7 Ways to Be Strategic About Discounts
February 5, 2019
Offering rash discounts attracts transaction buyers whose focus is price, not value. They’ll happily take your discount, and the next time they have an aesthetic need, they’ll find and choose the lowest price option again – even if it’s not your practice. Transaction buyers aren’t loyal to anything but the lowest price.
Don’t let these patients hold you hostage. The best aesthetic practices build a base of loyal, relationship-focused patients by thinking strategically about how they offer discounts and special pricing. For best results, follow these guidelines.
1. Rethink your terminology.
Word choice impacts mindset. “Discount” sounds like something lesser. I encourage practices to retire that word from their vocabulary and replace it with terms such as special pricing, special offer, complimentary, and limited offer – all of which sound exclusive and none of which sound cheap.
2. Be in the driver’s seat.
Reacting to patients who negotiate during the fee quote conversation puts you at a disadvantage. Instead, be proactive by creating and offering special and limited time offers. That puts your practice in control of the pricing, and able to define the parameters. Extending such offers will decrease the number of patients who ask for discounts after seeing the fee.
3. Always have a business goal.
Offering 20% off without a specific reason makes little business sense and eats away at your margin. Think about what you are trying to accomplish. Is it to pay for a new technology you’ve recently leased or purchased? Fill your block time in a typically slower month? Reward a targeted group of patients who have already spent a certain amount with the practice? Fill Monday and Tuesday afternoon appointment slots in the medspa? The goal can be unique to your practice needs, but there must always be a goal.
One surgeon we work with creates special pricing that targets specific procedures. The pricing is offered during less-busy time periods and is valid only for a short period to encourage scheduling within that time period. Which is a good segue to our next tip.
4. Make the offer time sensitive.
Special pricing must always be time sensitive. That may be an end date for the offer – for instance, this package is available if you schedule surgery August 1 through September 30. Or, it may be valid only for limited number of appointment slots you typically have trouble filling – for example, this special CoolSculpting offer is available on Tuesday and Wednesday afternoons. The key is to use time scarcity as an incentive for getting patients to schedule.
5. Be choosey.
Don’t blast out special offers to the entire email list. Define a targeted group based on your goal. If it’s to pay for a new piece of technology, run a report of all the non-surgical patients who’ve spent $1,000 or more in the last year and offer it only to them. If it’s a facial rejuvenation package, target patients over 50 who have spent a certain lifetime amount with the practice. What you are trying to do in these cases is reward those who have already spent money with you by offering them a reason to come back.
6. Offer a dollar amount off instead of a percentage off.
Which is more effective: $100 off or 15% off? Studies show that most people are terrible at fractions. When you offer “15% off fillers,” they can’t do the math in their heads, which results in a percentage off discount being less effective with most people.
Another reason for percentage off deals is the lack of what’s called an anchor price. Most patients haven’t memorized your fees as well as everyone else’s, and therefore don’t have a preconceived notion about the “best” fee for the service they are considering. Add a math problem like “15% off” of something they aren’t sure of and you just add to the confusion.
7. Package it.
Line item pricing encourages negotiation. Although price transparency can be a positive thing, seeing all of your service fees gives patients an opportunity to zero in on the ones they may think are too high or low, spurring them to ask for a discount. For example, breast augmentation patients may think they can find a bra cheaper at a retail store may take issue with your garment fee. Others may see your surgical fee and say, “wow, that’s a lot.”
You can eliminate this by folding all costs associated with the procedure – pre-operative visits, surgical fees, garments, supplements, products, surgery center fees, everything – into one, packaged price. This strategy allows you to sell the value of the patient not having to worry about the details. Everything is included. This simplifies things for the patient and can make it easier to get him or her to yes.