Cracking the Code of Subscription-Based Aesthetics

Dr. Grant Stevens

Hello everyone and welcome back to the Technology of Beauty, where I have the opportunity to interview the movers and shakers of the beauty business. And today is no exception. Today with us I have Todd Watts, who's the founder and CEO of PatientFi. He's also a very dear friend of mine full disclosure. Welcome Todd. Came from Newport, right?

Todd Watts

That's exactly right.

Dr. Grant Stevens

And we're here in lovely Manhattan Beach.

Todd Watts

On my way to the airport. And it's just a quick stop on the way. So thank you for having us.

Dr. Grant Stevens

Thank you so much for joining us. I've been waiting for this interview. What you've been doing at PatientFi is rocking the whole industry in aesthetics, both med spa and surgeons and everything.

So we're gonna get to that later. But first I want to get to know Todd, Todd Watts. So first of all, where'd you grow up?

Todd Watts

So I grew up in Orange County. Grew up in Fullerton. So I live in Newport Beach now, but grew up in, in Northern Orange County. And have lived all over the place since then. But Orange County College. I went to USC in Los Angeles.

Dr. Grant Stevens

Wait a minute, wait a minute. You're getting ahead of yourself. Fullerton, what high school did you go to?

Todd Watts

Troy High School.

Dr. Grant Stevens

I went to Katella.

Todd Watts

Oh, there you go.

Dr. Grant Stevens

I knew there was a reason we got on so well.

Todd Watts

North Orange County Boys, Fullerton.

Dr. Grant Stevens

Interesting. So you went to Troy then college.

Todd Watts

USC. And then shall I keep going?

Dr. Grant Stevens

Well, what'd you major in?

Todd Watts

Business administration. Undergrad.

Dr. Grant Stevens

And then you went to graduate school?

Todd Watts

I did. I in, I made a stop working in the financial services industry. I worked for a hedge fund of funds called Wilshire Funds Management in Los Angeles.

Then had a really successful stint there. Just timing. I wouldn't give it to credit to myself. And then went to the East Coast and went to Yale for graduate school.

Dr. Grant Stevens

So you're a Yaley graduate. All right. And grad school what, MBA?

Todd Watts

That's right.

Dr. Grant Stevens

Good for you. And then what was your first job after grad school?

Todd Watts

I was a, went into the investment banking industry right in the height of the financial crisis. I remember there was people that had internships and things, and they were pulling those away just because the. The whole industry was imploding. So I was just entering during that time and I went and worked at JP Morgan doing mergers acquisitions in the healthcare and consumer and retail industries.

So I was in the middle and saw a lot and it's, not no exception. And it's a very different, not as, not as much turmoil, but it felt a lot like of some of the things that we have going on right now with banking and other things. And it was a fascinating time, a dynamic time learned a lot and I was there for about three and a half years.

Dr. Grant Stevens

And where were you living when you were working for them?

Todd Watts

New York City.

Dr. Grant Stevens

Okay, so you're right in the thick of it.

Todd Watts

Lived in soho.

Dr. Grant Stevens

What an experience. Oh, is that, and you were in the healthcare portion of it.

Todd Watts

So we, that's right. So one of my clients was one of our bigger clients was Weight Watchers.

We did a lot of digital health and then combined with that, a lot of more consumer facing things, retail, Ralph Lauren. And we were doing things like M&As, IPOs. It was fascinating.

Dr. Grant Stevens

I bet. Wow. Now I understand a lot more about what you're doing now. We'll get to that.

Okay, so there, you're on the East Coast, you're in New York. Were you married at that point?

Todd Watts

No. Met my wife who is from Orange. So you probably like her too. So you got Orange, Anaheim in from Orange.

Dr. Grant Stevens

No, we have to just throw in testing and we got the whole thing lift.

Todd Watts

So I met her in in New York City and she, and we're talking and independent of knowing where she's from and she, we find out that we grew up 15 minutes apart from each other and our parents lived in Orange County. So at that point it was gonna be a marriage of convenience.

