Medical Spas & Pricing

Pricing your medical services is a crucial factor in the success of your practice, but one that’s usually a second thought based on what the competition is doing - which can be a real mistake.

Your pricing strategy can significantly affect how patients perceive your clinic and how they respond to you. Finding the sweet spot between charging too much and charging too little can be challenging, but there are different pricing strategies you can consider. Let's explore some of these strategies and the research that can guide you in choosing what works best for your situation.

When it comes to pricing, the goal is generally to maximize gross revenues. While there are other goals you may have in mind, such as working fewer hours or focusing on hourly revenue, for now, let's stick with maximizing gross revenue.

Some medical spas believe that combining the "lowest cost/cheap" with "value" is the way to go, but this is the wrong approach. According to research, buyers who purchase high-priced services do so because they perceive the value from these purchases to be higher than cheaper alternatives (Zeithaml, 1988). Thus, pricing your services too low can be a double-edged sword. Not only can you get stuck in a race to the bottom with competitors pursuing a "lowest-cost" pricing strategy, but you may also attract patients who focus only on price and leave you for a cheaper alternative just as quickly. (Hello Groupon shoppers?)

On the other hand, premium pricing could be a much better option if you can execute it well. According to a study, consumers tend to believe that higher-priced products or services are of higher quality and have a higher status or prestige than lower-priced alternatives (Simonson & Rosen, 2014). Thus, if you offer high-quality services, premium pricing may attract patients who value quality and prestige over price.

However, if you’re not delivering superior services and outcomes, you can’t pursue this strategy. (For more on how you can automate high-touch care and improve your patient’s outcomes and experience read this post on automating high touch care pathways for cosmetic clinics.)

When considering a bundle or breakdown pricing strategy, it's important to keep in mind that different patients have different preferences. Some patients may prefer the transparency of a breakdown pricing strategy, where they see the exact cost per treatment. Meanwhile, others may prefer a bundle pricing strategy, where they pay a flat fee for a group of treatments. One strategy that could work is offering a membership plan that gives patients an option to avail of similar procedures for a certain price. This membership plan approach is uncommon in cosmetic medicine, but it has serious advantages.

Read this on creating subscription plans for cosmetic clinics.

Psychological pricing can also play a role in pricing your medical services. Pricing with the "9s" at the end is called Charm or Psychological Pricing. It’s when you dock a cent off from the perceived value of the treatment. According to research, using a charm pricing strategy can lead to a significant increase in sales volume (Anderson, 2004). However, you can't have all treatments priced with "9s." You also need to consider the "psychological" aspect of the patient when they browse your price list. Round numbers like "0s" work well for people who rely on emotions because seeing the number would make them "feel good."

Discounting or slashing off the price can be an effective pricing strategy, especially for costly treatments. Instead of offering a small discount, consider offering a significant discount that provides a larger perceived value. One study found that offering a store credit as a first-time customer discount led to an 87% increase in email list growth (Sumo, 2020). You can also have a side-by-side comparison of the old price to the current price by putting a slash on the old price, provided the old price is higher than the current one.

In conclusion, there is no one-size-fits-all approach to pricing your medical services. It's essential to experiment with different pricing strategies and find out what works best for your clinic. By using a combination of pricing strategies that resonate with your patients, you can increase your profitability and provide high-quality services that meet their needs. I hope this was helpful, and if you have any questions or want