New business model puts dermatology ‘back in the hands of the dermatologist’

Dermatology has yet to conquer the cosmetic corner of the specialty. That’s according to Dr. Leslie S. Baumann, of the Miami-based, Skin Type Solutions, who explains a new franchise model she says will help “put dermatology back in the hands of dermatologists.”

In this interview, Dr. Baumann, who writes the Cosmeceutical Critique column for Skin & Allergy News, explains her new franchise method for selling skin care products in the dermatologist’s office, and why she thinks it will “disrupt” business as usual in the retail skin care marketplace, including for online retailers.

The following is an edited transcript of the interview, which you can hear in its entirety here.

SAN: Welcome, Dr. Baumann. You recently wrote that you were helping to “put dermatology back in the hands of dermatologists.” Can you expand on that?

Dr. Baumann: I find that most patients really don’t buy their products from dermatologists. They buy them from Sephora, CVS, or the department store, but it’s dermatologists who have years of training about skin, and consumers don’t realize that the dermatologist’s office is the natural choice for where to buy their skin care products. I know that in some parts of the country, access to dermatologists is limited. I think that if a person can see a dermatologist, then that should be where they go for products as well, but that’s not happening. I think dermatologists have done a poor job in getting the word out that we’re the complete skin care experts.

SAN: So, you’ve created a business model to help with this. Please explain how it works.

Dr. Baumann: I love the science of skin care ingredients, and I want to prescribe the right skin care products to my patients. I was at the University of Miami for about 15 years. We didn’t have a huge staff, and I went through the whole skin care evaluation process and created the correct regimen myself. The original evaluation regimen took about 45 minutes, and I realized that patients would probably purchase products from me at first, but the next time, they would buy them somewhere else.

So, I streamlined my approach to make it faster and not require a lot of staff. I determined that I needed to divide patients into skin types. I came up with 16 main skin types, based on four issues: oily vs. dry; sensitive vs. resistant; pigmented vs. unpigmented; and whether the skin is wrinkle-prone. This was the basis of my book, “The Skin Type Solution,” which was a New York Times Bestseller. This showed me that consumers really care about skin products.

The biggest challenge was to get my staff to be able to correctly diagnose the skin type. It took me years to develop my questionnaire, and we have done all kinds of clinical trials to validate it. Now my staff can administer that questionnaire on an iPad, and it automatically calculates the skin type.

The next step was figuring out which products work for each skin type, and then presetting regimens. I found the best products from the companies that had the best technology, and then I tested those on different skin types. I might have five or six products from four or five different brands for one skin type.

SAN: And you are confident that mixing products from the different brands and all the different ingredients won’t somehow irritate the patient’s skin?

Dr. Baumann: I have done a lot of research on cosmetic ingredients; that’s really my core competency. One company might have the best sunscreen technology, but that doesn’t mean they have the best retinol technology, yet every brand feels that pressure to have lots of different products. However, because I do the research trials for the companies, I know each one’s best technology. So, I find the best technology and apply it like a Rubik’s Cube to each skin type’s need, so they always get the best product, and then I test the product. I have been testing this method since 2005.

SAN: What about eponymous skin care lines?

Dr. Baumann: When you go private label, you hire a formulator the way you’d hire a personal chef. That person may not be the scientist who invented that technology. When you have a private label, there is no way you can achieve the same results as you can when you are sourcing products from the best scientists in the world. I know who these people are because I do the research trials. I also know the ingredient supply companies who have the basic scientists in the lab, tinkering with the cell cultures and looking at the mitochondria, so I know where those basic ingredients go. Because I have a large following after the sale of my book and my online blog, I can get volume discounts from the companies. I created a store in the office, and each shelf is color-coded by skin type so it’s easy to know what products to buy,

My friend, who franchised Blimpie’s sandwich shops, was in my office one day watching customers take everything off the shelf and purchase all of it, and he convinced me to franchise it.

