Interested in getting out of — or staying out of — the price war business? Drew Leahy, director of marketing and business development, Incredible Marketing, Irvine, Calif. offers the following 11 tips.
1. Reduce non-traditional costs
First, focus on differentiating your practice’s products and services by looking at the intangibles, like improving patient experience and customer service and cutting non-traditional costs to the patient. Non-traditional costs include anything that costs your patients’ time or convenience. If you can reduce non-traditional costs, you can increase your perceived value without spending money or cutting profits.
2. Improve patient experience
Your competitors can mimic your service offerings, but they can’t mimic the way you offer your service. Implement a procedure for measuring and improving your patient experience by asking your patients what they need. Then, fulfill those needs.
3. Identify Problems, Offer Solutions
Take a content marketing approach to your digital marketing and create educational content that helps patients solve problems they never knew existed, and set them on a path to discovering a solution. This not only generates demand for your services, but it establishes your practice as the anchor by which patients will measure and compare value moving forward. The more value you can create with content, the harder it is for patients to find comparable competitors — even if you have the same prices.
NEXT: 4. Stop the Spam
4. Stop the Spam
Stop using your email to spam your patients with discounts and special offers, and instead, use it to deepen relationships with your existing patients by sending them something valuable each week. Discount after discount not only serves to further commoditize your service, but it looks desperate, too.
5. Create Loyalty Programs
Use loyalty programs to reward repeat customers and insulate yourself from price wars. The more incentive your existing patients have to return, the less likely they’ll go elsewhere for price.
6. Compensate on Profit Not Sales
Compensate your front desk staff based on profit margin, not sales revenue, so that they have incentive to charge full price.
7. Fire Unprofitable Patients
Don’t be afraid to fire unprofitable patients. You may reduce your market share, but you’ll maintain your profitability. The more you compete on price, the more volume you’ll need to compensate for reduced margins.
8. Narrow Your Approach
Take a more narrow approach to your strategic position and target underserved customer segments, so you don’t need to rely on volume to make up for low margins.
9. Purchase Technology Strategically
Purchase technology that fits with your practice. Every doctor should know how a new device or technology will fit in with his or her strategic position and how they’ll market it before they purchase it. Buying or leasing a technology only to realize that it’s meant for a customer segment they’re not fit to serve, puts practice in a position where they almost have to engage in price wars.
10. Manipulate Price? Maintain Profitability
Don’t consider price at the expense of value. Aesthetic physicians have to take price into consideration. The trick is to not let price misguide you. When patients demand lower prices or when competitors drop prices, the first question you should ask yourself is whether or not you need to increase value — not whether or not you need to reduce prices. When considering pricing, it’s paramount that you understand the profit margins of each product and service, which customer segments are most profitable, and where you can make adjustments to your business to reduce costs. Only then can you thoughtfully manipulate price while maintaining profitability.
11. Curb Commoditization
Last, stop treating your services or products like commodities and so will your patients.