Had a call last week with a practice that was thinking about raising their prices.
“We’ve tried to stay a few hundred dollars less than our competitors, but we’re thinking about increasing for the first time in a while.”
I had a lot to say about that, and I wanted to share my comments with you.
We could go deep on price and pricing psychology, but I want to keep this brief today.
A few notes:
1. There’s no advantage to being in the middle of the pricing pack.
Renowned business coach Dan Kennedy talks about how “Offering the second-lowest price has no advantages.”
He’s right. Because if someone is price shopping, they are just going to go with the cheapest. Period.
And there are people like that in every market. Some more so in the market for groceries vs. healthcare.
But some people – as ridiculous as it is – price-shop for elective procedures too.
Thing is, they’re not your clientele. Those people don’t make good patients. And you already know this.
So if you’re going to try to compete by being cheaper, you’ve gotta be the cheapest.
(As you probably guess, I don’t recommend this)
2. Higher prices attractive higher quality buyers
You don’t want Cheapy McPricematch in your surgery suite. One way to ensure that doesn’t happen is to charge a premium price.
You’ll attract a higher quality patient who appreciates the value you provide vs. the corners you cut to keep your prices low.
3. Higher prices inherently convey value
If someone said, “Hey, I’ll sell you this brand new Porsche 911 Turbo for $12,000.” Your first question would be something like…
“Sooooo what’s wrong with it?”
Low price isn’t always better. Sometimes it actually draws suspicion.
Something that is expensive must have some special value – otherwise, why would it be priced so high?
The key: you have to be able to communicate that value.
4. High price is a differentiator
“Why do you guys charge so much more than the practice down the street?”
On it’s face, this sounds like an negative comment. Most phone specialists and patient counselors see it as such.
But in reality, it’s a great opportunity for you to agree and explain exactly WHY you are priced where you are.
So you can spend more time with each patient. So you can invest in the best technology. So you can pay your team members well and keep them around for years. So you don’t have to cram your waiting room full of people, with hour-long wait times.
Price is only an issue in the absence of value.
Make sure you can build value in what you offer, and price becomes a peripheral issue.
But before you raise your prices, there’s one thing you *must* doe:
Get your team to buy in to the extreme value you provide. This is actually the hardest part.
Your salespeople will tell you, “We have patients that we don’t convert at our current price. There’s no way we can book folks if we increase our prices by $1,000.”
This is a limiting belief. And that limiting belief needs to be replaced with an empowering belief around the value you bring to the marketplace.
If your team doesn’t BELIEVE in the value you provide… they’ll never be able to convey your new price with conviction.
(And if that’s the case – they aren’t able to convey your current price with conviction either. So you have a problem either way).
When we work with our clients, we spend an inordinate amount of time focusing on beliefs and value.
Tactics are great. But you’re far better off having rock-solid beliefs and minimal tactics vs. a book-full of tactics and a lack of empowering beliefs.
(We help clients with both so they have a 1-2 punch)
The result is that when you visit our clients’ offices, everyone on their teams believe beyond a shadow of a doubt that they are:
A. The best practice in the state
B. Provide the best outcomes
C. Take care of their patients in ways no other practice would
D. They know they are worth EVERY SINGLE PENNY they charge for their procedures.
Get your team to that place, and you can charge what you want.
Like I said, lots more we could talk about pricing, but this should be enough to get your wheels spinning.
Have a great day.
– Troy “Premium Price” Cole