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Nottingham, the going rate may be around £300. It can be misleading to compare your fees to those of a clinic in a different city or region that is attracting an entirely different demographic of patients. Ask your sales representative or territory manager what similar clinics are charging, especially for non-surgical treatments, where there is the greatest disparity among practitioners. They are in the best position to advise you on a viable strategy, since they have firsthand knowledge of retail pricing. Consider who your client base is

and what market fluctuations are relevant in your geographic region. For example, if you are in a region where the housing market is still struggling to come back and unemployment is at an all-time high, medspas and salons may be flooding the market with discounted treatment fees, making it harder to maintain a suitable price point. Local patients may tend to be more price sensitive in these areas as well. In central London, consumer spending appears to have stabilised to some degree based on the financial marketÕs performance and foreign visitors. Patients today are less willing to pay

more for services that are readily available, and therefore easy to find and less exclusive in their positioning. This is particularly true where the perception is that one practitioner can deliver the same results as the next. The general theory is that consumers are more price sensitive where less skill, training and expertise is required to deliver a given treatment or service. For example, laser hair removal services are widely considered interchangeable, even though the technology used to remove hair may range from a flashlamp to a diode laser, and the longevity of results vary considerably.

Loss leaders Another tactic is to consider enhancing a particular product or service and create a greater demand among your existing patients. For example, select a few procedures as your loss leaders to draw in new patients. By definition, a loss leader is a product or service that if offered at cost ® or in some cases, below cost ® to stimulate the purchase of other more

profitable products or services. It is effectively a form of sales promotion designed to drive patients in the door, whether they are new patients or a stream of old patients seeking out new services. In some cases, the price of a loss leader may be set so that is it truly marketed at a

Ô lossÕ for the practice in terms of cost of materials and staff time. A loss leader should be something your clients purchase repeatedly, so they are aware of the usual price and will be able to recognise the value of a special offer. A good example of a loss leader is a

procedure that does not involve doctor-to-patient face time, such as a glycolic peel or laser hair removal. Almost any non-surgical procedure can lend itself to this concept, and they can be rotated at specific intervals. Skincare products, facials, intense pulsed light treatments, as well as botulinum toxin and dermal fillers, are all reasonable options for loss leaders. However, it is not generally advisable to use a surgical

procedure such as a breast augmentation or liposuction as a loss leader. Although these are the most price-sensitive cosmetic surgeries, time, potential risks and complications, office visits and patient satisfaction issues must be

taken into consideration. In some markets across the US, we are seeing fees charged for saline filled breast implant surgery starting at $4000, which in effect lowers the average fees charged for this operation. At

that reduced rate, a

surgeonÕs time may only be calculated at a profit of approximately $800, which falls within the realm of injectable treatment fees.

Supply and demand When calculating the cost of performing a procedure, consider all related expenses including materials, supplies, staff time, marketing, follow-ups and associated overhead costs. Factor in the profit margin you are seeking to determine whether you are able to charge a higher price by distinguishing your practice with exclusively tailored offerings. Take into consideration where you are in practice when calculating your hourly rate. If you are just starting out, you may be willing to charge lower fees to gain experience and get exposure to new patients. However, if you have been in private practice for 15 years, you are already well established in your field and should be more selective. Supply and demand also plays an

important role in your local market and pricing considerations. If you are in an area like the Upper East Side of Manhattan, where there are hundreds of doctors offering almost identical services in a 1-mile radius, you have to pay attention to the highs and lows of the laws of supply and demand. If you are marketing a high-supply, high-demand product, for example, incorporate this factor into your pricing and charge a more competitive price. However, if you are operating in a high-supply, low-demand market in which there are more practitioners offering the services you offer and not enough patients to fill their waiting rooms, a price adjustment may be in order. The ideal situation is to be in a low-supply, high-demand market, but these are exceedingly rare today. Review your local market to identify

the procedures that are most popular among consumers and which may be | June 2012 ❚ 73

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