare players — that have perennially been dominant. Doctors are looking for second, third and fourth skincare opinions. “They are a lot more open now than in the past to bringing on different brands to try and see how they do,” pronounces Sarah Engel, vice president at Physician’s Beauty Group. Beauty Independent didn’t obtain a medical degree to share tidbits about doctor’s offices, but did speak to several experts on distribution at medical locations to ascertain information about the preferred protocols for skincare brands seeking to get their products to patients.
- The doctor will see you now
- There is no Walmart of the medical field with thousands of doctors’ offices stocking skincare products. If a brand is targeting the physicians’ channel, it will have to pursue clinicians location by location. Aubrey Rankin, founder and CEO of HintMD, a platform customizing beauty programs for patients, suggests skincare brands going after doctors’ offices concentrate on them and not simultaneously chase online distribution. “If you want to do it right, you can’t do one thing or another,” he says. “There are a lot of brands doing both, and providers aren’t loyal to them. The providers see them as competitors. They think, ‘Why did you sell to me and also sell directly to consumers over the web?’” Rankin advises emerging skincare brands to assemble a salesforce of four to five people and zero in on the apex of aesthetic medicine practitioners. Patricia Pao, founder and CEO of Restorsea, has aimed her skincare brand at leading plastic surgeons and dermatologists, and it’s been picked up by 100 offices in roughly two years. At the start of her physicians’ channel efforts, she hired sales representatives that had been successful selling Allergan offerings, but found they weren’t productive skincare reps. “They couldn’t close an order. I cold called doctors and closed them,” reports Pao. “It’s very one-on-one. I call these doctors my cats. They are very snobby. They’re at the top of their games. They command $10,000 a day. They don’t want to talk to reps. Also, doctors are very technical. They want to know all the details.” Today, she’s working with sales rep specialist Beauty Barrage to support her brand at medical locations and continues to assist doctors herself. Dawn Ward, licensed aesthetician and skincare director at Anson, Edwards & Higgins Plastic Surgery Associates, recommends brands schedule meetings before they stop by the office, and bring testimonials, products and clinical studies. Studies are critical to breaking into the medical realm. The fluffy stuff doesn’t fly with doctors. “The last thing I want to do is try someone’s product without information or science to back it up,” says plastic surgeon Goesel Anson, co-founder of FixMD. “This is not a spa.” At physicians’ offices, aestheticians may make skincare purchasing decisions, but Engel points out doctors, office managers and patient coordinators can be decision makers as well. She comments it’s imperative to identify the decision maker prior to engaging with an office. “It varies from location to location,” she says. “It’s not always the doctor that makes the decision, and that’s where studying comes into play.”
- Monetary possibilities of the medical field
- Pao shifted course from a prestige retail strategy to a physicians’ channel strategy, and discovered doctors’ offices can be lucrative opportunities. She expounds many upscale retailers take 40% to 50% margins and stick brands with additional costs. Doctor offices genreally take 50%, and there are few other costs. Pao underscores the skincare competition isn’t as stiff in the medical field. “It’s like where department stores were in the Sixties. It’s the last channel that hasn’t been exploited, but it isn’t easy,” she says. “I couldn’t sit here and compete in a really crowded market. I needed to find a new channel and be a trailblazer in that channel. For us, it really works.” Rankin estimates the doctors yielding the highest skincare revenue can sell $50,000 of a brand’s products monthly. However, he pegs the average at the much lower skincare turnover of $20,000 a year for a brand. Overall, Pao doesn’t believe the skincare products business within the physicians’ channel can match the business a brand can do with broad retail distribution. For Restorsea, she divulges, “This is never going to be a $100 million franchise. It will probably be a nice $20 million franchise. If you run it leanly and well, you can make a lot of money.” Rankin figures most doctors’ offices carry two to three skincare brands, and Pao notes skincare assortments perform better in the offices where they are carefully edited. “My most successful accounts carry less than 50 SKUs and cherry-pick the best from lines,” she says. Skincare brands often develop professional products for doctors’ offices. Restorsea Pro products contain 10 times higher concentrations of the active enzyme than Restorsea’s retail products. Professional positioning, exclusive ingredients, and differentiated and significant effects help distinguish products as brands court physicians. “When a new brand approaches us, first and foremost we want to know if the product is unique,” says Ward. “Do we have another product that, while it may not have the exact same ingredients, may have the same or similar functions?”
- The skincare situation inside doctors’ offices
- Physicians are receptive to new brands. “It’s kind of untapped right now. There are a lot of dermatologists and plastic surgeons that carry a handful of brands that everybody knows. I think there’s a real opportunity for natural and organic brands,” says Engel. “There’s much more of a holistic approach to health, and doctors are seeing that and looking for alternatives.” Anson indicates doctors are discouraged by the skincare status quo in the physicians’ segment. “The smaller companies have been bought up by the bigger companies and what made them attractive at the beginning changes over time,” she says. “One loses confidence the larger the company is. They have to account to their shareholders, and that’s a whole different way of thinking than providing the best ingredients at a fair price for the greater good.” In a doctor’s office environment, ingredients must be relevant to skin conditions. Engel requests brands list conditions their products address to relay to doctors and aestheticians that the products are designed for those conditions. “Being able to know those issues and how your products can fit in and help those issues, that is what will get you in the door,” she says. Fitting in with treatments is crucial, too. Ward says, “Skincare companies should look for a way to complement and prolong the benefits of professional treatments instead of trying to compete with or replace them. In this way, the skincare companies and professionals work together to benefit the customer and offer them better results.” Like virtually any entity that makes money from skincare products, Amazon is a sticky problem for doctors’ offices. There’s a strong distaste among doctors for brands they carry ending up available on the e-commerce giant. “If you want to use the professional channel, you need to be able to protect it,” emphasizes Rankin. Brands fend off diversion imprinting their products with codes that can reveal the sources of product diversion and hunting down Amazon sellers.
- Strategies for small skincare brands
- It can pay to be tiny. Small brands woo doctors with lower minimum order thresholds. Restorsea stipulates minimum orders of $1,500, a sum that’s much lower than the $5,000 minimum order Rankin approximates larger skincare firms demand for minimums. Physicians Beauty Group has no minimum order mandates. Further tactics include offering products on consignment, clearing out inventories of existing skincare merchandise by supplying an equal amount of skincare products, committing to training and agreeing to take lower margins. “If a brand typically gives the doctor 50% of the sales price, they could do it for 60%. That speaks to the interest of the business owner,” says Rankin. Talking about the consignment tactic, he adds, “How can brands put their skin in the game to allow providers to sell their products without making an upfront capital investment? That upfront capital investment is the biggest barrier.” Discussing training, Rankin elaborates, “The bigger brands used to provide a lot of aesthetician and they don’t do it anymore, which is an advantage for smaller brands.” Once brands crack doctors’ offices, Engel counsels them to dole out materials for patients to peruse in waiting rooms and heavily sample. For an office visited by 100 patients daily, she says enough samples to give out at least 50 per day is sufficient. Restorsea seeds entire office staffs with products. “In my best offices, the doctor is completely behind it, uses it and loves it as does their staff. You have to get the whole office involved. That’s the key,” says Pao. “You have to get everybody using it and loving the product.”