Scaling With People
Tired of spinning your startup wheels but never gaining traction? Buckle up, founders and CEOs, because this podcast is your rocket fuel to profitability! Every week, we ignite explosive conversations with bold-faced founders, brainy experts, and even a few out-of-this-world vendors. Get ready to crack the code on growth, master employee engagement, and blast through your scaling goals. We’re talking real-world strategies, actionable tips, and perspectives that’ll make your business do a cosmic dance. So, strap in and prepare for lift-off!
Scaling With People
The Membership Model: Growth Strategies and Pitfalls with Dominique Waples
What happens when businesses truly prioritize people over profits? Is it sustainable? Or just idealistic thinking? Dominique Waples, CEO of Restore Medical Spa, dispels the myth that successful scaling requires putting revenue before relationships.
"Customers are people, employees are people, vendors are people. If you don't understand people, you don't understand business." This guiding philosophy has helped Dominique build a thriving multi-location medical spa over 13 years, but not without significant challenges along the way.
The conversation delves into the reality that scaling with a people-first approach is "the long game" – requiring patience, persistence, and significant upfront investment. We explore the post-pandemic reality where employees bring their whole selves to work, and how leaders must balance genuine empathy with business requirements.
Dominique vulnerably shares a cautionary tale about how her wildly popular membership program nearly bankrupted her business due to a critical pricing mistake. Despite an incredible 85% conversion rate, they were losing money on every transaction by restricting benefits to their least profitable service. This led to a powerful realization: "Memberships aren't speedboats; they're cruise ships – seemingly small adjustments can have massive impacts."
For entrepreneurs considering membership models, Dominique offers invaluable guidance on proper pricing (hint: whatever you think you should charge, add 20%), simplifying options (no more than three tiers), and the benefits of creating a negative cash flow cycle where customers fund operations. She also reveals how personality assessment tools transformed her ability to place team members in roles they naturally excel in and enjoy.
Have you considered how a people-first approach might transform your business growth? Share your experiences or questions in the comments and subscribe for more insights on sustainable scaling strategies!
Welcome everyone to today's Scaling with People podcast. I'm Gwendaver Curry, your host and founder and CEO to Guide to HR. So, speaking about HR, have you ever thought about building your business from a people first culture and scaling from that perspective? And have you ever thought about having a membership structure to scale your growth? If these are one or two of the topics you're thinking about, stay with us, because I have Dominique Waples here with us to talk about this. Welcome, dominique, and tell everyone about yourself.
Speaker 2:Well, I'm so happy to be here and thank you for having me. My name is Dominique Waples and I am the CEO of Restore Medical Spa. We're a multi-location practice based in Denver, colorado, and we have been building this incredible business for 13 years and we like to say we are making aging optional through aesthetic and functional medicine.
Speaker 1:I love that and so I can see how you know you're a people service oriented business. But what do you think about when you think about people first, culture and building your business from that perspective?
Speaker 2:Yeah, that's a great question. I always think back to a quote. I believe it was Simon Sinek and I'm going to butcher this, but you'll get the gist. Um, he said you know, customers are people, employees are people, vendors are people. It's just, it's very simple If you don't understand people, you don't understand business, and what that meant to me was people are everything. You know. It's. It's. It's not only the beginning, but the most important thing that we do is we learn how to grow and manage and lift up and train people. So I'm just excited to be here, because this is what I do. This is, I think this is the most important thing I do every day.
Speaker 1:Absolutely it is. People are key and even for some of those listeners who are like, oh, but I sell a SaaS product, Like you know, whatever it's not really it actually is and it's come to light more and more that in your sales function, if you are a SaaS or product delivery instead of services delivery org it's the relationship with you, that your salespeople and your account managers have with your customers that keep them coming back and help you resolve problems before they blow up and you lose that customer, helps you get in and be able to expand that customer. It's all that relationship building which is people.
Speaker 1:So what do you find is the most challenging aspect of scaling your business with a people first culture?
