Why a membership built in an afternoon loses money
A membership gets built in an afternoon: pick a monthly fee, add a bonus, throw in a facial, print it. Nobody checks what the facial costs to deliver or how often the member will take it. The margin is not tracked down to the dollar, so the plan that put the best patients on a discount looks like growth until the quarter closes. Price it from the cost list in the unit economics guide first; the fee comes last.
The method, in the order the numbers depend on each other
- The treatments a member will use. Pull the visit history of your two-or-more-visit patients and list what they buy and how often: neurotoxin, tox from here on, filler, facials. Build it on what they do, not on what you wish they did.
- The margin on each. From the cost list: price minus materials by the dose, provider time, room and waste. A thin margin cannot carry a bonus; a wide one can.
- The breakage you should not count on. Model the plan as if every member uses every credit, because the plan has to survive the members who do. Treat what goes unused as money you may owe and a comeback message, not as profit; whether it sits as a liability on the books is your accountant's call.
- The cash timing of a bank. A treatment bank takes money this month for treatment delivered later. That cash is owed; the accounting treatment of prepaid credit is for your accountant to confirm before the first signup.
- The cap on discounts. The bonus or discount cannot exceed the margin of the treatment the member spends it on, after waste. The cap comes from step two, not from another practice's website.
- The churn point. Compare the fee to what the same patients spent per month before they joined; well above it they quit, well below it you discounted visits they already made.
Where each input comes from
| Input | Where it comes from | What happens if you guess |
|---|---|---|
| Treatments used and cadence | Visit history of patients with two or more visits | You price for the facial member and the tox patients join |
| Margin per treatment | Your cost list: invoices, schedule, opened-vial log | The bonus is bigger than the margin and every visit loses |
| Breakage | Members with no visit in the last billing cycle | Unused credit is counted as profit, and the member may ask for it back; what you owe is for counsel and your accountant |
| Cash timing | Your accountant's treatment of prepaid credit | This month's cash is spent and next month's treatment is owed |
| Churn point | Spend per month per patient, before and after joining | The fee lands where the best patients leave |
A worked example, labeled illustrative
Say Jess visits for tox at the interval your records show and adds a facial between visits. In this illustrative example say the contribution margin on a tox visit is $240 and on the facial is $60. Say the treatment-bank tier is $150 a month with a $15 bonus added, and say a tox cycle in your records is three months. Across that illustrative cycle Jess pays $450, holds $495 of credit and spends it on the tox visit and the facial you would have sold anyway. In this illustrative example the bonus costs you $45 against $300 of margin across the cycle, and the plan is safe. Say instead the facial is free each month: $60 of margin gone twelve times a year on top of the bonus, and the tier is underwater for every member who uses it. Replace every figure with your own.
The three membership mistakes that lose money
- Discounting beyond margin. A club price set to beat the practice down the street, with the cost list closed, can fall below what the treatment costs to deliver, and every member visit loses.
- Unlimited plans on a treatment with a material cost. Price them for the heaviest member, because that member will find the floor; frequency limits are your medical director's call. The membership models guide covers when one fits.
- Counting breakage as profit. Credit a member paid for and did not use is money you may owe, and a patient drifting away. How expiry, refunds and auto-renewal must be handled varies by state; confirm the terms with counsel and the accounting treatment of prepaid credit with your accountant.
How to test one tier for ninety days
- Launch one tier only, to existing patients, from their provider by name, on the treatment they already buy.
- Cap the first cohort so one surprise does not become a year of it. Priya tracks every signup in one sheet: fee, credit added, credit spent, treatments taken.
- At thirty, sixty and ninety days read three numbers: visits per member against their cadence before joining, margin per member visit, and cancellations.
- If visits did not move, it is a discount, not a membership; fix the tier before it goes public. If margin per visit fell, the bonus is too big.
What to do next
NorthCore's Bring patients back solution builds the membership engine on your record system: the invite segment and the monthly credit nudge in the provider's voice, for the tier you priced from margin. Scoped in writing and covered by the promise on this site: results in 90 days, or we keep working until you have them.