Dr. Grant Stevens

A match made in heaven, are you kidding? Or in Orange County.

Todd Watts

That's right. So we lived there together in New York City. And then eventually I ended up leaving New York and came back to to Orange County. And we started a life together from there.

Dr. Grant Stevens

What was your first job when you left as an investment banker and you came to Orange County?

Todd Watts

So I went over, so I worked for a company called Alphaeon.

Dr. Grant Stevens

That's, I was wondering, is that when you went to Alphaeon?

Todd Watts

So we worked we worked at Alphaeon Credit, we're a big part of Evolus, and that was a dynamic experience for me. Outstanding people, executives, I got to meet all kinds of different people of the industry.

Cuz for me, and that's now what, 2012, 2013 when I made that move. And that was really my first, where I jumped head first into the aesthetic industry. Went from finance and, but still a finance, being able to see all of like financial services, but being able to have a purview into the healthcare world. And med device and how things work.

But aesthetics is its own animal, and that's been the interesting part is through this journey. Since then, I've been able to combine a lot of the other, I would say financial services and acumen that I've developed before then. But combining that with the very unique dynamics of the aesthetic industry that I've, that takes a while to learn and understand what really moves the industry.

And the things that are missing and the things that make it different from others. So that was my, my time there, I would say was my like drinking from a fire hose to under understand the aesthetic consumer, the aesthetic provider and what ultimately became more of what is a cash pay doctor, what makes them tick?

Outside of insurance, not your person. You go in the, when you have a, when you have a disease or you're not feeling well, that's cash pay, meaning it's aesthetics, ophthalmology, fertility, all these different. Specialties that have so much in common and starting to look at it like, how can we create business models and things to serve all of them.

Dr. Grant Stevens

Before we go into that, did you work with David Moatazedi?

Todd Watts

Yes, I did. As you did. I didn't overlap directly with him, but he's, he's been a huge, and he's a good friend and he's been a huge asset to, my gosh, for Evolus has been outstanding.

Dr. Grant Stevens

Absolutely. He's done a great job. He's been on the show. He's a dear friend of ours also. And I figure you must have crossed paths with David. So how long were you with Alphaeon and Alphaeon credit?

Todd Watts

We were there five, I wanna say about five years.

Dr. Grant Stevens

Wow. I didn't realize it was that long. So that brings us to where?

Todd Watts

2017. And I, at that point, was thinking about what I wanted to do next. And I had, through my experience with Alphaeon credit, it was just clear to me that, look, CareCredit has been around for a long time. There's not a lot of industries and that's a big industry patient financing where there's been a single dominant player for that long.

When the, anytime you look at situations where there's a monopoly and it's pretty close to a monopoly. Still is. You don't see a lot of, the pace of innovation lags. And I was looking at the new products coming out, clinical products and the pace of innovation and aesthetics.

The people on your show, they come in here, it's like mind boggling. All of the new advancements. And then you look at patient financing, I'm like, this is really the same product as it was 10 years ago, and it's so critical as the engine to make a lot of these med device products be able to commercially excel and be able to have adoption in the marketplace by making things more affordable.

How have we not had a solution that's keeping pace with that level of innovation? And so I started PatientFi with co-founders with my co-founder, Scott Jorgenson. And we created a solution that we thought would be tailor made u utilizing the latest technology. We had amazing banking and credit union relationships to be able to take this a very far away.

And customizing it to the unique workflows of not just aesthetics, but also the broader cash pay. Medical providers and their patients.

Dr. Grant Stevens

That was my next question. You started aesthetics, but didn't you expand to other non aesthetics.

Todd Watts

We did.

Dr. Grant Stevens

But cash pay elective.

Todd Watts

That's right. Such as, so we're in a significant portion of our business. We're still by a large majority. We're still in medical aesthetics and that will always be the case. It's the most dynamic industry. It's the industry that I'm continually be more than the most interested in. I mean, it was, we all know that's why there's so much interest in aesthetics.