Speaker 2:I would. You know what I would say. The most challenging aspect is, especially when you're starting out, is realizing that scaling with people is the long game. It's not a, it's not like a. You know you snap your fingers or you run that paid ad or you. You know it's like it's so fast. It's not a, it's not like a. You know you snap your fingers or you run that paid ad or you do. You know it's like it's so fast.
Speaker 2:It's not that you have to look out and you have to think, well, okay, I'm, I'm hiring this person and they're great culturally, maybe right, but now I have to train them and it's going to be. I'm going to invest in this person for six months or nine months or a year before we're really going to grow together. You know you have to be willing to make that investment and that is hard and it's hard to understand how important it's going to be and how valuable it's going to be before you've done it and when you're just starting out. So anybody out there who is in that position and is thinking to themselves- gosh, this really is hard.
Speaker 1:Like, just keep at it, I mean it will be worth it. People are always worth it doing something that's going to be better for me, my business, my people, the people around me, the people reporting to me, the people that I partner with, whatever that might look like. And if I'm sitting in hardness, I actually celebrate that because I that means I'm doing something right. If I'm sitting here coasting, then I'm like, hmm, what am I missing? That I'm not challenging myself, right, or those around me. So I love that you just said that, cause that's that's. That is very hard sometimes to very exhausting, I should say to sit in things that are very hard to do and keep pushing and find that motivation to get through it yeah, I, I always say and by the way, I love that like leaning into the hard things is you know, it's hard thing about hard things is they're really tough.
Speaker 2:Um, but people, I mean, I always say there, when people say what's the best part of your business, I say it's the people. People say what's the hardest part of your business, that's you know what, it's the people it is. It's true and it's totally worth it. Yeah, like that's the bottom line there.
Speaker 1:Well, and I think part of the pandemic coming out of that is recognizing that people don't just like put their personal lives and the struggles and their challenges that they have that are non-work related.
Speaker 1:They don't put that at the front of the office door before they walk into the office or the setting that they're working at, right, it comes with them. And to have that empathy of understanding huh, this person is having a hard day might not actually have anything to do with work related, but we're humans and most of us can't be like sorry honey, I'm sorry that the you know my daughters and our daughters in the hospital I have to work today Like that's not gonna happen, hopefully, right, yeah, yeah, so it is. It's challenging, it's finding that I think also do it, but as a business owner, it's finding that balance of being empathetic and human and helping that human through the challenges that they're facing, where they might be less productive today, and yet still being able to produce what you need the business to produce. That when you're so small, that, I think, is the hardest challenge as a founder is is where do you, where do you sit in that empathy? Yet you still know you need to do X, y, z to get farther along and growing your business.
Speaker 2:Have you ever had to?
Speaker 1:deal with that challenge. I absolutely.
Speaker 2:I mean, don't we all?
Speaker 1:I.
Speaker 2:I'll tell you, you know, I used to struggle with it more I, oh gosh. Radical Candor by Kim Scott. I think that book really helped me get my mind right around. You know, just, you have to tell people the truth in a kind way, but you are hurting them if you don't. You know, yeah, in a kind way, but you, you are hurting them if you don't.
Speaker 2:You know, if what you need is for you know, if you need accountability and you need them to produce and that's what you need, like it's really okay to go to that person and say you're so valuable and I love what you produce and I, I just, when you are here and you are on it, you are an incredible part of this team. And also, when you're not here mentally, mentally, and you're not ready to be here emotionally, then actually what's happening is you affect the rest of the team so much that it actually hurts us for you to be here. So what I need is for you. I'm going to let you make this decision right. Are you ready to be here right now or not? Yeah, Right. And so, and maybe it's just we're saying like, hey, listen, take the day, Okay, take a couple of days, Okay. And when you're ready to come back, come back, but come back all the way, not part of the way, Cause I need you.
Speaker 1:Exactly, yeah, and you know if you're able to depending on the situation, you know maybe find an interim or a contractor or someone to come in and support the business. If it's a little bit longer, maybe they need three weeks or four weeks, right, and that doesn't sound like a lot of time in the scheme of life, but for a startup that's like years right, that's incredibly challenging, yeah yeah, exactly.
