One of my favorite practice managers, Charlie Sheridan of Marina Plastic Surgery, just shared with me new data showing consumers increasingly favor value pricing over trusted brands.
Deloitte’s 2013 American Pantry Study, concluded consumers remain “cautious (and) resourceful” even as the economy emerges from the recession.
“In our survey we found more careful consumers who feel smarter about the way they shop and are remorseful about their prior wastefulness. They do not feel they are sacrificing as they continue to look for ways to save. Loyalty card usage is growing and coupons do not appear to be a catalyst for unplanned purchases.”
While six key implications are called out by the authors, three in particular should resonate with elective healthcare providers:
- Frugal attitudes and behaviors have endured
Be sure you and your staff offer cost-cutting non-surgical alternatives to common surgical procedures for patients on a budget looking for aesthetic improvements. Consider whether price-based advertising (deals and discounts) will play a role in your practice. If you’ve been considering a loyalty rewards program, this may be the time to get it rolling. - Selective loyalty among “Must-Have Brands”
While loyalty overall is down among consumer goods, some brands, like Apple, remain must-haves. Brands known for quality and innovation lead this pack. What will you do to be the must-have surgeon in your market? - Consumers are embracing technology
Consumers are getting smarter about shopping for services. More and more consumers use online ratings and reviews. That means reputation management should be a core part of your online communications strategy.
What does this cultural shift indicate? Practices stand to profit if they:
- Remain focused on the kind of surgical and service qualities driving positive patient reviews
- Include value-priced non-surgical services on the menu, giving options to patients and prospects
- Introduce programs rewarding and encouraging loyalty
Most of our clients are already increasing promotion of non-surgical services and are paying more attention to reputation management. Very few, however, have started integrating comprehensive loyalty programs into their patient retention mix. The time is right to take the next steps.
Dear Ryan:
First and foremost, thank you for the kind reference.
Now to comment:
In my entire career (well over 25 years) I have never seen consumers so poised for “deals.” They are clearly responding to packages, insider-offers, and on-line specials. While I cannot say this is a sudden change in trends, I can say this slowly-evolving trend is more real than ever, and very likely, here to stay.
Whereas I once saw “Loyal-for-Life” mentality, I now see “Loyal-in-the-Moment” consumers who feel they have a plethora of options and that the depository of their discretionary dollars will have to be well earned.
Heightened awareness, advanced education, internet research, retail price-matching, and group coupons are all contributing to this trend. Take for example T.J. Maxx, who has made a fortune suggesting that being a “fashionista” includes being a “maxinista” …a person who is money savvy and knows how to stretch a buck while not compromising on quality. In simple terms, it’s COOL to be SMART by knowing how to get the most from your money.
This trend is not being forecasted by me; I am merely a messenger for what I witness first hand, almost daily. Patients ask me if there are any “specials” they may have missed. And, the response to treatments that are offered with a coupon incentive by far receives more consideration and activity than those that are full/regularly priced. In fact, my clients openly share that they will wait for that much needed service until it is offered for less. And indeed, once I incorporate a coupon, they flock in droves to “look great while saving money and feeling smart about spending it.”
So, it is two fold as I see it…consumers are not willing to give up aesthetic improvement, but time it in accordance with their budget. Having said that, I feel it is essential that a practice offers services with a range of financial options and results. Then a good PC can pair that client with a treatment that fits their needs AND budget THAT DAY..and not lose them all together (waiting for a potential future deal).
This can be easily managed with a well seasoned staff member who will openly share all options (from varying results and varying expenses). Furthermore, it is wise to offer surgeons that can match various demographics, needs and budgets. This can be handled by offering tiered fees for physicians — ranging on expertise and years in practice (Senior surgeons command higher fees than newer associates etc). Thereby fulfilling everyone’s needs, and everyone’s financial limitations and budgets. After all, hair salons have used this business model for years (the head stylist commands higher fees and retains his/her loyal following) while incorporating new clients at more affordable prices with new stylists.
So, the question each practice must ask themselves is: How do we keep our customers loyal to our practice? The simple answer: Be smart, creative, and adapt a tiered business model that periodically offers some financial incentives– yet NEVER compromise on quality, care or professionalism. If you do not examine your willingness to be somewhat flexible, you can potentially lose a client who will shop around for another qualified surgeon who may be more affordable.
Like I always say: It’s better to have 80% of something, than 100% of nothing.
~Charlie Sheridan