But we're now in fertility. We are have a very large presence in dentistry, so we do a lot of mouth restoration. Large cases that can be upwards of $20,000. Everything out of pocket. And we're making inroads into ophthalmology, audiology.

And the beautiful part about it is once we've developed the, call it the chassis of the business technology, as well as our banking relationships and capital partnerships, being able to move between the different segments is pretty seamless. It's not like I need to change a bunch of things to be able to be effective and competitive and ophthalmology.

The plastic surgeon loves the, loves the product. All I really need to do is now change some of the marketing materials to, to be able to enter into something like, Audiology. And that's, that's a beautiful po part of the business cuz the cost of acquisition and acquisition strategies into new markets.

It's just replicating the things we've already spent the resources on building.

Dr. Grant Stevens

So when you say audiology, do you mean hearing?

Todd Watts

That's right.

Dr. Grant Stevens

So I've heard recently that hearing aids are, it's a big business and there's a lot of upgrades from the basic one that maybe the government or your healthcare insurance base, and then you can get the supercharged ones, including even ones that are implanted in our ears, I heard about.

Todd Watts

That's exactly right. And it's the same thing in, there's a great company that's doing something similar in ophthalmology, that helps with that process of, cuz we see the same thing with premium IOLs and a company, engage.

Dr. Grant Stevens

That's interocular lenses. That acronym IOL, he just whipped it right out. For those of you do not have cataracts. Go ahead.

Todd Watts

But companies, like, it's the same thing with the audiology, and that upgrade. And we do that a lot too. And that's where patient financing can be really effective is it's not just a hundred percent cash pay.

Things like where you, where companies like Alcon and other manufacturers that want to push more effective devices like a premium IOL, well part of that will be covered by insurance. Part of that won't be covered by insurance if you want that upgrade. And as I mentioned, companies like Engage are doing an amazing job educating that market.

To be able to upsell that patient, that's better for the patient anyways, and that's where we can be an effective solution as well. And the analogy's the same really between premium IOLs and audiology is hey, you can upgrade to a much more effective product for you. The doctor is able to have upsell it from a sales perspective and you can do that on an affordable monthly payment.

Dr. Grant Stevens

And when you are financing things like this, how long are the financing packages in general? I'm sure they're different ones. What's the shortest and longest?

Todd Watts

So we have the widest range of financing products available in the market. I don't know anybody that has the different options available to them as we do.

So we go as short as three months and we'll go all as far as term length and we'll go all the way up to 72 months. We have cases where we'll even go to 84. The interest rates go as low as 6.99. So if there's a patient with amazing credit, they'll pay 6.99%. And we even have 0% products. And actually, the majority of our business is where the patient isn't paying interest.

The doctor pays a little higher processing fee to offset that, but it's a great tool and a conversion tool for the doctor's staff to say, look, you can pay for this over time. There's no interest and it gives you an affordable way to, to increase your conversion at the practice.

Dr. Grant Stevens

Well, right now, doctors pay credit card processing fees. Does it relate to that?

Todd Watts

Same exact thing. And on on average, some of our fees go as low as 1.9%, so that's below a credit card fee. Some of our fees will go be above a processing fee, if that's, some of our practices are really, some of the biggest med spas in the country do extraordinarily well.

They pay a higher fee, but they're willing to do so by offering a, say a 0%, 24 month interest option, they'll pay for that. But these are sophisticated, many times private equity owned and they're looking at the margin saying, Hey, look, we might, we might be willing to pay a multiple of that fee.

But the closure in the sales, in the margins, it makes it all worth it.

Dr. Grant Stevens

Compensation. Because they push out more product.

Todd Watts

0% over a long term length, the monthly payment goes down and you're still not paying interest. So it's a very compelling way for physicians to close. And now, now you're able to offer products that, what sounds more affordable to you? $3,000, $7,000 or $99 a month. And that's where I think we've gotten all, all of our traction, is not just going to the doctor's practice saying, Hey, use our financing. And it's easier, it's better, it's more friendly for your patient.

