How layers of Outsourcing and Middleman Agencies waste ad budgets and destroy performance for medical aesthetics practices.
When is the last time a medical marketing agency reached out to your aesthetic practice?
My guess is fairly recently.
Many practices I work with have told me they receive almost weekly calls from ad agencies caliming to be experts in medical aesthetic marketing, promising to achieve wild results for their practices.
It’s not uncommon for these agencies to charge monthly fees of $1,500+ to run basic campaigns, have onboarding fees of thousands of dollars, and claim to have achieved stellar results for many clients.
In reality, the expertise they claim to have, and the case studies they provide, are often not their own. In many cases they’ve never even managed a single campaign.
Instead, they hire other (discount) agencies to manage your campaigns, and simply pocket the difference between what you pay them, and what they pay other agencies to do the work.
The Rise of Middleman Agencies
Why is this happening? What caused this proliferation of medical marketing agencies, all claiming that they are experts in the field, and oftentimes charging $1,500 – $2,500 per month to run very basic campaigns?
Over the last 10 years or so, there has been a wave of online courses teaching people (who have no marketing experience) how to start their own marketing agency.
These classes are typically marketed to people who are tired of their everyday jobs.
The ads for these courses are typically filmed in front of expensive cars and in multi-million dollar properties, with a message of something like “you, too, can be a millionare by starting your own agency! It’s easy!”
But instead of teaching people how to deliver long term value to clients, these classes are focused on things like:
- How to find potential clients
- How to negotiate deals and structure contracts
- How to find and hire White Label Agencies to do the work for you
This has created a wave of brand new agencies, that have very little direct experience managing campaigns, but which really, really want to make a lot of money.
They focus on signing up clients, and then simply outsource the work to someone else.
White Label Agencies
The Middleman Agencies cannot exist without the help of White Label Agencies.
White Label Agencies typically don’t serve clients directly, and usually serve only the Middleman Agencies.
They do their work on a wholesale basis:
They charge less to do the work, but make their money on a high volume of accounts (quantity over quality).
The way it works is something like this:
- A Middleman Agency goes out and signs up aesthetic practices as clients
- Once the client is signed up, the work is contracted out to a third party (a White Label Agency)
- This White Label Agency then manages the campaigns (typically by using freelancers)
Claiming the Experience of Others
Many Middleman Agencies have no experience in medical aesthetics marketing whatsoever. But, they are able to claim experience by simply referencing the work of White Label Agencies to which they outsource.
They’ll say things like “our team has generated thousands of leads…” etc., even if they’ve never directly generated any leads themselves.
They’re also neglecting to clarify that the “thousands of leads” were for many different industries, like plumbers, roofers, car mechanics, and other professions completely unrelated to medical aesthetics.
It Gets Even Weirder
In some cases, there is even a third layer: a Discount White Label agency that provides services to other White Label Agencies at rock bottom prices.
Typically, a Discount White Label agency is located in a country where labor costs are low. They are hired by US-based White Label Agencies who are supposed to be doing the work for Middleman Agencies.
Here is the shape this structure takes:
- A middleman agency charges you $1,500 per month
- They keep $1,000, and pay the other $500 to the White Label agency to do the actual work
You’re now effectively paying $1,000 to the Middleman Agency every month simply for being your point of contact. Only $500 of your money is going toward the White Label Agency that is supposed to do the work.
In some cases, the White Label agency will even hire a Discount White Label agency in another country. The Discount White Label agency will get about $250 for the project.
So from that original $1,500 monthly fee, that you paid to the “premier” medical marketing agency, only 16%-33% is used to pay for managing your campaigns.
The True Cost to Your Aesthetics Practice
The use of White Label Agencies costs your practice in multiple ways:
Firstly, you overpay in management fees every month. Instead of paying someone who is truly experienced in the medical aesthetics marketing field, you’re paying multiple layers of agencies that:
- Have little or no experience in aesthetics marketing, and
- Don’t do any actual work to help your practice grow
In some cases 80%+ of your monthly fee is simply wasted in that manner.
But the bigger problem is the waste of your ad budget, because these White Label Agencies:
- Are not motivated to do a good job for you. (They make their money on quantity, not quality.)
- Do not have the nuanced understanding of your target market and the types of patients you are looking to find (because often they are on the other side of the world).
- Don’t have a deep understanding of medical aesthetic marketing.
You end up wasting money on management fees that largely go to middlemen, deploying your budget in inefficient ways, and losing the opportunity to grow your practice.
How to Avoid This
A lot of this can be solved by asking pointed questions during the initial interviews with the agency that is trying to get your business.
It’s pretty easy to suss out these situations with questions like:
- How much experience do you have in medical aesthetics marketing? How many aesthetics practices have you helped?
- Is that specifically your experience or someone else on the team?
- Are these team members your employees? Could I meet them on the next call?
- Does your agency contract out work to third party providers, or do you only use your employees to do the work?
Just keep asking questions until you feel satisfied with the asnwers. If you get ambigous, evasive answers, it’s a good indication that you’re dealing with a Middleman Agency.
However, even if the initial interviews go well, when signing up with a new agency, it’s a good idea to:
- Ask them to add a clause to your contract that guarantees that no work will be outsourced without your permission.
- Ask for the name of the person who will be running the ads and ask for direct access to that person via email. This will help you build a direct relationship with them (it’s important your account manager cares about you as a person).
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