Being Smart about Discounting and Promotions
With increasing frequency I am seeing practices try a variety of creative efforts to get more visitors to commit to treatment; some of these efforts are well designed and effective, with others not so much. Such offers come in one of two forms: either a reduction in the fee, or a prize/reward for completing a desired action. Today’s post looks at how to design an effective strategy that avoid common pitfalls in this area.
I might as well get the worst news out of the way first: I don’t like to see practices invest money on rewards for existing patients. (“Movie Night” is a common example). I’m not suggesting that it isn’t a very nice thing to do for your patients and their guests – it is – but as a businessman I question the value to the practice, simply because the money could be better spent (meaning, invested) in attracting new patients. As a father with three kids who all received treatment, I can tell you that an outstanding result is thanks enough. You don’t need to have a customer appreciation event. Do it if you wish for a goodwill gesture, and yes, it is good PR. But don’t expect much in the way of new cases from the investment.
Regarding discounting, the supreme rule is that, if you offer a reduction in fee, it must be a policy that applies to every patient. In other words, you cannot selectively pick and choose who gets offered the discount and who does not. A common example is your discount for payment-in-full: it is offered to everyone. You should also ensure, as with payment-in-full, that your practice is getting a benefit that is significant enough to offer the discount. Finally, your TCs and your finance manager should carefully track the reaction that your discount offer generates, and be willing to experiment until you find what motivates the behavior that you desire. As I’ve mentioned in my last book, I have learned through trial-and-error that the amount of $300 for a payment-in-full discount on a full-fee case is the ‘magic threshold’ that entices more families to select this option for payment.
On promotional giveaways and contests, you should take care to select a “sizzle” prize or reward that will appeal to both children and adults. A friend of mine who is a local orthodontist is offering a drone as a prize for his contest – an unusual gift with high perceived value for both groups. The prize is clever, it’s creative, and it is generating a lot of buzz on social media.
Lastly, it might surprise you to learn that I am not a fan of trying to use prizes to motivate patients to refer their friends to you, simply because (a) it smacks of bribery and (b) I have never, with one recent exception, seen good results from this type of effort, whether in orthodontics or elsewhere. As with the customer appreciation event, I don’t think that it is necessary to do this. If your patients were happy with the experience they had at your business, you don’t need to use a carrot to motivate them to recommend their friends to you. They will send their friends to you because they simply want to.