It’s important to understand why we chose this model. If you are a cosmetics company, you are not allowed to tell doctors how much to charge for the products because it violates antitrust laws. This allows some people to buy products and then dump them cheaply on the Internet. We control that by having the doctors sign an agreement that they will not sell the products online, and if they do, we cut them off.

SAN: How do you ensure that the products in your franchises aren’t elsewhere on the Internet?

Dr. Baumann: The plan is that once we have enough doctors in the program, we will negotiate with the manufacturers to create products that are exclusive to us.

SAN: Is this a revolution?

Dr. Baumann: That’s the point. It’s putting the power back in the hands of the dermatologist because we are the authorities on skin care. We need to be the ones that people get all the best news and products from first. Just imagine a world where a great new skin care technology comes out, and the only place you can get it is from the dermatologists. That’s going to drive so much business into the dermatologist’s office, and will help dermatologists build their general and cosmetic practice. The beauty of my system is that it trains your staff to identify the most appropriate products for each patient, but I have selected those products. I tested this method in six dermatologists’ offices, and we found that the product exchange rate went from about 35% to 3%. So, when your patient has a better outcome, they are more likely to trust you, and more likely to refer friends to you.

SAN: But what if a patient doesn’t have access to a dermatologist and the model for purchasing skin care products does change? It sounds like it will be harder for them to get the skin care they need.

Dr. Baumann: That is a great question. It’s a problem I have to figure out how to solve. Right now we’re considering Skype consults. This is not considered practicing medicine, so you can do it across state lines.

SAN: Do you plan to franchise dermatologists only or would you also sell the franchise rights to medical spas and physicians other than dermatologists?

Dr. Baumann: That’s really against my philosophy. I want to bring skin care back to the dermatologist. Did you know that only 15 percent of dermatologists sell skin care products in their practice? It’s difficult for them to set the system up and buy products from the different companies. My company streamlines that process. Another reason many dermatologists don’t sell products is because of ethical concerns. I believe if you are offering patients the best products for their skin types, products they can’t get somewhere else, and at the best price, then that is ethical. When you’re just selling things to make money by taking advantage of the patient-doctor relationship, then I am absolutely against it.

SAN: Why might a dermatologist turn away from this franchise model?

Dr. Baumann: There is no reason not to do it, because the startup costs are minimal. The only reason they might not want to do it is if they have their own skin care brand. A doctor could still sell his or her own brand, but they wouldn’t be able to have it on the Skin Type Solutions shelves, and that gets complicated. Based on patient surveys I’ve done, people don’t really want private skin care labels. I think they feel very suspicious of them. My system solves that problem by helping consumers realize the doctor isn’t pretending they invented these products. This is a more honest approach, in my opinion. That might be controversial, but that’s how I feel.

SAN: It sounds like the cosmetic manufacturers would favor this if you like their line.

Dr. Baumann: My system favors good technology. So the charlatans who are trying to sell stem cell therapies or peptides that don’t work aren’t going to like my system. My system favors the geniuses in the lab who don’t know how to get their technology out there, and I know a lot of them. We’ll be able to find that technology and then launch it through dermatology practices. This helps the genius underdogs who don’t know what to do with what they’ve discovered.

Dr. Baumann is chief executive officer of the Baumann Cosmetic & Research Institute in the Design District in Miami. She founded the Cosmetic Dermatology Center at the University of Miami in 1997. Dr. Baumann wrote the textbook “Cosmetic Dermatology: Principles and Practice” (McGraw-Hill, New York 2002) , and a book for consumers, “The Skin Type Solution” (New York: Bantam Dell, 2006). She has contributed to the Cosmeceutical Critique column in Skin & Allergy News since January 2001. Her latest book, “Cosmeceuticals and Cosmetic Ingredients,” will be published in November 2014. Dr. Baumann has received funding for clinical grants from Allergan, Aveeno, Avon Products, Evolus, Galderma, GlaxoSmithKline, Kythera, Mary Kay, Medicis Pharmaceuticals, Neutrogena, Philosophy,Topix Pharmaceuticals, and Unilever.

wmcknight@frontlinemedcom.com

On Twitter @whitneymcknight

Dermatology has yet to conquer the cosmetic corner of the specialty. That’s according to Dr. Leslie S. Baumann, of the Miami-based, Skin Type Solutions, who explains a new franchise model she says will help “put dermatology back in the hands of dermatologists.”

