Evaluating and changing pricing for services tends to be a stressful exercise for most doctors. If you’ve ever doubted your methodology for changing your prices, or chuckle at the suggestion that you had a methodology in the first place, then this article is for you.
First off, realize you’re not alone, very few small business owners apply any kind of evidence-based principles to their pricing. The good news is that you are actually one step ahead of these aforementioned business owners in that as a doctor you have actual training in evidence-based medicine. You are trained to think like a researcher when it comes to determining the best clinical care for your patient, now I’ll share the best way to focus those skills on the matter of your pricing.
Start by just focusing on one simple fee, I’ll suggest your contact lens evaluation fees. Please resist the temptation to go-down-the-rabbit-hole on all aspects of your contact lens fee structures; save that for another day. For the moment, see what happens when you make one simple and powerful change in your practice, then let that momentum help launch your next project (whatever that may be).
Next, since you’re going to make an evidence-based decision, you need to gather data. Here is a short 3-step process to collect your data:
Step 1 – Establish a Baseline
Ask your staff to track how many patients balk at a quoted contact lens fee on the phone and at checkout how many patients offer a complaint about the contact lens fee. Compare this to how many calls or checkouts they do that involve contact lenses over a 2-3 week span. I know this seems entirely too subjective of a measurement, however your staff are likely empathetic to your patients and can probably judge price hesitancy very well. Also, we’re most interested in measuring your patient’s thoughts regarding your pricing anyways at this point, so this data makes sense and is actionable.
Step 2 – Make a change in your pricing
No special advice or formula here, simply pick an increase and go with it. You are a researcher—you’re simply introducing a stimulus and then measuring a response.
Step 3 – Measure your results
Follow the same process as you did for step 1 to collect new patient data after making your price change. Did you receive more, the same, or less negative sentiment regarding your contact lens fees?
The idea is that you are now starting to collect data on how your patients value your services, your pricinging is no longer a guess that you’ve made. Simply repeat steps 1-3 until one of two things happen: you see resistance from patients at a certain price level, or, you personally feel uncomfortable about how much your prices have increased.
In either situation, feel free to stop your research and set the price where you feel comfortable. Stopping here, are you possibly leaving profit on the table by not doing a further deep dive on pricing, structures of your fees, etc.? Possibly. But are you better off than where you were a short couple of months ago? Absolutely. And now you have the momentum and added revenue to tackle your next practice project.