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
- 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.
- 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!
- 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.
- 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?
- 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,
- 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.
- 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.
- 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.
- 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.
- 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.
