00:00:04:06 – 00:01:12:00
You’re listening to SHorr Solutions: The Podcast where our expert consulting team steps behind the mic to share some of the strategies and solutions we implement for aesthetic practices nationwide. With decades of combined experience running and coaching aesthetic and medical practices, we bring you the guidance that strengthens operations, elevates profitability, and supports long term growth. This is where solutions begin.
Cristian Devoz
Welcome back to another episode of Shorr Solutions: The Podcast. My name is Cristian Devoz, and I’ll be your host for this episode. I’m one of the partners and a senior client success manager here at Shorr Solutions. And today I’m joined by no one else than our very own Nan Maddox, our senior client success manager. Nan, it’s a pleasure to have you once again in the podcast.
Nan Maddox
Thank you for having me, Cristian.
Cristian Devoz
My pleasure. So then to get started today, we’re going to be talking about when should aesthetic practices raise their prices and when to halt.
Nan Maddox
So basically to hold them and when to fold them.
Cristian Devoz
Right. Right right.
Nan Maddox
It’s a gamble.
00:01:12:00 – 00:02:21:17
Cristian Devoz
Right. So should you hold your prices. So you raise your prices. What should you do. That’s what we’re talking about today. Let’s get into the conversation. And the first question is going to be revenue retention. Can we have one without the other. I mean if I raise my prices now, will I lose patients because of that? Or will the increase of prices now increase my revenue? Right. How do you find that balance, I guess is the first question here.
Nan Maddox
I guess I don’t ever frame the two together because they’re so very interconnected. And I think the key to understanding all of that is the patient mix. What is your patient base look like? Do you have high volume, price sensitive patients, or do you have loyal, outcome driven patients who value your expertise? So you have to determine what your patient mix is. What is your patient look like. And then you have to really look at data. You know what is your booking lead times. What’s your wait list. How far are you booked out. So it’s it’s not just looking at one limiting factor. It’s looking at a big picture.
00:02:21:20 – 00:03:08:12
Cristian Devoz
I love that you mentioned your patient mix because it all starts with who your patients are. And when you understand how they think what’s important to them now you can prioritize how you proceed in your practice. Like if you’re a med spa, you’re very volume driven, right? In a med spa, as opposed to a surgical practice where you really want to be result driven and people will come to you because of the quality of your work. So it depends of who you are and who your patients are.
Nan Maddox
Well, you have to look at your schedule. You know, if like an injector, if you’re at capacity, if you’re booked out for 12 weeks and you raise your prices a little bit and you have a small drop in retention, well, that’s okay, because what you’re doing is opening up room for those higher value patients to be able to book an appointment, whereas they wouldn’t have been able to before because you were already at capacity. So it’s just a balancing game, and you really have to look at numbers and really have to wait things out to make sure that you’re you’re doing the right thing at the right time.
00:04:26:18 – 00:06:55:20
Cristian Devoz
Right. Now, you mentioned the word value. And that makes me remember all of these times when we have been with clients and they say, well, our patients are complaining about price and they say we’re charging too much, we’re too expensive because they’re on the other end of the balance, right? You don’t want to be too cheap, but also you don’t want to be too expensive. And they start asking us, hey, should we lower prices to match our competitors? Should we try to be the competitor based on price? What is what is your answer to that?
Nan Maddox
We get asked that quite a bit and we actually do a lot of competitor analysis for our clients. And our advice typically is competitor pricing is basically a reference point. It’s not your roadmap. It’s not something you want to base your prices on because, you know, when a patient chooses a surgeon for a facelift, that’s different than what they’re looking for in a facial or a neurotoxin. They’re going to choose the surgeon based on trust, not necessarily on what doctor A, B, or C is charging down the road.
00:06:55:22 – 00:12:33:12
Cristian Devoz
Now I I’ve heard this many times. So is inflation a legitimate reason to raise prices or is just an excuse practices use when they should be fixing deeper issues.
Nan Maddox
Maybe sometimes it’s both. But inflation is absolutely a legitimate factor in raising prices. I mean you have increased supply cost, labor costs, freight cost, vendor pricing increases. All of that has gone up dramatically over the past few years. So if you don’t raise your prices to accommodate for those increases, then your revenue is absolutely going to drop.