Speaker 1:So let's flip the script a little bit and I'd love to ask you, as you've been building your business, you've been over a decade. Congratulations on that. Obviously, as we all know, we all have lots of lessons learned so we can share. But tell me a lesson learned that you'd love to share with the audience today. If you could go back to your younger self as you're building this business up, where you could say don't go down that rabbit hole, or hey, you should actually make this decision earlier on, or whatever that might be, I'd love to hear from you about a lesson learned.
Speaker 2:Gosh, I, you know, I I can honestly say every day I learn lessons. I mean, I probably learned three lessons this morning.
Speaker 1:That's a good sign that you're still growing as a human being, right.
Speaker 2:It never. It never stops. I don't think that ever stops, but I want to share. When we talked about this a moment earlier, one specific lesson popped into my head and I wanted to share this one because, as we were going to talk about membership a little bit later today, it does. It is a membership lesson, Okay.
Speaker 1:Okay.
Speaker 2:And the bottom line of this lesson is sometimes very successful programs can nonetheless hurt the business. Okay, so there, there's our lesson, all right? So after we'd been in business three or four years, I I got really tired of the cash flow cycle. Our business is kind of it's very seasonal, I got you know, what I discovered is that basically every summer we ended up in this cash crunch and then we were riding high and we were flush in November and, you know, january was kind of down right, and then spring was great, and then summer. Every year, january was kind of down Right and then spring was great, and then summer every year we just got crushed and there's a we could go into financial, you know. I mean, there were a lot of reasons, right, but I decided I need to do something to get that figured out because I did not want to be stressing every July.
Speaker 2:So, and memberships are something that was starting to become popular in the medical spa world but still relatively uncommon. So I went around, I kind of secret shopped, you know, and I learned how people were doing it and we set up our first membership program. And the way we set it up was we had what we called it was a Botox club membership and people paid a certain amount per unit and they had a bank and they could only spend it on Botox, okay, and I priced it in a way that I'm like, okay, here we're pricing it, people will become members, they'll buy other things, this will be wonderful. Well, what ended up happening is we launched this thing and it was wildly successful. People I mean everybody that came in we were probably converting 85% of the people that came in. It was so easy to sell. I mean it was just, it was unbelievable.
Speaker 1:I was, like you, under priced it.
Speaker 2:It is that why you just saw my thunder. I'm sorry. Oh my god, I was so excited. I was so excited, right. I was like god, this is it, I've hit it, I've figured it out right. And I couldn't figure out why, like every month, I would get the financials back and we still weren't making money. And in fact, we were going further and further into the bread every month, every month, and I finally I realized that we I had created a membership program where, where we were literally losing money on every single Botox treatment that came in the door. Wow, we were literally paying people to come in and get their treatment. And I will tell you, I mean, we were this close to going out of business. Wow, and I own that lesson, and right, like, it was wildly popular, it was terribly priced. We were losing money.
Speaker 2:And I learned something else really important about membership, and that's this membership. It's not a speedboat, it's like a cruise ship. You make these changes. They seem small and, oh my god, if you run into the coastline, you've just destroyed a town like, like, and maybe that's your business, right? I mean, they are, they are, they are just, they're these huge, they're incredibly powerful and you have to be so careful about every choice you make. So I love membership. I'm on team membership but, yeah, they all have. Be careful how you price them, yeah.
Speaker 1:Yeah, I had a really wise sales friend of mine who, when I started my business a few years ago, who basically said you know you're paying. You know you're charging the right thing If you don't have too much work, but you do have some work, so you have too much, you've under priced yourself, you don't have anything, you've overpriced yourself, you don't have anything, you've overpriced yourself and you really have to figure out where's that sweet spot of charging the right amount where you have enough work or memberships, customers, but it's not overloading you to the point of like even, or even if that wasn't successful and you were in the green but you had that much activity, it's your sign that you could probably charge five, $10 more and get more money into your bank account. I'm really sorry that that's a tough lesson and I'm glad to hear that you were able to figure it out and course correct and not go bankrupt like other companies out there have in the past. How did you course correct? Like okay, so okay, look at the financials.
Speaker 1:You have that aha moment now what was your next step in figuring out okay, you gotta course correct this and get your business back on track before it's gone. What, what, what did that look like for you?
