Is low price good?

Why dentists don’t raise the prices? The answer is clear: most likely, they are afraid that their regular customers go to competitors, and the influx of new significantly reduced. This fear is completely understandable. Almost all owners of dentistry, we have worked with before, said that they have such fears. However, the very step will ensure the fastest profit growth.

So revise your prices right now.

Why is it so important to raise the price and how it affects your profit? Let's look at this in details.

Suppose that one of your services is worth of $ 1000. You get $ 300 from this sum as owner, and your net profit is 30%. $ 700 is spent on current expenses and supplies: salaries, office rent, telephone calls, and so on. That means everything is already included in $700, and $ 300 isthe money that you put it in your pocket.

Now imagine that you are raising the prices for services by 10%. Cost of services becomes $ 1100. However, the price remains the same consumables, wages stay at the same level. In other words, your cost for this service haven’t changed. So, your profits are not $ 300 but 400. Not a very solid figure? It’s just a $ 100 ... However, transferring it to a percentage, you will see that profit rose to 33%. Raise the price by 10%, you have increased their profits by a third! It should always be in your mind.

I feel you want to ask:

To answer it, let's solve another simple arithmetic example.

You’ve raised prices by 10%, and, for instance, instead of 100 people have only 90 who continues visit you. It would seem that it's time to panic and cut prices by 20-30%, but let's count.

Previously, your profit was:

Now, with providing services at the new price, you get:

Oddly enough, but at higher prices, even if you fell client flow, you earn more. Think also that you've reduced equipment depreciation, it serves you longer. You have more time for better patient care, they become loyal to you and the next time will choose your dentistry.

Although, frankly speaking, the fear of losing customers is absolutely groundless. If low price is the only factor that keeps your patients, maybe it's time to think seriously about the quality of service. If your patient is fully satisfied with the way you treat him, it won’t be a reason to change the clinic because of $100-200, especially since it is not clear how well the doctors in other dentistry. In most cases people do not even notice the difference in price, since 10% of them are not fundamental, especially when it comes to dental services and the credibility of a specific doctor and clinic.

If patients have noticed a change in price, the most important thing is to provide them with a clear and logical explanation why this happened: to raise the rent, pay for utilities, bought new materials and new equipment, your doctors have been expensive training to improve the skills. Patient at any of these explanations will be sufficient.

In the book by Robert Cialdini "Psychology of influence" (by the way, we highly recommend you to read it) described a very interesting experiment: there was photocopying apparatus in a certain organization. People stood in line but some man passed the line out and just began to make copies. In 70% of cases, people react very badly. They began to argue and so on. The next time a man came and said, "Can I jump the queue because I'm in a hurry?" This time 50% of people stay calm. In the next case the man said, "Can I jump the queue, I need a copied paper" without explaining why he was in a hurry. The percentage of users who find this loyally was about the same as in the second case. People mostly "catches" the word "because." So you have to explain to patients why services have become more expensive.

If you are sure that patients will notice increasing prices for your services, you can turn this to your advantage: tell them about it earlier. Send SMS messages, make announcements in dentistry that "Please, note: we raise prices by 10% from December, 1. Hurry to book an appointment at the old prices. " This way you ensure yourself a tight schedule for the remaining time before the price increase. People will rush to take advantage of your services at lower prices.

Do you think that patients perceive such bad news? Don’t worry if you give them a convincing explanation of why you raise prices, people will not feel cheated.

 

Next article: Raising the price of dental services. Economy and VIP-reception.