00:00:04:06 – 00:02:22:16
Welcome to Shorr Solutions: the podcast. I’m your host, Jay Shorr. I’m the CEO and founder of Shorr Solutions, a national and award-winning consulting firm, assisting aesthetic and surgical practices with their operational, administrative and financial success. I have an amazing team of practice management experts and clients across the U.S. and as an industry expert with firsthand experience owning a multimillion dollar cosmetic dermatology and plastic surgery practice.
Listen in as I’ll lend you my expertise and best tips to successfully manage and grow your aesthetic practice. I will also be bringing in guests along the way, so get ready to be equipped to operate your aesthetic practice strategically and profitably. Welcome to Shorr Solutions: The podcast.
Greetings, everybody, and welcome to another episode of Shorr Solutions: the podcast.
My name is Jay Shorr and I am the CEO and founder of Shorr Solutions, an award-winning National Practice management consulting firm, specializing in the operational, administrative, financial, health and guidance of your aesthetic, cosmetic and surgical practice. Today, I really want to discuss something that is very near and dear to me because I hear it everywhere and I hear it with all of our clients.
I hear it all the conferences and the title today is Your discounts have you down? How to Stop devaluing your services as an (start) adding Worth. Now, the reason for this is many times we want to try and attract new business. How do we attract that new business? We can do it by our website organically. Pay-per-click, social media, Instagram, Facebook, all of the other types of modules that we use every day.
But is it the right thing to do to discount your professional services?
00:02:22:17 – 00:03:09:09
So should you discount or should you run a special? Well, let’s discuss. What’s the difference between a discount and a special? The discount is when you drop the price and that becomes the price. So people come in and they’re running a discount. Can you offer me a discount?
My price is $1,000 for a couple syringes of a filler. Maybe they’re normally $1200 for two syringes, so you’ll discount it to 12 to a $1000, because that’s what everybody is doing. Well, once you discount, the problem with that is you are dropping the price and it becomes very difficult to maintain the integrity of your price. Whereas if you market and you run a special and the special may be for a limited time, then at the end of the specials similar to that of a nationally advertised item, like a car or something at the supermarket, at the end of that specific term, the price goes back to its normal price and it’s no longer discounted.
00:03:10:00 – 00:05:44:09
So another question, are discounts looked at favorably, or does it cheapen your brand? Well, that’s a very interesting question as well. Who is it looking favorably to? Is it looking favorably to your perspective or your existing patient or in the marketplace? Does it look like they are the K-Mart, the WalMart, the Target in the industry? Now, look, I’m not having anything against Walmart and Target versus the Neiman’s.
The Bloomingdales, the Saks Fifth Avenue, because then there’s the middle of the road. There’s the Macy’s. However, where do you want to be? Because if you look at it, there is a macy’s friends and family. There’s a macy’s 20% off. There’s a macy’s sale all the time. It’s kind of like Bed, Bath and Beyond, the 20% off of one item, the 20% off of your entire purchase.
And this coupon never expires, although it may have a date of expiration. And on the coupon, you can bring that coupon in, whatever, and get the 20% off. My question is, why just not lower the prices 20%? Well, because then you’re leaving something on the table as the merchant, because those people who don’t have it then automatically pay the regular retail price.
But then you can sign up for an app and it emails you those discounts. So does it cheapen your brand? Well, as I explained, I’m a shopper at all levels of retail. I do shop at Walmart for specific items, for my pet supplies because it’s the same quality item for a lesser price than I would at a major retailer.
Now, I’m also an online shopper, and online always has some types of discounts too. If you’re a new customer, you type in this code. Does it cheapen your brand? if you want to maintain the integrity of the brand, then I maintain that every once in a while it is okay to run a special, but don’t keep that all the time.
And we’ll talk about the daily deals in a minute.
00:05:44:10 – 00:08:25:19
So once you discount, is it easier or harder to increase your price for services versus retail? I believe that it is. it’s harder to increase it because if you’re always discounting those people that come in to see you, to be treated only know about the discount. Example Groupon.