It's gonna, your staff's gonna be able to be more effective. Where, where we've really been a big partner for the practices is changing how they quote, Their procedures. Right. Changing how they quote, Hey, upgrade to a premium IOL for as low as $99 a month. Botox for $99 a month breast augmentation for $199 a month.

And really working with the coordinator to change how that is being marketed to patients. And the results are dramatic. And we have all of the data to show. In 2021, we did a comprehensive national campaign with Allergan. And the practices that used patient buy and the rest of the practices had CareCredit.

So it's using our differentiated financing solution. Th those practices grew for the product that was being sold in two times faster. Then the rest of the customers in the industry. So restate that. So the, so the customers, the practices in the United States that were using PatientFi right to market breast augmentation, they sold too much, two times more products.

So they were doing, they were, they were growing two times faster. Then the rest of the country was growing that year with their breast augmentation sales.

Dr. Grant Stevens

Even if the others had CareCredit. Because that leads me to my next question. You sort of started the answer and that is how do you differentiate yourself from CareCredit or the other credit companies?

And you just, that was one right there. You said, if I got this right, the people that use PatientFi, the doctors that did sold twice as many breast augmentation surgeries as the doctors who didn't.

Todd Watts

Grew twice as fast. Their growth over the prior year. Still hugely compelling.

Dr. Grant Stevens

Oh, absolutely. Double your growth. Just by changing the way you finance?

Todd Watts

Changing the way the you finance and changing the way you price, changing the way you quote price, right? Financing is the, is the tool, is the engine. It's the big differentiator is not just us training the staff.

The staff, all they do is just go, Hey, I'm, I work with Dr. Joe and his, the breast augmentation is $7,000. It'll output a custom ad with PatientFi that says, well hun, customized to his price. 1 99 a month or one 70, whatever it is. We make it allum consumer compliant. So this is not something that a doctor should or could ever do on their own.

Right. It's all consumer compliant. And then they can now push out through email digital boards, through interesting companies like Friend Media, right on there in the, in the waiting room to change how patients are seen a different way to, to pay for a procedure.

Dr. Grant Stevens

And that's how we do pay for so many of our services everywhere, which we're gonna get to in a moment. It takes a certain amount of front office and mid-office education though, to change this approach. Do you also provide that education?

Todd Watts

We do. And I would say that my experience and through, it's never a, PatientFi has grown a lot and is, and it's, I wouldn't have thought we would be as far along as we are, but it is not without a lot of pain. And one of the big learning lessons for me personally is, you think you come in with a better solution and it's gonna, the staff's gonna go, oh wow, this is more, it's cheaper for my doctor.

They're gonna make more money. And it just, things set in where you have to remember, you're one of 30 vendors, right? And to think that you're, that they're thinking about patient financing every day, they're not. The staff has got a million things to do. And then, especially after five o'clock when they're gonna check out and go home for the day, at the end of the day, what were we focused on?

And had so many revisions of the product, was how do we make this as simple as possible for the staff? At the end of the day, if it's cheaper, the office admin might care, but the coordinator might not care as much, right? The front office person might not care about as much if it's gonna make the physician more money, where they're gonna care is two things.

It has to be way easier than the alternative products. And then maybe not as much the front office, but the coordinator, it has to help her close more business. And if you can do those two things ,that's where you'll start to just get buy-in from the staff automatically. And so that's where we really focused is trying to force things.

We just said let's let the product do what it does, get them to start using it. And normally when we see a practice start to use PatientFi, even if they were the best CareCredit customer or the whoever, it sticks and we start to see it. And then once that sets in, that can be a customer for life.

Dr. Grant Stevens

This kinda reminds you of what I was hearing from the people at APX in terms of teaching the front office and looking at their profit margins of what procedures bring in the best. And also how to get the front office to change their mindset. Do you ever work with Terri or Izhak at APX?

