Thursday 7 March 2013

The top 10 reasons you should put your prices up


The top 10 reasons you should put your prices up

Are you being financially squeezed?

Are you being tempted to cut your fees?

 

If so this article explains why you should put your prices up not down.

The pundits have been telling us for a long time that there is a recession and many businesses, some dentists included, are slashing their prices in response to the fear of losing patients.

Be warned there have been several businesses that have gone bust because slashing prices was their strategy to make sales and it backfired terminally. An example could be Comet, HMV, Jessops etc that ceased trading this winter after offering products at low prices, to lure customers in only to discover the  money they were bringing in could just not cover their expenses.

In this article I am going to be offering ten reasons why you should be considering putting your prices up rather than down in the current economic climate. Controversial, I know. These are only ideas for you to consider and as your coach it is important that I encourage you to consider all perspectives so you can make a truly informed decision about your prices.

 Before I start my caveats are as follows

  • You listen to your patients and provide the treatment outcomes they want in the way they want it delivered, ensuring your work is clinically sound.
  • You review your personal and practice finances monthly and you know your income and expenses in real time.
  • You are drawing a fair and reasonable salary from the business and you pay your staff well.
  • You are monitoring the treatments you provide, patient numbers, treatment plan conversion rates.
  • You are offering high quality dentistry. I am not talking just about fast buck, unsustainable makeovers, all the dentistry you do from a simple occlusal composite, to a full mouth rehabilitation is done with skill, expertise, professionalism and care.
  •  You are and your team are skilled communicators and are able to elicit what your patients ‘wants’ are as well as diagnosing what their ‘needs’ are.
  • You and your team are proud of the treatment you offer and the service you provide.
  • Your surgery is clean, modern, and reflects the high quality of the treatment you provide.
  • Your patients know like and trust you.

 

If all of the above are not true, why not?

The list above vital in any economic climate and even more so when you are facing economic pressure from the economy and your competitors.

Here are the top 10 great reasons why you should increase your fees

  • You’ll make more money, with less treatment.
  • Provide higher quality treatment
  • Patients smell desperation of cheap prices and don’t buy
  • Easier patients.
  • More time for marketing and re-creation.
  • Don’t drive away your ideal clients
  • Minimise your opportunity-cost.
  • Builds your reputation and sets higher expectations.
  • Provide treatment and service you are really proud of.
  • Investment is attractive

  1. Make more money, with less treatment

Are you considering lowering your fees? Before you do stop and consider the impact this will have.

Your patients have been coming to you for a long time because they know like and trust you and if you recommend that they have a certain treatment option they will probably follow your advice. If you drop your fees you have to sell more treatment to achieve the same level of income

 If you charged slightly more than what you charge today, you would have to convert fewer treatment plans, do less  treatment and  still generate  the same or even more income.

Converting one treatment plan is tough for some of you in the current climate, what extra pressure would you be on yourself and staff to convert more treatment plans, by putting your prices down? What is the impact of this on staff morale, sickness levels etc?

Converting treatment plans of higher value will result in you being fresher, and more energised and that will have a positive effect on all your patients you, the treatment you offer and how you relate to your staff during working hours and family at home.

Continue to read on, see, feel and hear how the benefits of increasing fees stack up to give you more work and better outcomes.

  1. Provide higher quality treatment

The phase goes “If you pay peanuts you get monkeys”

Is that really the reputation you want to create for you and your team?

 If you want to provide high quality treatment you must charge a fee that reflects the quality and complexity of the work you are doing.

 Great patients with an interest in the long term health of their mouths and appearance want to be treated by a professional, who acts professionally and charges professionally.

 If your patients are looking for discounts they will go to anyone who is cheap, almost by definition, if they are looking to save on the fees, they’re not really committed to getting a great job done anyway.

Do you want to treat patients who are not interested in having a great job done?

And in the words of John Ruskin 1890

“It's unwise to pay too much, but it's worse to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot — it can't be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better”

You and your patients are worth it!