Now, Groupon still has some popularity to it, but not the way it used to be. And what I have found in my formal medical practice, and for those of you who know me, you’ll understand when I referred to my formal medical practice, I will make a disclaimer. I am not a physician. So when I referred to my formal medical practice is, I was a partner in a very large leading dermatology, facial, body, plastic, cosmetic, and med spa practice here in South Florida.
And then we sold it. And then I went into this consulting business. So when I referred to my practice, I was not the doctor in that practice. So. Is it harder to increase that? The answer is yes, because those people who come to you, like the Groupon shopper, are going to wait for the next deal and not come to you.
They’re going to go to the next dealmaker who’s going to allow that discount and they’ll shop from place to place, the place similar to that of gas stations. People will travel, you know, Miles, for a difference of three and $0.04 a gallon. I don’t understand why, because my time is worth a lot. So what are the disadvantages of discounting on daily deals such as Groupon?
Well, as I just touched, the daily deals such as Groupon, the people who make the money are Groupon. Now, people have said, you know, I truly believe it’s a way for me to be able to get more patients. But does it maintain the integrity of your business? I don’t believe that it does, because like I said, everybody’s going to be looking for the next deal.
When are you going to be running your next special? Now, if you’re going to do a Groupon or a daily deal type of thing, never offer the same things over and over. Run your daily deal or your discount. Now, I’m not promoting you do daily deals and Groupon. However, if you feel that you have to then run a different campaign and a different special each time so that that neural modulator, neurotoxin, dermal-fillers, patient. Laser hair removal patient that’s looking for that deal isn’t going to find that specific deal.
What they’re going to find is a different deal. So they’re not going to wait for the next Groupon in order for you to be able to offer them a lesser investment. I hate to use this word, or a cheaper price, not necessarily cheaper quality, but a lesser price. And I don’t know that price shoppers are really your best kind of a patient to go to.
00:08:26:17 – 00:11:26:24
So how do you handle the comment? I can get it cheaper elsewhere. Well, the word cheap. I don’t know how to define that. Is it cheap in quality or is it cheap in price? The word cheap usually means less expensive. And I caution all of you, don’t ever use that word in your practice. Cheap. Cheaper. It’s a lesser investment.
All right. Because cheap, in my mind, always allows me to believe that the product is cheap. Now, how do you handle? I can get it cheaper elsewhere. Well, yes, You may be able to get a neural modulator, neurotoxin for $10 unit, $9 a unit. And then you may end up getting it for 14 or $15 unit. And it’s the same neural modulator or neurotoxic and the same thing with the dermal filler.
Some people might sell that same hyaluronic acid filler for $600 and $700, while others may offer it for $400 or $500. Here’s what I ask you: Is it being performed by the same level medical professional in each specific setting? they may have junior associates versus the surgeon. I’m not going to get into the comment of who is better, the doctor, the surgeon, the nurse practitioner, or the physician assistant, because I know that I’m going to get into trouble with somebody because there are a lot of professional providers and I’m not going to use the word mid-level, all right?
But, I’m going to use professional providers who are not physicians of either M.D. or DO status. However, some of these national injectors are PAs and NPs and teach doctors. So if you can get it cheaper elsewhere. My comment will be if they say to you I can get it cheaper elsewhere, is it the same level of a quality of an injector?
Because I can buy a Coca-Cola up at a 7-Eleven. I can buy it at a restaurant that’s a Burger King. I can also buy it at a Bonefish Grill. And I can also buy that at a Ruth’s Chris or a Morton. And what I will promise you, it’s not the same price. However, it might be the same identical product.
So don’t argue with the patient over the price if it’s an add on or something like that, then you may make a special compensation or dispensation. However, I would promote the level of your practice over price, maintain the integrity all the time.
00:11:26:25 – 00:13:09:15
Yes. We’re going to take a quick break and a slight intermission because what kind of business would we be if we didn’t tell you about our own services?
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00:13:09:15 – 00:19:27:21
So then my next question would be, when is it okay to discount or lower your price? There’s a few different conditions here.
Discounting for Birthdays
First of all, if it is somebody’s birthday and this is a great thing, you have a list of all of your patients. You have their birth dates, you have their anniversaries, and you want to drive a campaign. So you’re not having a unilateral campaign. It might be nice to be able to send somebody a birthday email or birthday text and say happy birthday to you.