Todd Watts

We are working on working with them.

Dr. Grant Stevens

Is that right? Because changing behavior and the part of the staff, as you mentioned, has always been one of the biggest challenges we've had. And that is a change in the paradigm to approach a procedure and have a monthly charge, which brings me to subscription. So you've started a subscription program, PRIVI. And you've been doing it for a while now. How is it going?

Todd Watts

No it's been, so just about why we did this. Because look, we've been doing PatientFi. We, I think we've proved, and in a meaningful way, that surgery, now let's just stay in aesthetics. Surgery can be sold much more effectively and you can change the growth paradigm of your practice by marketing one time procedures on a monthly payment.

Think that's been established in a meaningful way nationally. Where we started to get much more interested was, okay, that's great. But what about the fastest growing part of the segment, which is the non-invasive segment. Smaller tickets, so maybe not as comp, it's not $7,000, like how do I pay for this?

But it's a, there's a lot of friction and this is my opinion still in the process. And let me, let me walk you through our thought process of it is pain two times per year is the, is the national average for something like neurotoxin, just less than two times per year coming in and spending $500.

Even I see it with my own around the women I know in, in our community. It's a clunky process, meaning like, you're late, you, you, you, you didn't know that you started getting wrinkles and then by that time it's too late. Now you call your local do physician in Newport Beach, they're booked three months out.

And then you come in and then it's this big payment of $500 or $600. If they're getting a filler, it could be upwards of $2,000. Now the husband, or if it's their, it's a, that's a pretty big financial expense. So we started thinking of this concept of like, wow, there should be like what?

And it's, this isn't, it's frictionless beauty, right? it's being able for people to pay, like they pay for the rest of their lives on a monthly plan. Right to pay for some of these quite expensive annual treatments that come two or three and sometimes more oftentimes per year. And we started, we did some proprietary studies that we sent out into the market to really see.

It logically makes sense that patients would want to pay for their non-invasive toxins and injectables on a monthly payment. And we'd surveyed a bunch of our existing consumers there, cuz we have a thousand, we're already in thousands of practice. We have thousand 50,000 plus patients just from last year.

74% of them said they would be interested in paying for their non-invasive treatments on a monthly subscription. Blew our mind, just as we first started stepping our toe into it. So we looked out into what's available out on the market. And when we went into someone just personally, I went into a doctor's office and they offered me a membership program.

And that membership program was, I had to pay for my treatment that day and I had to pay monthly, like a savings account every month. And it was like a layaway plan for waiting for. My next, my next treatment. And immediately in my mind, interest rates are an all time high. In my mind I'm thinking, Hmm, what interest rate are you gonna give me for using you as a savings account?

And so there's this, that's not a great conversion rate for the patient. And then on the other side of it, you have a different model that the patient can pay monthly. That's what you need. The patient has to pay monthly. And what I mean by that is that first treatment has to be a monthly payment.

Problem is though. Is that if they're just paying monthly and the doctor's not getting paid up front, now you have a conversion problem for the practice. And what I mean by that is the practice, if he's gonna get a thousand dollars today versus a monthly payment to the from the patient that day, that that first treatment, you're gonna have a hard time getting buy-in from the practices.

So there's this pent up demand, the patient saying, get, I want a monthly membership for non-invasive treatments. But there's the two ways that have people have tried to solve this issue and practices have been doing this for a long time. Sure. Through their own things. There, there, there's not buy-in.

So that's where and I can, I'll stop now, but where that's where we using everything we had built with patient, because look, we're a, we we're, the chassis of our business is a payments company, right? We collect monthly payments. We serve, we service the paper for our, our loans. This is what we do.

So what we decided was, wow, we are built to solve this problem. And all, everything the pin, the tip of the spear for us within aesthetics has been to solve this problem where, We can use our underlying bedrock of financing. To give the doctor what they want. Which is they want to be paid up front.

Dr. Grant Stevens

Well, that's key. The doctors are paid at the day of service.

