Should You Discount to Match a Competitor’s Fees?

In my last article we discussed handling several issues related to discounting, one of those issues being whether or not to match a sibling discount offered by another practice that had treated a family member of the patient. My recommendation was that you should match it.

Several doctors wrote me afterward with the same question – does this mean that we should also be willing to match the fee of a competitive practice?

My answer might surprise you – a resounding NO.  As I’ve stated in previous posts, you should never lower your fee without a corresponding drop in value.

At first glance, that may appear to contradict the rationale to match a competitor’s discount, but it really doesn’t. I’ll explain why.

A discount is a minor courtesy that you offer to patients in exchange for a minor courtesy that your practices receives in return; there is always a mutual benefit. Payment-in-full, a sibling start, a prompt decision to get started – all were covered in my last post, and all have one thing in common: your practice benefits, and the patient benefits. There is a give-and-take.

On the other hand, lowering your fee simply to meet that of a competitor is caving to an ultimatum: comply with an unreasonable demand, or suffer the consequences. I use the term ‘unreasonable’ because there is no reason here for you to drop your fee. In my last book, The Book of Pearls, I addressed this issue when there is no discernible difference in treatment approaches. The problem here is just that – by lowering our fee, we allow the treatment approach, not the people doing the work, to be the primary decision driver, thereby commoditizing the services that are being provided. That is a mistake, and one that must be avoided.

I would also remind you that, if the patient has the financial means to afford treatment terms at your practice – and, statistically, about 95% do if your terms are sensible – this eliminates your fee as the reason for not starting treatment with you. So the problem is not the money, but rather, that the patient does not see enough difference in value between you and the other practice to justify your higher fee.

Oftentimes, the fee discount request includes a hidden twist: the patient wants you to justify your higher fee so that they can feel good about paying it, and this is the reason that the fee concern is raised in the first place.

You owe them that justification. If I were the doctor, here is how I would explain my fee, using material from my practice training program. I will assume that the difference in fees here is $1000 for demonstration purposes.

“Mrs. Patient, I realize that at first glance it appears you are paying more for the same thing because the appliances look the same to you. However, keep in mind that it is not the appliances, but the skill of the doctor and staff, that determine the quality of the results for your child. That is what you are paying for.

We have provided you with a summary of our team’s qualifications, and you have seen examples of the results we have attained for our other patients. I invite you to compare these points to those of your other options as you make a decision.

It would be unethical for us to charge you a different fee than we charge our other patients, so we cannot do that. However, the difference between what our competitor charges and what your investment will be at our practice is only forty-one dollars a month, interest free.

So the decision that you have to make is whether or not what you have seen and experienced here is worth an additional forty-one dollars a month to you and your child. That said, we would welcome the opportunity to have your child as a new patient.”

Where does this leave you? If the patient decides to pay your higher fee – and they should – give yourself a pat on the back, because you and your team are doing a good job of communicating the value of treatment at your practice.

If they elect to go somewhere else because of a lower fee, work on the things I mentioned earlier. The good news? It is a correctable skill problem.