One of the reasons I’ve built a worldview that includes price transparency1 is because I recognized early on that everyone wants to know cost ahead of time. So why make it difficult for them? No one likes sticker shock. But there’s another benefit of price transparency.
By knowing the cost ahead of time, the patient hopefully will feel less of an urge to ask for a discount or a special. However, as we all know, it doesn’t always work out that way. In this Amazon world, discounts and specials are a way of life. If left unchecked, discounting and specials can lead to a race to the bottom, where everyone is undercutting their competitors. This potentially leads to cheapening of a brand.
Bargaining, an even more insidious cousin of discounting and promotions, takes things a bit too far. Of the two, discounting is the lesser evil. If we embrace discounts and promotions in certain circumstances using certain techniques, we can “build a fence” around the potential for bargaining.
Use discounts and specials the “right” way
Having a set program or programs to allow for discounting can be an effective way to draw in patients without cheapening the brand.
In our practice, we offer discounts and specials in three different formats. While they all provide a discount to the patient, there’s an equally important benefit to the practice, in addition to greater patient volume.
Online purchases. On our website,2 we allow patients to purchase non-surgical services (neuromodulators and fillers) and skincare products online. When these purchases are made online, a nominal discount is included.
Even before we realized the benefits of contactless payments during the pandemic, online purchasing is just plain more convenient—for the patient and the practice. Consider a patient that purchases skincare online. Tax, shipping, and a discount are already included. This saves the patient from having to come in unnecessarily. It also encourages the patient to continue taking the path of least resistance. Why seek out another practice when the patient can get the products (or prescription creams) they want delivered to their door with just a few clicks!
For injectables like Botox or fillers, the patient still needs to come in for treatment. But similar to buying a movie ticket online, there’s no need to stop at the front desk/ticket booth to make a payment. The transaction already occurred online. More importantly, there’s the added benefit of privacy for patients who don’t have to check out on the way out the door.
On an equally practical note, how do practices that run specials keep up with all of the deals swirling around all the time? Have you ever sent out or received an email from an aesthetic physician’s office? There’s a ton of specials listed! How does the front office staff track the current specials and not accidentally discount the wrong item for the wrong amount? With online-only discounts, patients always pay the correct amount. In our practice, when a patient purchases online, a voucher is automatically generated that clarifies the amount paid and the amount of product or injectible they’re eligible to redeem.
Some benefits of online purchasing:
- Contactless payments
- Enhanced privacy by avoiding front desk checkout
- Reduces lost revenue from inaccurate discounting.
Subscriptions and Memberships. This specials format includes recurring payments that either cover the entire cost of the service in question (subscriptions) or give the consumer access to additional discounts in the future (memberships).
For subscriptions, payments are structured so that a monthly payment covers the entire cost of a discounted quarterly treatment, such as Botox. Therefore, when the patient comes in for their treatment every three months, they pay nothing out of pocket. Psychologically, if the patient feels like the treatment cost nothing at the time of the visit, they’re open to purchasing another service, thus leading to greater, unexpected revenue.
Memberships involve lower monthly payments that don’t cover the cost of any service. But they do offer the availability of VIP (discounted) services. Similar to subscriptions, patients may rationalize additional purchases because of the savings.
While a one-time online purchase described above has the benefit of capturing the patient, it doesn’t incur loyalty the way subscriptions and memberships3 do. Recurring payments and repeat traffic are the easiest way to build a long-term patient-doctor relationship.
Subscriptions and memberships offer these benefits:
2. Recurring revenue
3. Increased revenue from the purchase of non-subscription items while in the office.
Day-of-consult discounts. Consider this scenario that takes place in most offices: A patient puts down a deposit for a larger procedure. Two to three weeks prior to the procedure, capturing the balance due is never as easy as one would hope.
Often times, the office staff must go to great lengths to track down the patient to collect those remaining funds. It requires at least one (often multiple), potentially avoidable phone call.
Wouldn’t it be great if the patient would book and pay in full at the time of the consultation? That would have the benefit of less wasted time trying to track down the patient and your office staff wouldn›t feel like bounty hunters! With the right incentive, it’s possible.
At the time the patient schedules the consultation over the phone, we let them know the probable cost of their procedure based on the information they provide regarding their concerns. We let them know that if they come in prepared to pay that amount in full at the time of consultation, they’ll receive a discount ($1,000 for a procedure more than $10,000 or $500 for a procedure less than $10,000).
With a combination of price transparency prior to the consultation and incentivizing with a discount, 72 percent of patients that booked surgery at the time of their consult paid in full,4 including procedures costing $22,000!
Benefits to the practice:
1. Improved cash flow with full payment up front
2. Incentivize only the most serious patients to come in for consultation
3. Avoid wasted time tracking down patients for the balance.
Have a Purpose
Don’t discount without a purpose! By linking discounts and specials to specific goals, other benefits will reveal themselves. These include 1.) improved cash flow, 2.) loyalty, 3.) increased productivity, 4.) no confusion in regards to which specials are being offered and 5.) having enough hard-wired options for discounting that a reasonable patient knows the practice’s disposition on price and never has the opportunity or urge to resort to bargaining.