And you are a very special VIP client. And for your birthday, we would allow and we would like to offer you an X, Y or Z, whatever that promo or whatever that special is, but it’s not a unilateral special to everybody. It’s only to them for their birthday or a special occasion.
Discounting for Open Houses
Secondly, open houses. Now the open house is an event that you may have at your office.
It might be a brand new grand opening. And therefore what you want to do is offer a promo notional price for that specific day. So if you come in that day and you come into our office, then if you purchase that, it doesn’t necessarily have to be injected or the service doesn’t have to be performed today, but it does have to be ordered and it does have to be paid for.
And you can use that special once it’s paid to when you need it.
Discounts for When the Patient Pays in Advance to Instantly Close the Deal
The second is pay in advance to ensure that close the deal. So what does that mean? Many times in our surgical practice, you know, we had so many leads that we want to close the deal and book our schedule and book the O.R.. So if our price might be $5000 $7500 $10,000, $20,000 for the surgery, if you pay right now, then I’m willing to offer you a special.
But I mean it. That special is only good if you paid today. Because if you keep giving discounts and discounts, remember one thing. Every revenue dollar that you bring in, only a percentage of that revenue dollar is actually net profit because you have all your fixed and your variable expenses. But when you lower a price, every dollar that you discount is a 100% profit dollar.
Repeat that. Every dollar that you bring in may be only $0.20 to $0.30 will ever hit your bank. But when you discount an item 100% of that discount is profit that you’ve given away. So if you want to close the deal right away so you don’t have to exert any more time with that patient trying to close a deal and you can exert that time and effort into trying to close other deals. It may not be such a bad idea
Discounts During Slower days Due to Last Minute Cancellations and Moving Patients Up the Appointment List
When you have slower days. Last minute cancellations. There’s a thing called the move up list that we had. Let’s say it’s today or tomorrow and you have people scheduled for specific procedure next week or the week after. And now you have a cancellation at the last minute for today or tomorrow or the next day.
Well, it’s the old airplane rule. Once that airplane takes off, that seat is unsold, never to be accounted for again. So when today and tomorrow pass and now it’s Friday, you have lost the opportunity to fill that schedule for today or tomorrow. Whereas if you have a move up list and you call the patient and you say, Hello, Doctor X, Y, Z, whatever your doctor’s name is, would like me to call you.
We had a last minute cancellation. And if you’re okay and would like to come in today, I’d like to offer you your service at X amount of dollars or whatever that is. I’m not as much for percentages as I am for dollars because percentages tell a number. Don’t tell the physical dollar number. You have to figure that out. But if I say I’ll give you a $50, $100, $200 off depending upon what you’re doing, it makes a lot more sense.
And you do that by your patient move up list. What’s the relative importance of that? Because it now allows you to fill that schedule of the appointment that you moved up, whether it’s two days, three days from now or a week from now, whereas at least you have the opportunity to fill it, whereas once that person cancels and you don’t fill it, you never have the opportunity to fill it.
Staff Discounts
And lastly, staff discounts. I am a big believer in staff discounts. Staff discounts work multiple ways. I’m not promoting that you do this. However, in my former practice, we treated all of our staff complimentary. I was able to get product many times or consumables for, you know, your different lasers and things like that from my vendor to treat my staff.
Why? Because my staff were my biggest forms of advertisement. Now, when it came to the surgical portion, I would give the professional services away from that of my doctor. But I had an O.R. that had specific fixed and variable cost, anesthesia, that I couldn’t discount. I may be able to discount from the provider, the anesthesiologist or whatever, but there were some real hard costs in my O.R. so I would tell the staff member.
If it’s a surgical procedure, you pay for the O.R. fee and we’ll will work out the discount or complimentary service for any of the other services in our office. It is a way to have your staff showing off the services they’ve had in the exam room when they’re trying to close a deal. They would be able to do that.
I always used to show male patients plastic, neurotoxins, dermal fillers when I had them, because a male to a male made it very easy, and I even had my female nursing and my female patient care coordinators show other female patients some of the surgery results that they’ve had. All right. It’s a good way to close the deal.