In this interview, Dr. Baumann, who writes the Cosmeceutical Critique column for Skin & Allergy News, explains her new franchise method for selling skin care products in the dermatologist’s office, and why she thinks it will “disrupt” business as usual in the retail skin care marketplace, including for online retailers.

The following is an edited transcript of the interview, which you can hear in its entirety here.

SAN: Welcome, Dr. Baumann. You recently wrote that you were helping to “put dermatology back in the hands of dermatologists.” Can you expand on that?

Dr. Baumann: I find that most patients really don’t buy their products from dermatologists. They buy them from Sephora, CVS, or the department store, but it’s dermatologists who have years of training about skin, and consumers don’t realize that the dermatologist’s office is the natural choice for where to buy their skin care products. I know that in some parts of the country, access to dermatologists is limited. I think that if a person can see a dermatologist, then that should be where they go for products as well, but that’s not happening. I think dermatologists have done a poor job in getting the word out that we’re the complete skin care experts.

SAN: So, you’ve created a business model to help with this. Please explain how it works.

Dr. Baumann: I love the science of skin care ingredients, and I want to prescribe the right skin care products to my patients. I was at the University of Miami for about 15 years. We didn’t have a huge staff, and I went through the whole skin care evaluation process and created the correct regimen myself. The original evaluation regimen took about 45 minutes, and I realized that patients would probably purchase products from me at first, but the next time, they would buy them somewhere else.

So, I streamlined my approach to make it faster and not require a lot of staff. I determined that I needed to divide patients into skin types. I came up with 16 main skin types, based on four issues: oily vs. dry; sensitive vs. resistant; pigmented vs. unpigmented; and whether the skin is wrinkle-prone. This was the basis of my book, “The Skin Type Solution,” which was a New York Times Bestseller. This showed me that consumers really care about skin products.

The biggest challenge was to get my staff to be able to correctly diagnose the skin type. It took me years to develop my questionnaire, and we have done all kinds of clinical trials to validate it. Now my staff can administer that questionnaire on an iPad, and it automatically calculates the skin type.

The next step was figuring out which products work for each skin type, and then presetting regimens. I found the best products from the companies that had the best technology, and then I tested those on different skin types. I might have five or six products from four or five different brands for one skin type.

SAN: And you are confident that mixing products from the different brands and all the different ingredients won’t somehow irritate the patient’s skin?

Dr. Baumann: I have done a lot of research on cosmetic ingredients; that’s really my core competency. One company might have the best sunscreen technology, but that doesn’t mean they have the best retinol technology, yet every brand feels that pressure to have lots of different products. However, because I do the research trials for the companies, I know each one’s best technology. So, I find the best technology and apply it like a Rubik’s Cube to each skin type’s need, so they always get the best product, and then I test the product. I have been testing this method since 2005.

SAN: What about eponymous skin care lines?

Dr. Baumann: When you go private label, you hire a formulator the way you’d hire a personal chef. That person may not be the scientist who invented that technology. When you have a private label, there is no way you can achieve the same results as you can when you are sourcing products from the best scientists in the world. I know who these people are because I do the research trials. I also know the ingredient supply companies who have the basic scientists in the lab, tinkering with the cell cultures and looking at the mitochondria, so I know where those basic ingredients go. Because I have a large following after the sale of my book and my online blog, I can get volume discounts from the companies. I created a store in the office, and each shelf is color-coded by skin type so it’s easy to know what products to buy,

My friend, who franchised Blimpie’s sandwich shops, was in my office one day watching customers take everything off the shelf and purchase all of it, and he convinced me to franchise it.