Todd Watts

Correct. Every time. Nothing changes in the accounting, nothing changes in the way that they render services. If there's a commission that needs to be paid for the injector, the cash is within 24 hours, the payments are being being sent in full for that procedure.

Within 24 hours.

Dr. Grant Stevens

And do you as PRIVI, as PatientFi, PRIVI is the subscription, do you then collect the money from the patient over?

Todd Watts

That's exactly right.

Dr. Grant Stevens

So now the doctor doesn't have to chase the patient.

Todd Watts

So the doctor, now you have a, you have buy-in from the physician. And we've seen this where it's almost like a, like they've been waiting for this for so for so long.

And it hasn't been easy. I mean, this has really been a complex solution to develop and we've been working on this for years. Is. Giving the doctor the opportunity to say, Hey, look, here, here is an ex, a membership program, exclusive to my practice. You can come in every year. It's gonna, we can talk about the things that it has done and we've seen it do for the practices that are compelling, but I'm, nothing changes.

For me, the practice, I'm gonna get paid as usual. My injectors are paid. If there's filler, I'm paid up upfront. You add HydraFacial, I'm paid up front. Nothing changes, but they can now offer all of this to the patient on a monthly plan.

Dr. Grant Stevens

So we've been saying doctor a lot. What about the non-physician med spas that that have various other providers, injectors and so forth, who are very competent and they're running their own med spa all over the country. Will you provide this PRIVI? Are you providing it to them?

Todd Watts

Absolutely. it actually where this works in the pla cuz what we've been very penetrated commercially into plastic surgery in the, in the past with PatientFi. This is not for the surgical part of the No, this is for the med spas of the plastic surgeon's practice.

Exactly. It is a med, it is a med spa, non-invasive product. That, and so it is. Right down the middle of the fairway, so to speak, to be able to help with med spas, cosmetic dermatology and just as much as it is for the non-invasive side of the plastic surgeon's practice.

Dr. Grant Stevens

Well, we certainly live in a subscription world. From our health clubs, to our car payments, if you will. Look what happened in BMW, Mercedes, you can't even buy it anymore. That's right. You have to pay a month.

Todd Watts

And you don't know how much it was. All you know is a monthly payment.

Dr. Grant Stevens

That's right. And how about your iPhone? You pay a monthly payment.

There's just so many examples that we all do. It's just in our society, so why not pay for your aesthetic services, your injectables, your fillers, your HydraFacials. And so forth on a monthly budget. Now, what if the person changes their mind and maybe, or the doctor or provider says, I need to give you more of this, or less of it? Does the monthly payment change with time? Can it be changed as you go? Is it dynamic?

Todd Watts

So it's completely dynamic where this is really neat when you combine the financing with the subscription economy is, if I'm midway through, let's just say it as an example, and I'm six months in, okay?

I'm paying monthly as a patient, and I just do, I'm doing you, I previously was doing, let's just say two Botox treatments for five, I'm just gonna make these numbers up for $500 a visit. And let's say I sign you up for a subscription plan, and now you're coming in three times for $500 a visit.

And now I'm, I'm paying, just make these numbers easy. Let's say $79 a month. And I come in halfway through and on that second, second visit, and now I'm, I'm the, in the exclusive membership of Dr. Grant Stevens and I, and the nurse injector says, you know what, you're a great candidate for filler.

Have you thought about doing something like that? And they go, well, geez, how much does that cost? Right? In the old, in the old system, that's, that's can be a pricey price tag. That could be $1,500. It's a huge barrier. Right? A lot of it's the it's so efficacious for so many patients and yet it's, there's a big cost barrier now.

With PRIVI halfway through the nurse injector goes, we should add this to your, to your subscription platform. It's just gonna be a $70 a month extra. What do you think about doing that?

Dr. Grant Stevens

Who calculates that?

Todd Watts

PRIVI does everything.

Dr. Grant Stevens

So the injector suggests the service. And the patient says, how much will it cost? How does that injector know?

