The price-point puzzle
So, what's Jamie missing here when it comes to the drop-off in clients? We can never be 100 percent sure, but there are places
to look other than internal financial reports. Two of the most obvious culprits for the drop-off in business at Jamie's practice
are fees and the Internet.
Let's look at price points first. Setting fees is an inexact science at best, but here are some things to consider:
Competition. If a potential client doesn't understand the nuances of medicine and surgery, they can at least compare your fees. Any phone
shopper can call another practice to compare. If your price is significantly higher than another practice's, you'll see a
drop in clients. It's simple economics.
The price at which demand drops off is a price point. The solution is to keep competitive prices competitive. This means keeping
your price near the price point.
Human psychology. Savvy marketers know that people respond to how a price "looks" or "sounds" to them. A price of $29 is more appealing than
$30—it feels less expensive to our emotional mind. And often our emotional mind wins out over our rational mind.
Setting prices to appeal to the emotional mind pays off—even in our profession. Keeping a surgical price under a certain psychological
barrier is important. Price points are partly emotional.
Stability. Clients and staff get comfortable with a certain price. If you don't raise or change prices often, then clients become accustomed—too accustomed—to the prices. Frequent but small changes in prices are a crucial step to preventing this phenomenon.
Also, it's important to train your team members that pricing can be an emotional issue for them, too. No one wants to explain
fee changes when they're arbitrary. Remind them that improved medicine and inflation make price changes a necessity to maintain
the same level of patient care and staff benefits. If they recognize this, it can help them talk positively to clients about
increases, instead of grousing along with them.
Your psychology. As a product or service becomes more and more expensive, veterinarians—and even practice owners—may consider the product
or service to be "too expensive" for a particular client and decline to offer the service or product as often. That's when
the veterinarian has crossed his or her own emotional price point. As an owner, it's important to monitor associate veterinarians
for a reluctance to recommend certain products or services. You can see it in low or declining average transaction fees.
Neglecting to recommend the best medicine leads to outdated inventory—a total loss—and a decline in doctors' skills with more
complicated procedures. This is a lose/lose situation for everyone.
You have two choices: Buck up, promote the service, and charge the fee you deserve—or lower the price below the psychological
price point you've set for yourself.