It’s important to understand why we chose this model. If you are a cosmetics company, you are not allowed to tell doctors how much to charge for the products because it violates antitrust laws. This allows some people to buy products and then dump them cheaply on the Internet. We control that by having the doctors sign an agreement that they will not sell the products online, and if they do, we cut them off.

SAN: How do you ensure that the products in your franchises aren’t elsewhere on the Internet?

Dr. Baumann: The plan is that once we have enough doctors in the program, we will negotiate with the manufacturers to create products that are exclusive to us.

SAN: Is this a revolution?

Dr. Baumann: That’s the point. It’s putting the power back in the hands of the dermatologist because we are the authorities on skin care. We need to be the ones that people get all the best news and products from first. Just imagine a world where a great new skin care technology comes out, and the only place you can get it is from the dermatologists. That’s going to drive so much business into the dermatologist’s office, and will help dermatologists build their general and cosmetic practice. The beauty of my system is that it trains your staff to identify the most appropriate products for each patient, but I have selected those products. I tested this method in six dermatologists’ offices, and we found that the product exchange rate went from about 35% to 3%. So, when your patient has a better outcome, they are more likely to trust you, and more likely to refer friends to you.

SAN: But what if a patient doesn’t have access to a dermatologist and the model for purchasing skin care products does change? It sounds like it will be harder for them to get the skin care they need.

Dr. Baumann: That is a great question. It’s a problem I have to figure out how to solve. Right now we’re considering Skype consults. This is not considered practicing medicine, so you can do it across state lines.

SAN: Do you plan to franchise dermatologists only or would you also sell the franchise rights to medical spas and physicians other than dermatologists?

Dr. Baumann: That’s really against my philosophy. I want to bring skin care back to the dermatologist. Did you know that only 15 percent of dermatologists sell skin care products in their practice? It’s difficult for them to set the system up and buy products from the different companies. My company streamlines that process. Another reason many dermatologists don’t sell products is because of ethical concerns. I believe if you are offering patients the best products for their skin types, products they can’t get somewhere else, and at the best price, then that is ethical. When you’re just selling things to make money by taking advantage of the patient-doctor relationship, then I am absolutely against it.

SAN: Why might a dermatologist turn away from this franchise model?

Dr. Baumann: There is no reason not to do it, because the startup costs are minimal. The only reason they might not want to do it is if they have their own skin care brand. A doctor could still sell his or her own brand, but they wouldn’t be able to have it on the Skin Type Solutions shelves, and that gets complicated. Based on patient surveys I’ve done, people don’t really want private skin care labels. I think they feel very suspicious of them. My system solves that problem by helping consumers realize the doctor isn’t pretending they invented these products. This is a more honest approach, in my opinion. That might be controversial, but that’s how I feel.

SAN: It sounds like the cosmetic manufacturers would favor this if you like their line.

Dr. Baumann: My system favors good technology. So the charlatans who are trying to sell stem cell therapies or peptides that don’t work aren’t going to like my system. My system favors the geniuses in the lab who don’t know how to get their technology out there, and I know a lot of them. We’ll be able to find that technology and then launch it through dermatology practices. This helps the genius underdogs who don’t know what to do with what they’ve discovered.

Dr. Baumann is chief executive officer of the Baumann Cosmetic & Research Institute in the Design District in Miami. She founded the Cosmetic Dermatology Center at the University of Miami in 1997. Dr. Baumann wrote the textbook “Cosmetic Dermatology: Principles and Practice” (McGraw-Hill, New York 2002) , and a book for consumers, “The Skin Type Solution” (New York: Bantam Dell, 2006). She has contributed to the Cosmeceutical Critique column in Skin & Allergy News since January 2001. Her latest book, “Cosmeceuticals and Cosmetic Ingredients,” will be published in November 2014. Dr. Baumann has received funding for clinical grants from Allergan, Aveeno, Avon Products, Evolus, Galderma, GlaxoSmithKline, Kythera, Mary Kay, Medicis Pharmaceuticals, Neutrogena, Philosophy,Topix Pharmaceuticals, and Unilever.

wmcknight@frontlinemedcom.com

On Twitter @whitneymcknight

Dermatology has yet to conquer the cosmetic corner of the specialty. That’s according to Dr. Leslie S. Baumann, of the Miami-based, Skin Type Solutions, who explains a new franchise model she says will help “put dermatology back in the hands of dermatologists.”