Todd Watts

All they do, and this is where the power of everything PatientFi has built to date, and now launching PRIVI is all they're putting in is they'll just put, she goes in or he goes in, as the injector puts in how much it is that they normally charge. Business as usual for a filler.

They can calculate exactly if they're, what are the amount being put in, whether it's toxin flow or anything. It'll calculate the payment. They spit it out, the monthly payments spit out.

Dr. Grant Stevens

Excellent, excellent. Now, is there any limitation? For instance, we've talked about filler, neuromodulators, HydraFacial, lasers, it can cover all those?

Todd Watts

Can cover all of that, and that's the big differentiator of PRIVI is when they come back in for that next visit, if they're doing, let's just say a savings plan or a layaway plan and you wanna add filler and you, that second treatment, you decide to do that, well, you're gonna have to pay for that in full. Or you're gonna say, Hey, I'll do it on the next one and I'm gonna have to save up by paying your practice. Well, that's in the other model with us, there's a, in the other model with, with pit PRIVI, there's a, there's an established line of credit that they can pull on all the time and it's changing their monthly payment.

And they can walk at just imagine as a provider. And that second visit to upsell the patient that they can walk out of there with a filler and all they're gonna pay that day is another $70. It's so sticky.

Dr. Grant Stevens

So the practice gets the money that day?

Todd Watts

Correct. Within 24 hours.

Dr. Grant Stevens

However, the patient then, it's put into their monthly fee.

Todd Watts

It's, and it's a dynamic subscription utilizing financing in our credit union and bank partners. And it's calculated based on when that, how long that treatment's gonna be until they get their next one. So it's totally dynamic. And just like PatientFi, and I think this is the critical point.

We have revised this so many times, getting it to where this can be done so simply by the staff, cuz we knew we wouldn't have buy-in. And that's what I encourage providers to have their staff look at this so they can, it's an easy way for them to maintain their memberships. Something that. We talked about this in the past is and the scheduling and reminders is a big part of the system.

I always blows my mind when I, when when I talk to providers and they walk out of a, when their patients walk out of a, let's say they just got filler and a toxin. Some are better at it, but why don't they schedule their next appointment? Right. Blows my mind. You go to a dentist, you will not get outta that office after you have your cleaning and they'll say, when's your next, let's get your next appointment on the calendar.

Same thing with a haircut. Our thesis is it's really hard to ask somebody, when is your next appointment? When I just wrote a check for or paid $2,000 for a treatment. PRIVI. That totally changes it, right? I'm just coming in and I just paid $99, of course. And now, now the, and the system does all this.

Of course, you're gonna schedule that next treatment. It's not like this big sale. And it, if you can feel the friction of that, if someone had just paid with a credit card. $2,000 to say, Hey, when are you coming back? This is just, it all lays it out.

Dr. Grant Stevens

So it's cheaper on a monthly basis and patients remain therapeutic the whole time. In other words, they don't go wrinkle, non wrinkle, wrinkle, non wrinkle. That's exactly right. Across the whole year, if you will. 12 months. They remain therapeutic.

Todd Watts

And as you know, the majority of patients particularly for injectables aren't as compliant as we want them to be.

And so if you have a situation where the doctor, the three pillars of this that we've seen and it was our value props, and it's beautiful when you see the value props really come to fruition as we've been in the market. The patient's gonna spend more.

Just like an iPhone, they will upgrade to a more expensive iPhone if it's gonna cost them $10 more a month. They'll spend more, they're gonna come in more often. They're gonna come in more often cuz you're setting a treatment regime at the outset of the, Hey, you're gonna come three times per year, or you're gonna here a filler on this day, or you're gonna do a hydrafacial here and you wanna do some body contouring, and let's add that as well.

So they're gonna come more often. They're gonna spend more and they're not just gonna spend more because of the monthly payment of that treatment. You're gonna upsell them, fillers and all these other procedures that otherwise they wouldn't potentially consider two, we call it converting one time transactions into recurring revenue.

