Pricing strategy in aesthetics: how do you price your procedures for profit and patient satisfaction?
How much should your patients expect to pay for eyelid surgery? What about a facelift or laser hair removal? As you can see from our infographic, the price tags for cosmetic procedures vary considerably.
While there is usually a correlation between the costs of cosmetic surgery procedures and local economic factors, the exact cost of an individual’s procedure can vary considerably based on their specific needs and desired outcome. So how can aesthetic practitioners manage their pricing strategy to ensure that they are both profitable and competitive, and above all ethical?
Research your competitors’ services and pricing structures
Be sure to investigate what services other practitioners in your area are offering and the range of prices they are charging. “Today’s patients educate themselves and are often aware of the average cost of procedures. I don’t set prices so low that it attracts those looking for the ‘cheapest deal.’ Those patients tend to not be loyal. However, I also do not set prices at the very top of the spectrum, so as not to drive away patients who are cost-conscious,” comments Dr.Levin in an article on ‘the aesthetic channel’ website. Rather than matching prices with others in the community, aim to compete on skill / reputation.
For example, do you have a local competitive advantage? If you have specific expertise, experience or glowing testimonials that others in your area do not have, you can justify charging more. “The price should reflect the skill and expertise of the physician,” according to Dr. Levin who says that she charges a premium for cosmetic eyelid surgery because of her level of expertise in that particular area.
Don’t be too focused on being cheap
The cheapest prices in town may initially get people talking, but what people really want is value. Aim to provide value through being quality driven and you will not have to be the cheapest in town to get customers.
For example, the rise in demand for non-surgical cosmetic procedures has led to an increase in the number of people providing these treatments at very low prices. This might sound like good news for the consumer, but non-surgical cosmetic procedures and Botulinum toxin injections in particular, are costly with good reason. The expense involved in using quality products, providing excellent service and meeting the necessary safety requirements is significant, so in order to meet these costs, quality practitioners have to set their prices accordingly.
Consider alternative pricing structures, but always be transparent
However you choose to price your services, it is important that you are clear about what is included to avoid any misunderstandings.
For example, if you choose to advertise prices that are for surgery / treatment only, avoid leaving the patient with a nasty surprise when they get the final bill by being clear that there will be additional fees for aftercare etc and making sure your patient knows what these are going to be.
Alternatively, you could consider offering a fixed price all-inclusive quote that covers everything the patient will need with no ‘hidden fees’. Be sure to think about the costs of consultations, treatment / surgery, anaesthetic, an overnight stay, medication, after care etc.
In recent years there has been an explosion in the number of injectables and devices that have disposables. While equipment is a fixed cost, disposables add cost to each procedure. In response to this many practitioners opt to bundle procedures into a single price package, to better meet patients’ desired outcomes and better absorb the costs of expensive disposables.
There may be instances where it is difficult to set a price for surgical procedures as every patient is treated on a case–by-case basis. In these circumstances you could provide a typical price range but indicate clearly that this is subject to individual requirements.
It is fairly common and considered good practice to offer a free initial consultation, particularly for more invasive procedures. The consultation provides an opportunity for you to meet the patient and assess their suitability for the treatment before any money exchanges hands, which makes it easier to say ‘no’ if you decide that the patient is not suitable. Read our guide, ‘How to say no to patients’, for further guidance on this. With the variability associated with some treatments, a free consultation also provides the chance for patient and practitioner to discuss exact costs of a tailor made package based on a thorough assessment of specific requirements.
Don’t forget to do the maths
It is clear that there is no one surefire, formula-based approach to pricing and we have already considered certain key factors such as tracking how much competitors are charging, and understanding the relationship between quality and price.
But ultimately, however much you love your job, you will need to make a profit if your business is to be sustainable. Making money means generating enough revenue to not only cover your costs, but take a profit and perhaps expand your business. In order to cover your costs and make a return on your investment, you need to know how much your service costs. To work this out you need to look at your overhead costs, which includes fixed costs like rent, and variable costs like the products you use. You must include all these costs in your estimate of the real costs of your services and price them accordingly.
Factoring in overheads can also help you to determine whether to offer procedures or how to offer them for less. This can help you decide whether to offer certain procedures at all, for example if a procedure requires expensive equipment and a lot of your time you may decide that you are not likely to meet your desired return on investment.
Of course, practitioners in or close to major metropolitan areas generally have to charge more because their overheads are higher, but may have the same profit margin as their colleagues elsewhere because it costs less to run their practice. Geographic location can also impact on staff costs as staff generally expect to be paid more in metropolitan areas.
Investigate finance options
Finance availability is often a barrier to patients who are considering undergoing a cosmetic treatment or committing to a course of treatments. As your practice grows, you could consider forming a partnership with a finance company to offer short-term loans to fund cosmetic surgery. If you choose to go down this route, make sure you do your research to find a reputable company to supply the loans and ensure that the interest charges and terms are reasonable. Of course, as a responsible practitioner, if in doubt that the patient can afford to take out a loan to fund treatment, you have no obligation to take them on.
A word of caution
At Hamilton Fraser Cosmetic Insurance, we recommend that nurses, dentists and other professionals working in aesthetics follow the General Medical Council guidance, which states that doctors and surgeons carrying out cosmetic treatments must market their services ethically. When it comes to pricing, this includes avoiding two-for-one offers and allowing a minimum two-week cooling-off period before surgery. Irresponsible advertising and aggressive inducements must also be avoided, including offering treatments as prizes. Practitioners must be personally responsible for managing the consent process and ensuring that patients know who to contact in the event of complications. It is important to remember that some patients who seek cosmetic interventions are extremely vulnerable and that if you are in any doubt about treating a patient, whether because you suspect body dysmorphia or because the patients has unrealistic expectations, you can say no.