In this interview, Dr. Baumann, who writes the Cosmeceutical Critique column for Skin & Allergy News, explains her new franchise method for selling skin care products in the dermatologist’s office, and why she thinks it will “disrupt” business as usual in the retail skin care marketplace, including for online retailers.

The following is an edited transcript of the interview, which you can hear in its entirety here.

SAN: Welcome, Dr. Baumann. You recently wrote that you were helping to “put dermatology back in the hands of dermatologists.” Can you expand on that?

Dr. Baumann: I find that most patients really don’t buy their products from dermatologists. They buy them from Sephora, CVS, or the department store, but it’s dermatologists who have years of training about skin, and consumers don’t realize that the dermatologist’s office is the natural choice for where to buy their skin care products. I know that in some parts of the country, access to dermatologists is limited. I think that if a person can see a dermatologist, then that should be where they go for products as well, but that’s not happening. I think dermatologists have done a poor job in getting the word out that we’re the complete skin care experts.

SAN: So, you’ve created a business model to help with this. Please explain how it works.

Dr. Baumann: I love the science of skin care ingredients, and I want to prescribe the right skin care products to my patients. I was at the University of Miami for about 15 years. We didn’t have a huge staff, and I went through the whole skin care evaluation process and created the correct regimen myself. The original evaluation regimen took about 45 minutes, and I realized that patients would probably purchase products from me at first, but the next time, they would buy them somewhere else.

So, I streamlined my approach to make it faster and not require a lot of staff. I determined that I needed to divide patients into skin types. I came up with 16 main skin types, based on four issues: oily vs. dry; sensitive vs. resistant; pigmented vs. unpigmented; and whether the skin is wrinkle-prone. This was the basis of my book, “The Skin Type Solution,” which was a New York Times Bestseller. This showed me that consumers really care about skin products.

The biggest challenge was to get my staff to be able to correctly diagnose the skin type. It took me years to develop my questionnaire, and we have done all kinds of clinical trials to validate it. Now my staff can administer that questionnaire on an iPad, and it automatically calculates the skin type.

The next step was figuring out which products work for each skin type, and then presetting regimens. I found the best products from the companies that had the best technology, and then I tested those on different skin types. I might have five or six products from four or five different brands for one skin type.

SAN: And you are confident that mixing products from the different brands and all the different ingredients won’t somehow irritate the patient’s skin?

Dr. Baumann: I have done a lot of research on cosmetic ingredients; that’s really my core competency. One company might have the best sunscreen technology, but that doesn’t mean they have the best retinol technology, yet every brand feels that pressure to have lots of different products. However, because I do the research trials for the companies, I know each one’s best technology. So, I find the best technology and apply it like a Rubik’s Cube to each skin type’s need, so they always get the best product, and then I test the product. I have been testing this method since 2005.

SAN: What about eponymous skin care lines?

Dr. Baumann: When you go private label, you hire a formulator the way you’d hire a personal chef. That person may not be the scientist who invented that technology. When you have a private label, there is no way you can achieve the same results as you can when you are sourcing products from the best scientists in the world. I know who these people are because I do the research trials. I also know the ingredient supply companies who have the basic scientists in the lab, tinkering with the cell cultures and looking at the mitochondria, so I know where those basic ingredients go. Because I have a large following after the sale of my book and my online blog, I can get volume discounts from the companies. I created a store in the office, and each shelf is color-coded by skin type so it’s easy to know what products to buy,

My friend, who franchised Blimpie’s sandwich shops, was in my office one day watching customers take everything off the shelf and purchase all of it, and he convinced me to franchise it.

It’s important to understand why we chose this model. If you are a cosmetics company, you are not allowed to tell doctors how much to charge for the products because it violates antitrust laws. This allows some people to buy products and then dump them cheaply on the Internet. We control that by having the doctors sign an agreement that they will not sell the products online, and if they do, we cut them off.