And that is, as you start to get these patients coming back, it's not just, and it's exclusive to the practice, it's not just that year. Every year they come back. So if you're a doctor in Dallas and you have competition down the street, I would encourage you, if you're not gonna use ours, build your own membership plan.

Because once they're in your membership plan, it is sticky. And if, and members are proven, if you're, and this isn't our data, it's payments, data. If you remember, they'll spend on average 72% more if you're on a membership than if you're just a one-time customer. So there's that loyalty component of the recurring revenue.

And one thing that I have a pla without naming names, I have a plastic surgeon customer that was going to sell us practice and they've enrolled a lot of PRIVI customers. And this is for more of this is applies as well to med spas is the valuation. And one thing that, and providers will know this, listening to, listening to.

To this as they get to the end of their careers and they built up this huge business that's thriving. And then it's like, what do I do with, and I, especially on the non-invasive side, you get, and I and everyone should know this, get all of your patients on memberships. The valuation of your practice when you go to sell it one day to private equity or what it is, will be two times more, more attractive.

And the value would be two times more because you have a recurring. Membership base coming into your practice that's no longer dependent on, you are candidly less dependent even on the injector. So that's the recurring piece of this that's so critical. And then I'm coming full circle to which you set around pappy patients is the patients you're giving them the way to pay.

Everybody pays for luxury items on a monthly payment. Now they use a firm, all these other new entrants to the market. They want to pay. For these items on it, so they're gonna be happier. And then most importantly is their results will be, be, be, be better. And that was we, we launched with those three tenants and it's just been so nice to see, cuz this has been a lot of work to see them come back and hear feedback that the values being realized by the providers and their patients.

Dr. Grant Stevens

That's fantastic. And I can't understand why anyone wouldn't do this. I mean from a med spa owner to a provider, an injector, the physician, the surgeon. It just seems like it's such a great deal for the patient and the practice. I just can't imagine why someone would not enroll in something like this. I don't see the downside.

Todd Watts

And I, what I love about it is it's, we're coming into this, I think this benefits everybody. And it benefits the patients, the practice, industry. The industries will, industry will sell more neuro injectables because of this. Look one in three you, everyone comes on the show knows these statistics, but one in three US adults are considers of a non-invasive cosmetic procedure.

It's growing so fast, and yet it's, so, as far as the actual commercial revenue coming through the US pop, it's, we're just scratching the surface. Yes, we are. For first time considers for the patients that are 35 to 44, we've done a lot of studies on this that. 70 per 69% of them will spend way more if they're presented a monthly payment plan.

40% of non-patients would actually have converted to a procedure if they had been presented a monthly payment plan. One of the big issues is it's not just affordability, it's, we need to give our aesthetic patients for, to bring in those first time considers in the younger generations a way to pay.

They're used to paying. This is a luxury item. It's expensive. And I think that we have. We haven't cracked the code, but I think that what we're doing is going to be transformative as far as helping the industry move, move further along.

Dr. Grant Stevens

Well, I want to congratulate you. I think you have cracked the code. I think you're being too humble. What you've done with PRIVI is absolutely amazing to me. So listen, we could talk forever.

Todd Watts

I know that, but I'm going to the airport.

Dr. Grant Stevens

I know you are, I've gotta get you to LAX. I want to thank you for coming up here.

And sharing with us all your experiences, teaching us about patient financing and about this wonderful new subscription program that you have.

Todd Watts

Thank you. It's been a lot of fun. And this is always fun to be here. And I love what you're doing on the technology of beauty.

Dr. Grant Stevens

Well, it's great to have you here. Well everybody, I'm sure you learned a lot. I know I did about not just financing, but more importantly the beauty of subscription aesthetic services, and I want to thank Todd and all the people at PatientFi.

Todd Watts

Thanks for hosting.

Dr. Grant Stevens

And we'll see you next week on the Technology of Beauty. Take care.