Speaker 2:well, the first thing we did is we changed our memberships, right, I mean that that in some ways, that was the easy part, because new people coming in didn't know what the existing membership should look like, right, right, so it was actually fairly easy to test other things and what I I mean, honest to God, neurotoxins are the least profitable part of a medical aesthetics business. Okay, interesting, the first thing I did is I realized that, you know, I had this membership bank and I had restricted it to our least profitable service. That was the only thing people could spend it on. So I opened that up. Brilliant, right. It seems so obvious, right, but we opened that up, we made our memberships. They could be used on anything that you buy at Restore and we actually incentivized the purchase of the things that were more profitable. It was very, it was nice, because those were actually things that were really, really great for our patient base. Because I firmly believe you, everybody has to be aligned Right. It has to be something good for the customer, it has to be something good for the business, has to be good for the employee, like that's how you really create a great business. So, yeah, luckily, all three of those things were true and we were able to, you know, shift our shift, our base, just figure out like, okay, these are better, these are going to be more profitable.
Speaker 2:What was more difficult was then changing the terms of the people who had already signed up, and we did have a mechanism for doing that in our contract, like in the membership. That's good, you know. But I and here this is another you know lesson that I got to learn as a young owner just because it's in the contract, like that doesn't. Honestly, that doesn't mean anything. You put it in a contract so that if you end up in court, you're fine, but if you end up anywhere near a courtroom, things have gone terribly wrong, right, yeah, yeah, like the point.
Speaker 2:The goal was to change these memberships and move clients from one to the other, hopefully in a way that they understood they were excited to change with us and grow with us, and just saying, well, I'm sorry, here's the deal, that that's not how you do it, right, I mean it really it's all about. It's all about taking care of those customers and making sure that they feel that what you're doing is fair. I think that's fundamentally. I mean people, people need to feel that they're being treated fairly. So that was. That was more of a challenge.
Speaker 1:Well and in and of itself, because you're a consumer services based business, even if you did everything right, you took one person off and, all of a sudden, social media and you are going to start losing a potential customer base because of social media and bad reviews. From that perspective, yeah.
Speaker 1:Yeah, that's tough. That's tough. So someone's listening and they're thinking about membership, base concept for their sales and to scale and grow their business. What's I mean? Obviously, besides learning from your own lessons learned, what are some of the things they could think about as they start to build that out to grow their business?
Speaker 2:Yeah, well, the number one thing you should be thinking about is the fact that you will create a negative cash flow cycle, which is a beautiful, beautiful thing. So lean into it and figure it out. I mean, that's a big deal. Like we are paid on average 42 days before treatments. Okay, that's awesome. It's a customer funded model. Yeah, that's what membership?
Speaker 1:And that's what SaaS models are too, if you're in the tech product space.
Speaker 2:Right and we're not right. So yeah, you don't even have to be that smart to set up a membership. I'm not that smart Like it's a way for the important things to think about in membership. One, profitability. Unless you know what your gross margin is on your individual services and what your overhead is by service, if you're in the service business, you really have no business messing around in memberships. So figure that out first and then set one up. That's profitable. Whatever you think you should charge, charge.
Speaker 1:You should probably charge 20 more, um and if you're already out there, right, how is there an opportunity for you to even ask your customers hey, I'm, I'm, we're going to be looking at offering this. What is your feeling? If it was X amount, would you buy it, would you?
Speaker 2:not. Yeah, okay, that's it. That's absolutely. Asking customers is important. I generally, when I'm asking customers things, I like to give them options to choose from right. Because if what I say to you is, would you prefer if it was $5 or $7?
Speaker 1:Oh yeah, they're going to say five.
Speaker 2:Well, would you like 20% off or 30% off? Yeah, would you like? You can't. That won't work, you know. Come up with a couple of options and then ask them. You know which thing is more important to them. What are they? Which do they like better, and why? Right, I think that that is super important. I mean, would you like it free? The answer is always going to be yes. Right, I'd be like well, be careful.
Speaker 1:You can't what you pay for.
