Fee Sensitivity and the $10,000 Refrigerator

By October 15, 2020Madow Blog
sensitivity

Fee Sensitivity

Recently we have received a lot of communication about fee sensitivity. Dentists are worried that patients will leave them for a cheaper dentist down the street. Patients are trying to cut deals. And folks seem to be worried that a “no-show” may have been because their fees were perceived as “too high.”

A few years back there was a famous study done by an MBA candidate at Loyola University, right here in beautiful Baltimore. In the study she developed a high-end refrigerator, and then pitched it to a computer-simulated group of consumers using various price points.

The consumers seemed a little leery of a rock bottom price. They “purchased” a decent amount at a price that seemed above average. But the price that did the best was the highest – a $10,000 refrigerator! And of course the profits were sky high!

Don’t price your crowns at $10,000

Now we are not suggesting that you price your crowns at $10,000. But you don’t want to get involved in a race to the bottom of the fee pool either, unless you want to compete with Walmart and the worst DSO in town.

The thing is, whether your crowns are $1200, $1500, or $1800, most patients will think they are too expensive and that you are a “rich dentist.” So provide an incredible experience and do a fantastic crown. That way, even though the patient’s perception may be that your fees are a bit high, they will feel they got a great value. Then everyone is happy!

Right now hundreds of thousands of people are lined up (virtually of course) to buy a new iPhone 12. How many of them need an iPhone 12? Not a single one. How many WANT one? Every one of them.

Remember, you can lead a patient to water, but you can’t make them drink. You gotta make ’em thirsty!  That’s enough metaphors, analogies, adages and old saws for now……

The Madow Brothers

Author The Madow Brothers

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