Setting prices for your medical spa or laser center?
Part guesswork, part experience, part number crunching - how ever you look at it, determining how much you're going to charge is a difficult task. Here are nine factors to take into consideration:
1. Your Costs
If your prices don't include enough just to break-even, you’re heading for trouble. Medical businesses are expensive to run. The best thing to do is add up all your costs so that you absolutely know how much you need to make each month. If you've made the mistake of paying your staff on commission, you'll need to figure all of this out as well.
Also make sure you factor in all the hidden costs of your business like insurance, services that never get paid for one reason or another, and everyone’s favourite - taxes.
2. Your Profit
Somewhat related to your costs, you should always consider how much money you are trying to make above breaking even. This is business after all. You will actually need to decide how much money you want to make.
3. Market Demand
Cosmetic medicine is in high demand, but the markets getting more and more competitive as well. You should be aiming to make your services more expensive. Conversely if there’s hardly any work around, you’ll need to cheapen up if you hope to compete. You're fortunate here in some respects. There are ways of maximizing physician time for where it's most needed, physician treatments and consultations.
4. Market Standards
It’s hard to know what others are charging, but try asking around. Find out what all the spas, medical spas, plastic surgeons, and dermatologists charge. The more you know about what others are charging and what services they provide for the money, the better you’ll know how you fit in to the market.
5. Demand level
If you're a plastic surgeon to the stars, you're going to be able to charge more. If you're a GP that's offering Botox twice a month, you're going to be charging less. You need to be realistic, not about what you think, but about what the marketing thinks. We all know that injecting Botox is not that hard, but the truth is that the market doesn't know that. You'll need to come to grips with what demand you can expect.
Although often bundled with skill, experience is a different factor altogether. You may have two very talented doctors, but one with more experience might have better client skills, be able to foresee problems (and thus save the client time and money), intuitively know what’s going to work for a certain audience and so on. Experience doesn't mean medical experience but a combination of medical and business experience. The markets acceptance of how much experience you have should affect how much you charge.
7. Your Business Strategy
Your strategy or your angle will make a huge difference to how you price yourself. Think about the difference between Revlon and Chanel, the two could make the same perfume but you would never expect to pay the same for both. Figure out how you are pitching yourself and use that to help determine if you are cheap’n'cheerful, high end or somewhere in between. (More on this in future posts.)
8. Your Services
What you provide for your clients will also make a big difference to your price tag. For example you might be a touchy-feely doc who will do whatever it takes to get a job just right, or perhaps you are on call 24-7, or perhaps you provide the minimum amount of communication to cut costs. Whatever the case, adjusting your pricing to the type and level of service you provide is a must. Surface charges a premium since we specialize. Generalists tend to have less pricing pull.
9. Who is Your Client
Your price will often vary for different clients. This happens for a few reasons. Some clients require more effort, some are riskier, some are repeat clients, some you'd do for free since they know everyone, some you wouldn’t want to go near with a stick. You should vary your price to account for these sorts of factors. While it's often assumed that only the rich are cosmetic patients, we all know that's not true. We have patients arrive in both limos and busses.
Give it lots of thought
Your pricing needs to be carefully thought out. I see a lot of physicians who set their prices on what the doc down the street is charging. There are a lot of docs who continually try to undercut the prices of everyone, exactly where you don't want to be. There can always be only one lowest price and the patient who will come to you based on price, will leave you just as fast.
Pricing isn't simple. You should keep an open mind about your ability to charge a premium. If you're charging too much or to little the market will tell you. Be receptive.