Naturally, there are times throughout the year that business is booming for your aesthetics clinic and times when bookings appear wide open. While we understand the desire to get people in to fill those slots, is discounting your services the best way to do that? Based on purchases we see on discount purchase sites, it might seem like that laser hair removal clinic across the way got a lot of sales, but what impact is this really having on their business? Does a discount really help to build your business?
Here, we take a closer look at what discounts mean for your aesthetics clinic and how much they’re really affecting your profit margins, as well as some alternative suggestions to boost business without slashing prices.
Discounts may fill up your schedule quickly, but they may be causing more harm than good for your aesthetics business’ profits. Generally speaking, discounts incentivize prospective patients to book an appointment with your clinic in order to claim your same great services for less cost. Because discounts center around emphasizing price, patients booking through said discounts often end up focusing more on cost than the benefits of a treatment plan or the added value of seeking out treatments at your clinic. In other words, they focus in on dollar cost rather than overall value of a comprehensive treatment plan—they wind up seeing your service as a commodity and the aesthetic clinic performing the treatment as interchangeable.
The problem with this view is that you now are tasked with convincing these patients of your usual prices, the ones that better protect your profit margins and build long-term growth in your aesthetics business. An emphasis on cost undercuts the experience you’re delivering to your patients, any added perks you may be offering—like access to a patient care coordinator to assist them between appointments or an online booking and payment system for added convenience—and even the overall experience and professionalism of your staff. Eventually, patient retention will come in at an abysmal rate as you attempt to convince these price-focused patients to spend more, potentially leading to a more permanent lowering of prices or more frequent promotions in an attempt to draw patients back in, further eroding your profit margins.
One discounting strategy that should be approached with extreme caution is partnerships with e-commerce sites offering customers severe discounts. You may see a long list of deals from MediSpas and aesthetics clinics on these sites, each offering their own great deal on a treatment or package, some with hundreds of sales and counting, and you might wonder if your clinic is missing out on a big opportunity. However, it’s important to consider the numbers behind these promotions. To begin, most deal sites will suggest your business offer a popular service or treatment package at a steep discount—50-70% off your regular price is recommended—to get more eyes on your promotion. The better the deal, the more popular your page will be and that translates to more visits and, ultimately, more sales. Depending on the kind of profit margin you have built into your regular prices, this discount alone could mean your business is taking a hit for a quick boost in patient acquisition. Of course, the hosting site will also take a cut of your sales, leaving your clinic with an even lower profit margin.
It might be worth the investment if it boosts your business longer-term but unfortunately, customers attracted to your business as a result of a deal are unlikely to return at full-price based on their spending habits and budgets, regardless of whether or not your services are outstanding. In fact, you can bet about 90% of customers drawn in through this system won’t spend any extra money on upgrades, skin care items, or other retail or service offerings to complement the treatment they’ve already bought into at the promotional price. At most, you may see 10% return business—but even that can be an optimistic estimate once you factor in the other ways these heavily discounted promotions can affect your business.
With a schedule that’s booked solid with discounted services, it can become difficult to meet your revenue goals without overworking staff (and likely underpaying them due to slim or even non-existent margins), particularly for clinics with smaller teams. This also means that with this increased stress on staff, you’re less likely to have adequate time to spend with each patient, risking a drop in patient care and satisfaction, rushed appointments, and an even lesser likelihood that patients will return. Excitement and confidence in your services from all staff is infectious and can help to emphasize value, meaning tired staff are likely to have the opposite effect.
Finally, it should also be noted that many deal sites will maintain pages featuring past promotions to give their users a better understanding of what deals were available in the past, to keep them checking back for similar discounts. The optics then to loyal patients or those seeking the same treatment outside of the promotional offers may suggest that it’s not worth paying full price for your clinic’s services. Alternatively, they may feel as though your business is taking advantage of patients’ vulnerabilities. They might wonder, why are they paying so much while you’ve been taking such high margins? In the end, this could lead to fewer consultations, a lower conversion rate if you’re unable to offer them the same discount, and a rash of negative reviews.
If you insist on offering discounts on treatments, be conscious of who you offer them to and what your clinic gets in return for the discount. Before offering a discount or promotion, consider all the factors that affect aesthetics pricing to ensure that it is a feasible option for your clinic at this time. Aesthetic treatments should be considered important personal investments that offer value and should be performed by a trusted treatment provider rather than a commodity that may be purchased anywhere. While price may draw in a patient, ensure that it isn’t the main point of conversation throughout the consultation. Further, you may want to offer promotional prices only on services that complement other services, leading to a potential upsell for optimal treatment results.
For those intent on offering a discount, opting for a customized code prevents others from passing it along to more than one person. For example, giving a discount code that perhaps offers a promotional price for an initial consultation to a prospective patient who signs up for your email list prevents the sharing of discount codes to too many individuals, preventing the dilution of your profit margins while helping to build out a list of interested prospective patients you can easily connect with when launching a new device or service, hosting an event, or making other important announcements.
Having said that, there are other ways to boost your aesthetics bookings without cutting into your profit margins. For the price-conscious patients, offering payment plans may be a way to help meet tighter budgets with instalments rather than paying in one lump sum—this makes the overall price seem much more manageable and limits the risk of causing sticker shock. Offering flexible payment options will also allow your clinic to better maintain its profit margins and focus the conversation on overall value and patient benefits supported by a proper before-and-after photo gallery, rather than having every consultation become dominated by cost.
Further, aesthetic treatments that have a high demand but low supply are often more profitable, while those with high demand and high supply are often discounted in order to compete in a saturated market. However, focusing in on your operating costs and how you package your treatments may help to better sustain lower prices without having to compromise on your profit margins. For example, opting for a medical aesthetics device that is available through more flexible payment options can help to limit costs and keep your expenses in line with profits. Likewise, cutting out consumables where possible can help lower your prices while maintaining an adequate profit margin on more competitive services. Also offering a services menu that includes complementary treatments or alternatives for patients who may show contraindications for a more popular procedure can help to improve conversion and retention rates, thereby lowering patient acquisitions costs and boosting profits.
Finally, consumers who are willing to pay more for a premium service aren’t generally deterred by a higher price point, so long as you are able to support that higher price with added value, such as a better experience. For example, patients may be willing to pay more for the same service from a clinic located in an affluent neighborhood that offers complementary on-site parking, chilled cucumber-infused water in the waiting room, discreet patient care, online bookings, and a dedicated patient care coordinator as compared to a competitor that doesn’t offer such perks due to the perceived added value. While these efforts may be additional costs for your clinic, depending on how they position your clinic next to your competitors, the higher price you can reasonably ask for your services may not only improve profit margins, but also makes your clinic stand out from your competitors without having to offer discounts.
Treat profit like a bank payment. Don’t risk patient care, your brand’s reputation, and your profit margins all for the chance at a short-term surge in bookings. The long-term benefits simply aren’t there to support the risk. Instead, focus on smart ways to cut back on costs without risking quality and aim to acquire high-quality patients who see the value in your services and are much more likely to stick around because of that.
Partnering with a company like Venus Concept has its benefits for boosting profits and getting more patients in the door. With free customizable marketing assets available for download, dedicated marketing support, proven technology with brand recognition, and high customer satisfaction ratings—all under one subscription acquisition plan with even, predictable payments—we’ll help you promote and grow your business without having to discount your services. Contact an expert today using the button below for more information.