Exponential Practice GROWTH

Marketing Strategies for Unlimited Expansion

 

  16th September 2014 
Pricing Stupidity 

"or how to lose money faster than you can shake a money losing stick!" 

By: William J. Simmons

 
I just had a few days away in York (which is as beautiful as I remember but somehow a little bit smaller!) and was surprised at the number of examples I found of people randomly reducing their prices and engaging in general cheapness for no apparent reason - other than a desperate attempt to try and seem busy or to reduce overheads / increase sales.

1. The hotel stayed at was on a price comparison site so it was possible to book through six different agents and pat six different prices. I rang the hotel and told them the price I had been quoted online which they said they would honour and they pointed out it didn’t include breakfast. I asked them if they could do the room for the same price with breakfast and after checking the receptionist said yes they could. So with the internet price and breakfast I saved 33% per night.

2. Whilst browsing a shop the assistant asked if they could help to which I replied I was just looking. She then offered me a loyalty card (I’m not sure how I can be a loyal customer when it was my first time in the place) that gave me 10-15% off anything I bought.

3. I ate out at several restaurants using a membership discount card and proceeded to get either 25% off the total bill or BOGOF (Buy One Get One Free).

4. I was looking in a therapist’s window for inspiration and new ideas when the practitioner turned on the lights. He told me that he kept the lights off to save money unless he had clients…

Unbelievable!

All of these places are making life so much harder for themselves than they need to - all in the vain hope of seeing more people and making more money…

…but it just doesn’t work like that!

For a start there is no need to reduce your prices unless you want to attract cheap price buying patients who will disappear as soon as another cheaper therapist sets up in town.

I won’t go into the maths in this article (so you’ll just have to trust me) but on average for every 10% you lower your prices it means a drop in turnover of 37%! Decreasing your fees means having to work a third harder to make up the difference!

There are so many things these places could do differently to make more money and work less - and they really should try implementing them.

For example:

1. Why advertise any discount? I offer a family discount where two or more of the same family attend at the same time - I don’t advertise it and if people get their happy but they’re not expecting it or looking for it!

2. Why not differentiate yourself do you can charge more? I ate across the street from one of these discounting restaurants at a great Nepalese restaurant. Never eaten that type of food before and it was fantastic! Tasted great and was served on these metal plates and in metal carved intricate bowls that made it stand out. It served Nepalese lager which again was different to the usual offerings in most restaurants - and whilst it was brewed in the UK it “appeared” different and unique.

3. Why put yourself in a position where you are only going to attract bargain hunters? I use a card for discounts in restaurants because I have it! I would still eat there if I didn’t have it - and pay full price. Anyone that thinks they can make up for discounting their prices by seeing more people is wrong - you just end up working harder for less… and if you do Groupon / Wowcher / Livingsocial you deserve the cheapskates it attracts!

4. Loyalty cards / bonuses / discounts are for people who are loyal! There are for people who attend regularly and refer others to you - if you give them out to often they lose their value and people just end up thinking you are charging too much initially!

5. Turning the lights off to save money (and making the place appear closed) is just madness! Having an empty clinic where if you do have patients randomly appearing to sit on their own wondering if they are your only patient (so you can’t be any good I’ll go where the other people go…) is stupidity. When I had multiple clinics I had them staffed and open even when I wasn’t there. The receptionist could answer the phone, make appointments, deal with queries and sell things to people that popped in etc. - and they all made money and appointments during these times. People have a herd instinct - they move in crowds - and they like to be where everyone else is… or at least appears to be!

6. Final thought - if you charge more for your services and treatments you give better treatments! This year I put my fees up by over 15% across everything and now because people are paying me a lot I make sure they get tremendous value for it and a damn good treatment! I am focused and everything I do is to get them better! None of this filling in time with a bit of soft tissue time-wasting or day dreaming about tea - I am fully committed to them and it shows with the better results!

For more ideas on pricing strategies check out my kindle book “Raise Your Fees”.

Available from amazon.co.uk here: http://www.amazon.co.uk//dp/B009QPGRC0/
 
or

from amazon.com here http://www.amazon.com/dp/B009QPGRC0/