As the new year has begun many of our clients are questioning their normal annual fee increase. It is important to look at how price ties to the value and satisfaction you are giving your patients. We have long felt strongly about sharply discounting fees to close a patient on necessary or elective treatment. A practice must focus on both their productivity and the expenses or cost of delivering treatment, to know if they can reduce a fee for a patient.
We clearly understand, and support, offering periodic discounts to generate interest in a service you provide. Drastically discounting, or desperately pricing, your services is a classic mistake. Unless you take pride in being the cheapest dentist in town, sustaining lowball pricing will erode any profit margin you have, cause other dentists to potentially lower their fees, and allow patients to think they can negotiate the fee on all your procedures. Additionally it will be difficult to raise fees when the economy comes back. Patients today are frugal and most patients have long memories. Many simply won’t pay higher fees without just cause.
So how can we avoid this, how can we price better? The key is to offer value without sacrificing profit. Here are four ways to do this:
1. Offer extra value. Maintain prices but add something to make the promise of a better smile even more attractive. It might be a “glamour” shot if you do photography, adding, at no cost to the patient, whitening when they do a full arch of work, or the electronic toothbrush included with periodontal services. Choose something that does not cost you a lot but has high value for the patient.
2. Use price discrimination Offer different prices based on demand. Consider a discount if the whole family comes in together for hygiene services, or if someone comes in during a hard to fill time or at the last minute they receive a discount. Charge patients an emergency fee for coming in for an emergency appointment. For an excellent patient, show the fee on their statement and adjust it off.
3. Make it Pretty Offer patients a warranty on your work to gain their trust. This can have many positives as it could also ensure patients come in for their hygiene services on schedule. For patients that do not have dental insurance, consider creating your own plan. Bundle services together and offer a discount, charge a higher fee if they split the services up. If a patient does not get x-rays on the schedule you prefer, you most likely take more time examining their mouth, how are you compensated for your time?
4. Discount wisely Maintain your fees on high volume procedures where you have a higher margin and raise the fees where your margins are declining. Lose a little and consider it a marketing expense if you are introducing something new to your patients like the oral cancer screening technology. Offer free consults with x-rays included if you are digital.
The key to success is to preserve the integrity of the services you offer while continuing to serve patients with limited budgets. Be creative, you can find opportunities to add value.