Will Discounting My Services Hurt My Bottom Line?
- Posted on: Sep 8 2016
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As we gear up and get ready for the busy business season and prepare for the onslaught of fall and winter holidays, there is a big question that comes to mind…will discounting my services hurt my bottom line? This includes bundling services into packages, discounting single services or using resources like Groupon and Living Social, and creating special offers. I’ve covered this topic in my book, Beautifully Profitable, Profitable Forever, but we’ll discuss the pros and cons right here:
First, let’s talk about Groupon, Living Social and other e-commerce marketplaces that offer discounted services to locals. When it comes to these platforms, it’s undoubtedly a good way to get new patients through the door and generate more awareness about your practice. Still the question remains, will these patients remain loyal? Maybe. It depends on your staff, your process and how you handle new patients.
If you don’t have the proper follow-up procedure, you shouldn’t expect these avenues of gaining new patients to bring you loyal patients. The reality is that most of these buyers are loyal to the discount and not to you specifically, so you need to have a plan in place to avoid being labeled as the go-to discount practice. Undermining your value is something you never want to do!
To get back to the big question, the answer is YES. If you’re not handling and processing discounts or coupons in the right way, then it can have a massive negative impact on your bottom line and your brand.
So, how do we make these types of discounts effective?
If you’re going to do a Groupon or other discounted service, first consider the following:
- What is acceptable with the board of medicine in your state in terms of stock laws and fee splitting? Check what is legal and what is not – check with a healthcare attorney in your state.
- What are your overhead costs if you do a service on Groupon or Living Social? How will this affect your own profit?
- Review your competitor’s prices and know the price-points of others in your field – how will your numbers compare?
Once you’ve figured out these aspects and hypothetical situations then you can decide whether you should or should not go through with discounting your services.
If you decide to offer any discounted services, then use the following guidelines:
- Ensure that your team knows how to follow up and sell other products and services and do proper and effective consults – this might mean discounting further services to complete an up-sell.
- Make the discount available for a limited time only and create scarcity.
- Ensure that your schedule is organized for your loyal and regular patients as well as new-comers.
- Be prepared to accommodate those who did not originally purchase the discounted service but found out about it afterwards.
The takeaway key point here is, if you decide to move ahead with discounting your services you must plan accordingly. You can’t simply throw a discount onto Groupon or Living Social or even on your Social Media and expect these buyers to turn into regular patients. Your team must be ready to convert these one-time-buyers into loyal patients. If your team is able to get the patient to return for a completely different service or product, then they are generating a path for success.
Again, if you don’t have a plan in place, and depending on your fees and costs, discounting your services can negatively impact your bottom line. I suggest you proceed with caution on discounts, do your research, train your team and lead to succeed. And if you want to watch me talk about this topic in my Facebook Live video, you can see it right here.