SAN: How do you ensure that the products in your franchises aren’t elsewhere on the Internet?

Dr. Baumann: The plan is that once we have enough doctors in the program, we will negotiate with the manufacturers to create products that are exclusive to us.

SAN: Is this a revolution?

Dr. Baumann: That’s the point. It’s putting the power back in the hands of the dermatologist because we are the authorities on skin care. We need to be the ones that people get all the best news and products from first. Just imagine a world where a great new skin care technology comes out, and the only place you can get it is from the dermatologists. That’s going to drive so much business into the dermatologist’s office, and will help dermatologists build their general and cosmetic practice. The beauty of my system is that it trains your staff to identify the most appropriate products for each patient, but I have selected those products. I tested this method in six dermatologists’ offices, and we found that the product exchange rate went from about 35% to 3%. So, when your patient has a better outcome, they are more likely to trust you, and more likely to refer friends to you.

SAN: But what if a patient doesn’t have access to a dermatologist and the model for purchasing skin care products does change? It sounds like it will be harder for them to get the skin care they need.

Dr. Baumann: That is a great question. It’s a problem I have to figure out how to solve. Right now we’re considering Skype consults. This is not considered practicing medicine, so you can do it across state lines.

SAN: Do you plan to franchise dermatologists only or would you also sell the franchise rights to medical spas and physicians other than dermatologists?

Dr. Baumann: That’s really against my philosophy. I want to bring skin care back to the dermatologist. Did you know that only 15 percent of dermatologists sell skin care products in their practice? It’s difficult for them to set the system up and buy products from the different companies. My company streamlines that process. Another reason many dermatologists don’t sell products is because of ethical concerns. I believe if you are offering patients the best products for their skin types, products they can’t get somewhere else, and at the best price, then that is ethical. When you’re just selling things to make money by taking advantage of the patient-doctor relationship, then I am absolutely against it.

SAN: Why might a dermatologist turn away from this franchise model?

Dr. Baumann: There is no reason not to do it, because the startup costs are minimal. The only reason they might not want to do it is if they have their own skin care brand. A doctor could still sell his or her own brand, but they wouldn’t be able to have it on the Skin Type Solutions shelves, and that gets complicated. Based on patient surveys I’ve done, people don’t really want private skin care labels. I think they feel very suspicious of them. My system solves that problem by helping consumers realize the doctor isn’t pretending they invented these products. This is a more honest approach, in my opinion. That might be controversial, but that’s how I feel.

SAN: It sounds like the cosmetic manufacturers would favor this if you like their line.

Dr. Baumann: My system favors good technology. So the charlatans who are trying to sell stem cell therapies or peptides that don’t work aren’t going to like my system. My system favors the geniuses in the lab who don’t know how to get their technology out there, and I know a lot of them. We’ll be able to find that technology and then launch it through dermatology practices. This helps the genius underdogs who don’t know what to do with what they’ve discovered.

Dr. Baumann is chief executive officer of the Baumann Cosmetic & Research Institute in the Design District in Miami. She founded the Cosmetic Dermatology Center at the University of Miami in 1997. Dr. Baumann wrote the textbook “Cosmetic Dermatology: Principles and Practice” (McGraw-Hill, New York 2002) , and a book for consumers, “The Skin Type Solution” (New York: Bantam Dell, 2006). She has contributed to the Cosmeceutical Critique column in Skin & Allergy News since January 2001. Her latest book, “Cosmeceuticals and Cosmetic Ingredients,” will be published in November 2014. Dr. Baumann has received funding for clinical grants from Allergan, Aveeno, Avon Products, Evolus, Galderma, GlaxoSmithKline, Kythera, Mary Kay, Medicis Pharmaceuticals, Neutrogena, Philosophy,Topix Pharmaceuticals, and Unilever.

wmcknight@frontlinemedcom.com

On Twitter @whitneymcknight