As market dynamics have changed dramatically in recent years, and supply clearly outweighs demand, it is important to understand the spending habits and limits of your patient population. Staying in sync with the needs and desires of your patients helps to determine what the average sales price is for procedures you offer in your clinic, and how much your patients are really willing (and able) to pay for services.
Offering the right product at the right price allows you to remain competitive. This does not imply ‘discounting’ your services or changing the positioning of your clinic to a high volume, low quality model, but it is reasonable to carefully review your pricing decisions periodically.
Position your practice
It is important to position your practice where you want it to be; either bargain basement, good value for the money, or haute couture. The challenge with opting for the most exclusive positioning is that fewer patients are willing to pay premium prices these days. However, if you choose to go the bargain basement route, it will be very hard, if not impossible, to bring your fees back up to an acceptable level in the future. Competing mainly on price is a losing proposition; there will always be someone who is willing to offer the same or similar service or product for a lower profit.
Consider offering special incentives to enhance value for your clients. In order to do that, you need to have a handle on exactly what each service costs your clinic.
The level of training and experience of a cosmetic practitioner who has been in practice for more than 10 years versus someone who is relatively new to the industry may be substantial. A cosmetic doctor who is new to aesthetics will be more inclined to work on smaller profit margins. Therefore, if you are in the early years of your practice, don’t expect to command the same fees as the more established clinics are getting. In today’s market, review every offering in your practice based on the value proposition to you and your patients. For example, the amount of time you and your staff spend counselling patients and performing procedures should be factored into the overall value equation. Add to that the cost of technology, disposables and marketing required to bring that patient in the door. Therefore, the highest priced procedure may not be the most profitable to your practice. For example, a 5-hour facelift that requires multiple pre- and postoperative visits may actually turn out to be less profitable when compared with a 15-minute filler injection that has a relatively high patient satisfaction rate and minimal complications.
Your goal should not necessarily be to offer the lowest price in your community; rather, to establish a belief among your customers that they are receiving good value from your clinic. The difference between price and value can be huge. Price is just a dollar amount, but value is the relative worth or desirability of a product or service to the end user. The smart approach is to identify your business objectives and target audience, then formulate your tactics, determine the best metrics to measure results, and select key performance indicators to implement. For example, your main key performance indicator may be the number of new patients who come into the clinic on a weekly or monthly basis, or it can be based solely on revenue.