How do you set your 2010 prices?

An orthodontic client and friend has emailed to ask for a review of the existing price list as we approach the new year.

Attached to the email was a detailed breakdown of products and prices, with a request for my opinion.

Here’s my reply:

The fact is that the list is unintelligible to the patients – who are looking, in your case, for an orthodontist/treatment co-ordinator that they trust, respect and like + an environment and customer service experience that makes them feel special.

I could have sent my daughter to the local orthodontist (5 minutes drive) but I sent her to you (90 minutes drive) – for all of the above reasons (especially the first).

I wanted my daughter to feel special when she visited you and to feel equally appreciated by the fact that I have invested in her private (and invisible) treatment.

Everywhere I go (even in practices with a heavy NHS commitment) I’m hearing that when parents are given the time to consider the advantages of private ortho for their kids, they are taking it in increasing numbers.

So your price list is created by reference to two factors:

1. Minimum = the hourly rate you must achieve and

2. Maximum – what you think/judge the market will bear (the emotional price resistance level).

The minimum is easy to establish – the time honoured route of (annual cash flow forecast = gross annual sales target/number of clinical hours in the year).

The maximum is more delicate as for a GDP it can mean the advantages of quadrant dentistry and/or multiple unit work – or it can be a level at which a significant number of people say “no” – you wait for that signal and then drop back a bit. Not pretty but it works.

All of the individual calculations on your spreadsheet are the means by which you arrive at the total – which is what counts.

So I’m going to be infuriatingly “coachy” and ask – “how do you feel about your prices right now?”