  1. Patients smell desperation of cheap prices and don’t buy.

Your patients are very intuitive and they read your body language unconsciously

When you reduce your prices, you have to convert more treatments to cover your overheads. This in turn creates more pressure for you to ‘sell’ treatment. When you NEED to convert treatments and must persuade your patients to buy, you start to give of the odour and look of desperation. (You won’t know you are doing it)

Have you ever been greeted by a sales person who is desperate for you to buy from them? Does it entice you to buy?  Of course not desperation and needing to sell is off putting to your patients and they are less likely to agree to treatment.

The dental profession has enough of a reputation problem already with many newspapers ever ready to sell a story of a dentist over-treating to make money. Make it easy for yourself and don’t put yourself in a place of desperation and need.

 

  1. Easier patients

Have you ever noticed that it is your patients that have the most treatment, who are committed to looking after their mouths and smiles are more willing to accept and pay for more treatment? In essence those patients who have the high value treatment plans are more likely to buy more treatment from you, turn up and pay their bills with gratitude than those who have lower value treatment.

For example the wear / erosion patient that is willing to have splint therapy before, a reconstruction, will also be prepared to have a night-time appliance, 3 monthly perio (if needed). Whereas the patients that just want a composite build up that you tell them is going to fail because you are not addressing the underlying problem, will only have make do and mend style treatment.

Similarly the patients that are investing in higher valued treatments are the ones that turn up when asked to do so as opposed to the exempt patients who despite not being in full time employment seem to have the highest FTA rates.

Experience show that those patients who are seeking discounted treatment are hardest to please and are not really after the quality of service you are offering. Moreover these type of patients don’t ever generally convert to the type of patients that buys your more valuable treatment.

You may choose to ask yourself why does Ernest Jones and other high street jewellers have a permanent sale and the likes of Boodles don’t.

Where do you want to position your practice?

Who would you rather spend your time treating?

  1. More time for marketing and recreation

If you are doing less dentistry and charging more money, you will have more time. Use this time to spend on your marketing attracting more of the patients who really want to have the treatment that you offer and taking time off to recharge you batteries.

Before they start working with me many dentists tell me, “I want help with my marketing because I need more clients” and yet their days are filled with treatment weeks ahead and they don’t have time physically or mentally to consider what they want from their marketing.  Marketing requires imagination, objectivity and creativity and you can only do this when you mind is free from clutter and you have time to think.

Increasing your fees will allow you to create the time and space to attract the patients you really want in your practice.

Lowering you prices you will become attractive to those patients who require a lot of your time and energy so you will never find the time to think.


Now is the right time to start the cycle of marketing. Begin marketing to patients who are prepared to pay more for their treatment which earns you more money so you can spend more time marketing to patients that what to spend more for their treatment and so it goes on,

  1. Drive away your ideal clients

As a general rule of thumb it would be true to say that your patients like to mix and spend time with their own type. One of the reasons that zoning appointment books is so valuable, kids come in with all the kids and not when the stressed out business people are in. OAP’s come in together.

When you reduce you fees you will become more attractive to a certain section of society. And that is fine and yet if your practice is primarily filled with patients who are interested in their health and teeth and a certain standard of care, they may be put off returning if your practice seems to becoming filled with patients unlike them.

This can be seen in the supermarkets. The pricing structure of Lidl and Waitrose attract very different buyers. As a general rule of thumb a Lidl shopper would look out of place in waitrose and vice versa ensure that when you set your fees that they are attractive to the patients you want to treat and that you do not inadvertently drive away your ideal clients.

  1. Minimise your opportunity-cost

Taking on low-paying work can be very expensive. If you’re busy working on lots of low value treatment you may be lulled in to a false sense of security as you appointment book will be full for several weeks. As a result you don’t have the space to do any high value treatment.

I have worked with several clients who are financially challenged and want to make more money, until working with me, their appointment books are filled with ‘bitty’ low value treatment. Consequently if an opportunity arises to do treatment such as a root filling, crown, bridge or implant at higher value they could not do it for several weeks and they risked losing the patient to another practice who can fit them in sooner. I have even come across dentists who are too scared to talk to their patients about cosmetic treatment because if they say yes the patients will have to wait for a long time. Has that ever happened to you?