00:19:28:08 – 00:21:58:16
Next, is it worth discounting for cash versus credit card payments to save the merchant processing fees? I don’t know how many times you may have heard this. What’s the price if I pay cash? Well, there’s only one reason, really, that you would want to do that. And I’m not promoting this because a lot of times it’s in violation of internal revenue laws.
What are some of the reasons that you take cash? Well, it’s easier. It’s quite negotiable. However, with cash, you’ve got to get it to the bank. If it gets to the bank and that’s where I’m going with this. I’m not here to be the judge. The jury, or the executioner. Many times people will take cash in a business because they can avoid having to pay the tax on the revenue and they don’t report it.
Now, I want you to understand something that when you do that, all you’re really doing is saving the tax portion of it. And the consequence, if it’s caught, because a staff that knows that you’re doing that may really be a whistle blower in the end. Now, is it worth taking cash in lieu of a credit card payment to save on the merchant processing fee?
Well, what are you going to say to somebody? Well, if you give me cash, I’ll waive the merchant processing fee because I don’t have to put it on my merchant processing for my credit card. What are you really saving? Are you really saving Two and a half percent? 3%? I think that the patient probably wants more of a discount than two or 3%.
Remember, it’s two or $3 for every $100. So if somebody is going to come in and buy a $200 skincare product and say, if I pay you cash, can I get a discount versus a credit card? It’s five or $6. All right. Then they say, well, you know, you won’t have to pay the tax if you don’t report it, don’t even go there.
All right. Just try to get the best credit card merchant processing rates that you can.
00:21:58:16 – 00:23:25:11
Now, discounts for: if you give me a better deal, I have so many friends that are going to come to see you. I know that there isn’t one person that’s listening or watching this webinar or podcast that hasn’t heard this story before.
If you give me a great deal, I have so many friends that are going to come to see you. I go, Oh boy, you probably never see them again. However, my favorite line was, I’ll tell you what, Mr.. Mrs.. Whatever the name is, if you bring me all of your friends, you and I will have a private conversation and I’ll make you a deal.
Remember, you may not compensate anybody in, like or in-kind for the referral of a patient. So be very, very careful. And discounting a procedure is kind of compensating somebody in like and or in-kind. So be very careful how you do that. Share with the patient that you’re more than willing to remunerate them or give them something. But it’s not in compensation.
Do not give out $50 gift cards for referrals and things like that. It isn’t going to fare well in the end.
00:23:25:12 – 00:24:45:15
What about vendor discounts to pass along the savings? I love it. I love it. I love it. I love it. So what am I speaking about? Well, I’ll give you two Quebec examples, not to mention the names of the programs, but Allergan and Galderma, they have different promotions.
The vendor. They are the vendor. Allergan on the Botox. Juvederm suite of products. Galderma on the Dysport and restaurant suite of products. And the more that you spend, they’ll allow offers. All right. So that the patient is able to get a savings or accumulate dollars to use. I’m all for that because you are financially remunerated back from the vendor.
Also, it may not be a bad idea from time to time to pass along some of the savings when you get great deals from the vendors. I remember when I was in the supermarket business and when I was in the aesthetic, the surgery center and the med spa business, if I got great deals. All right, I was able, depending upon my purchasing power.
I would get if I ordered ten boxes of this, I might get one or two free. Well, you have two choices. Either pass that along as a savings when you net it out or keep it to yourself for additional profit. It doesn’t hurt to pass along some of these savings. Don’t discount them. Make it a special deal, have a prize, have a drawing, whatever.
00:24:46:09 – 00:27:19:01
So hopefully, ladies and gentlemen, there are about eight or nine different tips that I was able to offer you on how to stop devaluing your services and start adding worth because you are worth it. Don’t devalue who you are, what you have to offer and who you are in the community against your competitor. Don’t look at yourself as having competition.
There is so much business to go around. It’s all about how you market yourself to be the best in your community. Thank you for sharing about 20 minutes of your time with me today. I look forward to having you join me on another episode of Shorr Solutions: The podcast. Good luck and God bless.
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