Speaker 2:So is this reused Botox? I don't know that I want that.
Speaker 2:Not saying that that exists. And then the last thing I would say about membership is and this one is so important, I have seen so many people inadvertently get into a terrible hole with this one but keep it simple. Yes, no more than three options. Um, I've seen what people will do is they'll sort of, you know, they list all of their services and they say there's discounts on all of these things or something. Let's just make it up Right, and they've got the trade name of like 75 different services and you get discounts on all of them. And nobody sometimes people in the industry, don't even know what it is that you just said. You get a discount on Right, like, just just stand back, like, like, zoom out for a second and imagine that it was in another language. Does this look simple or complicated? Right, it is a sas company. Right, they are. They are so good at it's here's, here's one option, here's the basic. Here's a startup enterprise model, right?
Speaker 2:right, yeah and here's the monthly and here's the yearly and that's kind of it and you can scroll down if you want to, but really at the top it's's very simple.
Speaker 1:Yeah.
Speaker 2:And so yeah, keep it simple make it simple for customers. If they can make a don't, they will get analysis paralysis. So you just you want to go with that for them.
Speaker 1:Make it easy. Make it easy to say yes. Well and on the backend, it makes it easier for you and your employees to administer and manage it and you know if you have a new hire coming in. You know the onboarding, the ramp up time for very complicated structure versus a simple structure you're going to get. You're going to get more out of a new hire and your employees if you keep it simple.
Speaker 2:Right, and they will also have less brain damage.
Speaker 1:And then they will like their jobs, and then the people first culture.
Speaker 2:Yeah, I mean it really right yeah, so true, so true.
Speaker 1:Well, as we wrap up here, I can't believe it's coming to time. Uh, my last question to you is any last tippet, thought, trick, tip tool that you'd like to give the audience before we head out for the day?
Speaker 2:Gosh. Let's see as it relates to people first. Okay, here's one. This is one that I just recently picked up, like in the last year or so, and it's been an incredible boon to us and our business in the last year or so, so I'll share this, and it relates to people. We started using a culture index, the personality assessment tool. It is incredible. It has completely changed my ability to accurately assess what what a person, not what they'll be, not what they'll be good at Okay, Because you can be good at things you don't love, but the things that they naturally will love and also be good at which is huge right, like if you come to work every day and you get to be yourself.
Speaker 2:I mean, you will probably love your job.
Speaker 1:Yeah.
Speaker 2:Right and what is it like to be surrounded by people who love their job. So, um, culture index has just been incredible. For that we have an incredible. It's partially the tool, partially the consultant, because, again, it's always about people, right, I'm an incredible consultant. He's amazing, um, his name's adam larkin, if anybody's out there listening, looking for his name's adam larkin.
Speaker 1:So, um, yeah, shout out to culture index yeah, and that one's a good one and there's other ones out there too.
Speaker 1:But, yeah, understanding what drives your people, the motivation, what they love to do, and, um, yeah, I remember talking to one manager. He was like, yeah, this, this one, my one employee, really really wanted to be a manager but she was bad at it, like she just did not get the empathy part at all. And he finally sat down with her and talked to her about like what is, what does she really? What is the driver behind that? And he found out she just wants to continue to get promoted and show career growth and explain to her it doesn't have to be in management. You could actually be a subject matter expertise, become like the person inside of the business for this particular activity, and there was a lot of growth opportunity there. And she flipped and she became one to hit from one of his worst employees to one of his best employees and it was all about finding what was that motivation driver behind her and what would make her satisfied.
Speaker 2:I love that. I mean yeah right seats.
Speaker 1:Exactly. Yeah, that is so true. Well, dominique, thank you so much for your time. This was great, and thank you for being vulnerable and sharing some of those lessons learned.
Speaker 1:Ouch, I'm so sorry, but it sounds like you have recovered, thankfully, and you know, like all of us, we will continue to learn and grow and hopefully, you know we'll we'll be successful in a year, 10 years, 15 years, 20 years, et cetera. So thank you everyone for joining us today. Thank you, dominique and everyone. Have a great day. We'll see you on the next podcast. Great, thank you.