The money you lose by not being able to do more valuable treatment than what you are doing is called "opportunity-cost". By saying “no” to budget jobs, you decrease your opportunity-cost, and increase your potential earnings.

Also consider, if you’re chasing your next patient and treatment plan how are you going to find the time to devote to doing all the listening to what you a high-value prospect patient wants?

You need to build in some time to spend with your patients finding out what they really want from you, and you can only do this by creating financial security by charging higher fees.

This is one of the reasons top end service providers such as hotels, spas, garages, department stores can be much more expensive, overheads to cover the quality of service of a higher value product is more not less.

  1. Builds your reputation and sets higher expectations

Setting your bar high means you have to raise your game. People are amazingly adaptable, and what we’re capable of is so often limited by what we believe we’re capable of. When you choose to be a great dentist and run a fantastic dental practice that’s who you are and what you do. When you set high expectations of yourself, you’ll do better, even if you don’t always meet them!

“The greatest danger for most of us lies not in setting our aim too high, but in setting our aim too low and achieving our mark.”                                                                                              Michelangelo

Your great patients, with interesting and complex dental problems are looking for a great dentist just like you, who has set their bar higher than everyone else, and they realise that they will have to pay for your expertise.

Provide excellent treatment and discounting the fee devalues what you and your staff are offering and ultimately the patient will question the value of what you are actually doing.

  1. Provide treatment and service you are really proud of.

When you reduce your fees, you have to cut corners, use cheaper materials, work more quickly, spend less time talking to your patients, faster turn-around so you ask more of your staff.  This ultimately takes its toll, you will have less pride in what you do, when you are less proud this will come across in your treatment presentations and your patients will be less likely to commit to them.

When you are charging a fair and reasonable fee for your treatment, you will do your best job, you can use better materials, talk to your patients and spend the time with them so that they know that what you are doing is a great quality service at a great price. Your patients will notice that you are doing a great job, they will comment write testimonial letters and refer other patients, and as a result you become proud of what you do and develop great self-esteem. When you come to present subsequent treatment plans your pride and enthusiasm shines through and your patients will want to receive treatment from you.

Cutting you prices in the long term is potentially very destructive to you and your business.

  1. Investment is attractive

By increasing or maintaining your fees when all around you are slashing theirs will ensure that you have funds available to redecorate and invest in the fabric of your building and the equipment in your surgery.

Cutting you fees so you can just keep you head above may be ok in the short term and in the longer term you will not be able to maintain your equipment and building, over time your practice will become tatty and tardy and less attractive to those patients who want high quality dentistry.

Whether we like it or not our patients can only judge our clinical skills by what they see, so as your paint begins to fade they will infer this that your clinical skills are out dated.

I know of a practice not far from me (not a client of mine) who is suffering this precise problem, as a private practitioner they kept their fees low, pared back all their costs to the bare minimum in the mistaken belief that they would be attractive to top end private patients who wanted low fees. Unfortunately (and predictably) the patients didn’t come and now they are in an outdated practice with newer ones opening around them, no funds to invest and losing patients to the new shiny practices.

As Dolly Parton often says “it takes a lot of money to remain attractive”, and that is true of your practices too and you can’t do that unless you collect an appropriate fee.

By now you will see and understand that the instant attractiveness of cutting your fees to attract new patients is likely to leave a long term bitter taste and create more work for you in the future when you will need to revitalise your practice.

I am sure that you now recognise that cutting you fees is potentially the first step along the slippery slope of terminal decline.

“So what do I do?” I hear you cry,

If you are concerned about generating more fees that will protect the financial security of yourself and your practice I can assure you that I have many strategies that I can share with you. Unfortunately there is not one magic strategy and everything you need to know is covered in our programme The Financial Controller which  contains the following modules

  • The numbers that count
  • Simple steps to increase your cash flow today
  • Surviving and thriving in the recession™
  • The profit programme™
  • Wealth wizardry™
  • 5 Steps to financial security and freedom™
  • The money magnet

These can be delivered via 1-2-1 coaching, in-house training or as part of the Institute of Dental Business Ten Steps to Success programme.
 
share your comments below.
 
 

Want to know more call 07989 757 884 or e mail Jane@IODB.co.uk for more information.

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