To Discount or Not to Discount?

One of the questions we get asked time and time again with many of our clients, whether in one-on-one consulting, during our onsite or virtual trainings, or on social media, “Terri, should we discount our rates, offer coupons/groupons to get traffic in the door or offer free consultations?

My first response is always to answer those questions with some of my own questions. I ask clients to consider a few factors:

1. What kind of brand image do you want to portray? When we think of brands what are you today and where do you want to be?

Are you Target, Macy's, Nordstrom... Neimans? 

Just be with the integrity of your brand. Put yourself in your client’s shoes. Would you want to have heart surgery done by the surgeon offering a “special”?   What would your perception be about their skill set that he/she feels the need to reduce their prices?  Think about what you want. Do you want patients who are bargain shoppers, or do you want ones who value your skill, expertise, results and impressive credentials?  For some reason, medical aesthetics is the only field where clients feel they can ask for a discount, but that comes from them feeling they will get it or can - that is their perception.

2. What are your operating expenses?  What does it cost you for rent, payroll, marketing, leases, loans, warranties, etc.?

Consider the Risks of Being Known as a “Discount Provider”

Everyone likes to get a good deal and feel they are getting the best service for the best price. However, there are several pitfalls to offering coupons/groupons or discounts:

• There are a plethora of inexperienced providers performing cosmetic procedures. Even if you are more than qualified, you can be lumped into that perceived category and tarnish your reputation.

• Sometimes the product or service you could potentially offer a discount on is not the appropriate service, product or procedure for that individual client and their specific needs.  

• It’s like bypassing a consultation altogether when they “pre-buy” a service and can result in complications or the client being upset if they demand the service they already purchased. You can be setting yourself up for disgruntled patients, bad reviews, disastrous results and broken trust.

• The psychological mindset of patients who purchase online coupons/groupons usually involves searching for the cheapest option. They love the thrill of a bargain. They are not brand loyalists or people concerned about the best quality as a rule. They are not likely going to be a repeat or long-term clients. According to AmSpa’s 2017 Medical Spa State of the Industry Report, an average of 70% of patients are repeat clients so patient retention is critical. Groupons might bring some money in the door initially but don't usually generate repeat business.  So, it’s better to work on cultivating long-term retention with established patients or spend your marketing dollars elsewhere on services such as SEO, blogs, social media, ads, video, etc.

Alternative Options

If you really need to generate business to get people in the door and feel like offering a discount is your quickest option, I encourage you to consider shifting the word discount to “special savings” or “a special offer” if they book a service after a consultation. Or, to re-engage your current patients who might not have been into the office in a long time.  I would rather you add value to a treatment, like a mask or a product--something that adds value, can improve results, and expose them to a new product vs. reducing your profit margin.

Once you get a new patient in the front door, you can use the time to show them the five-star customer experience you provide, as well as use the opportunity to cultivate your “know like and trust factor,” credential yourself as well as your practice, and discuss additional longer-term treatment plans for retention. 

Special pricing can be beneficial to offer during traditionally slower times of the year or if you have a new service offering or perhaps a new provider who has come aboard offering a new area of expertise. You can also bundle your services to offer additional add-ons at a lower price if they book by a certain date. If you offer payment plans or financing, another option is to offer a special savings incentive for “upfront paid in full.”

Fee vs. Free for Consultations 

Charging a fee for consultations (even a nominal one) is important as your time is money and your only non-renewable resource. If price shoppers know they will have to pay a consultation fee, they are less likely to waste your time. Plus, if you collect the consultation fee in advance or a credit card number, you can enforce a policy to charge for “no shows” or “a cancellation fee” if it is within 24 hours or whatever period of time you designate to promote patient responsibility.

To sum it up, charging a fee for consultations does the following:

• Increases viable patients and perception

• Minimizes cancellations and no-shows 

• Respects your time that is valuable

• Results in higher Patient Acquisition Rates

• Results in more quality patients willing to spend more money

We go into more depth on this topic in our comprehensive Mastering the Art of Sales course. To learn more about our APX Platform that includes the sales course and so much more, schedule a discovery call today.