How Low Fees Can Cause You To Lose Patients

For every OD who ever worried about losing patients because your fees were too high, that includes me, it's important to keep in mind there is a flip side to that.

Low fees can also chase patients away.

Here are some excerpts from the Gladys Edmunds column in a recent edition of USA Today. She makes the case that low prices can actually scare patients/customers away because it creates the impression of inferior work.

Dear Gladys,

My wife and I recently started our own janitorial business. We have a lot of customers and we are grateful. However, we are constantly questioned about our low prices. A potential customer actually refused to give us work because our bid was too low.

Another customer suggested that we come back and do a second walk-through to be sure we could do the job for the price quoted.

A member of my church suggested we are being taken advantage of because our prices are so much lower than other cleaning companies.

I thought the public liked low prices? Please help me understand this reaction.

B.P.

Dear B.P.,

Setting prices too low can make you look like less than an expert.

Your prices have invoked the "you-get-what-you-pay-for" idea in the minds of your customers and potential customers. They are fearful of what they might get for that low price.

Not all the time, but sometimes it is reasonable to think that if the price is cheap, the work will reflect the price.

Gladys

Jerry’s Take

I agree with Gladys. Consumers definitely make assumptions about the quality of service based on cost. And, if your fees are too low, it makes quality conscious consumers question your level of expertise.

Aim High, Not Low

About 20% of the market makes all their buying decisions based on the lowest price.

Based on buying power and the business model, it's virtually impossible for private practice ODs to win the low price battle against corporate competition that is willing to live on high volume and low margins.

My advice is to focus on attracting the other 80% of consumers, those who make their buying decision based on a combination of value, perception of quality, convenience and price.

That’s a battle private practice ODs can win.

Thanks for reading,

Jerry Hayes, OD

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Disclaimer: The information and opinions contained on this site are for discussion purposes only and are NOT intended to serve as legal, accounting or investment advice. ©2012 Jerry Hayes, OD. Not to be reproduced without written permission of the author.