Cristian Devoz
How would the patient feel, though, when we’re talking about an industry that is based on, you know, it’s cash based? Number one, for the most part. And then also customer service oriented like these are optional procedures.
Nan Maddox
Yes, absolutely. And we get that question again a lot from our clients. If I raise prices, what will my patients think? I got that just last week from one of our clients. So you know, you have to look at it from the patient’s perspective.
00:14:32:10 – 00:16:37:07
Cristian Devoz
With that said, Nan, why should be the frequency? Because should you increase your prices every year? Should it be every two years? How often should I increase my prices?
Nan Maddox
Well, typically the industry standard is surgical pricing changes once a year, just like we previously talked about with inflation or every 18 to 24 months. And with med spa’s typically those increases are around 3 to 5%, each year.
00:16:37:09 – 00:17:46:02
Cristian Devoz
Now the wrong reasons. Let’s talk about those, because there might be some wrong reasons to increase prices. So what are some of the most common bad reasons? Practices raise prices and how can owners avoid those traps?
Nan Maddox
Well, the biggest mistake that we see is when the practices increase their prices out of panic, you know, suddenly decline in revenue.
00:17:46:04 – 00:19:44:13
Cristian Devoz
If I’m a provider, I’m listening to this podcast. What should be my next steps if I’m considering increasing my prices, can you give me like maybe an outline of what that should look like.
Nan Maddox
Looking at data. I mean, you know, you look at demand, you look at a capacity. How far are you booked out? The provider expertise. Are you adding, a different technique?
Cristian Devoz
Raise prices because your value has increased, not because you need the revenue.
And I’m always leery about following the competition because you can’t see the promotions. You can see what they’re offering, but you don’t see their bottom line. You don’t see they’re expensive, and you don’t even see that they might be going out of business. So you don’t want to replicate what others are doing. You have to focus on what’s working for you, find your own formula, what works for you and your business, and make sure that you stay true to that. That’s what you become separate from the competition. That’s how you differentiate yourself and set yourself apart. So that’s very interesting. Now just a final thought would be, if I’m a provider, I’m listening to this podcast. What should be my next steps if I’m considering increasing my prices, can you give me like maybe an outline of what that should look like.
Nan Maddox
Looking at data? I mean, you know, you look at demand, you look at a capacity. How far are you booked out? The provider expertise. Are you adding, a different technique? Do you have a technique that’s different than someone else that you can promote? What are your cost of goods and overhead? Make sure you are doing a great analysis of your PNL so that you know how much you’re spending and what that percentage is to revenue and your brand strength and positioning. What are you what are you wanting to look like to your patients? What are you representing? And then the patient experience improvements. What have you done to improve that patient experience? And when these five things are aligned, the price increases feel natural. They don’t feel forced. And so just making sure that you communicate again, to go back to making sure the patients know why. Because if the patient experience hasn’t improved, patients are going to feel that increase in price instead of truly understanding it.
00:19:44:15 – 00:20:47:05
Cristian Devoz
Absolutely. I don’t think there is a better way to end this episode, and that was a great insight. Now, for those of you listening, I guess look at where you have been to figure out where you’re going. And that would be my final thought there. Always make sure you’re analyzing information that you have by the numbers, look at your data, look at your patients, and then make the best decision for yourself for the practice. And then of course, monitor that decision. See if you did the right thing or if you need further adjustments. But at the end of the day, all you have to really focus on is being the best that you can be when you do.
Nan Maddox
Yes, I think the bottom line with that is, you know, raise prices because your value has increased, not because you need the revenue.
Cristian Devoz
Love it. And with that, thank you. So much for being with us in this episode. He has been such a great conversation, very great insights as well. And I hope that, you know, our audience was able to get good value out of this. Thank you everybody for listening and good luck and God bless everybody.
00:20:47:07 – 00:21:05:15
Before you go. New episodes are released every two weeks, offering perspective on the decisions, systems and leadership behind well-run practices for continued insight between episodes. Follow us on social media at Shorr Solutions. This is Shorr Solutions, the podcast.
