Most med spas launch a membership program for good reasons: recurring revenue, loyalty and more frequent visits. Few ever check whether the program, as designed, actually makes the clinic more money than serving the same clients without it.
Measure members as a group
Each month, separate member activity from non-member activity and compare:
- Revenue from members, including dues earned and treatments purchased
- Average visit frequency for members versus non-members
- Average discount members received
- Product and provider cost of member treatments
- Contribution margin from members
Count the full cost of perks
Free monthly add-ons, member-only events and complimentary products all use product and staff time. Assign a cost to each perk and include it in the program's results.
Look at what members would have spent anyway
Some members would have visited just as often without the program. For them, member pricing is simply a discount. The program earns its keep when it increases visit frequency, retention or average spend enough to outweigh those discounts. Compare members' spending in the year before they joined with their spending after.
Track churn and banked credit together
A member who pays for months without visiting may look profitable while their credit builds up. A member who cancels and asks for unused credit, if your terms allow it, reverses that. Monitor:
- Monthly cancellations as a share of members
- The average credit balance per member
- Members with no visit in the last 90 days
Members who have not visited recently are both a liability and a cancellation risk. A personal outreach program often brings them back.
Signs the design needs work
- Member discounts on product-heavy services leave very little margin
- Most member revenue sits unused in banked credit
- Visit frequency is not higher than for comparable non-members
- Cancellations rise sharply after a few months
Adjust and remeasure
Small changes, such as limiting discounts on high-cost products, capping rollover in line with state rules or replacing a costly perk with a low-cost one, can change the economics substantially. Change one thing at a time and measure for at least a quarter.
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