Can Your Practice Do Demand-based Pricing?

What exactly is demand-based pricing? It is essentially variations in cost relative to the desirability of a specific day, or time
toll road sign of day. For example, rental car companies charge more on weekends. Some toll roads now charge more during rush hours.  Airlines charge more around holidays. Hotels do too, and sometimes you have to make a non-refundable prepayment.

This pricing principle could easily be applied to dental practices.  In a previous blog, I discussed how important it has become to have convenient hours–evenings, early mornings, and weekends–as dentistry becomes more competitive.  Sometimes I will meet dentists who say, “I’ve tried Saturday hours, but I get a lot of no-shows, even with longtime patients.”

My suggestion is to tell patients, “If you want to book Saturday, that is in high demand, so we require prepayment of the appointment.”  People tend to show up much more if they have pre-paid, especially if they are going to lose the money. (You can always waive that if it’s a good patient or a valid reason.)  And if they don’t want to pay it, then they don’t take the valuable time slot and instead schedule themselves into your regular workday.

And, if you’re finding that the evenings and early mornings are booking out months in advance, maybe you increase the fee for a prophy at that time of day.  Basic economics is to see what pricing the traffic will bear.

Many dentists using CEREC charge more for those restorations, even though it takes them less time overall.  Why? Because it’s more convenient to the patient.

Will this type of pricing turn some people off?  Maybe. But it’s not the first place they’ve experienced it.  Convenience costs more almost everywhere. But you only have 35 hours a week to deliver dentistry, so why not make the most of those hours, and make sure someone is in a chair as often as possible?

Also, sometimes team members resist working those hours, but if you have demand-based pricing, they can too. Pay them extra per hour for those time slots.

Other pricing variations:

  • Prepay for two prophys and get a reduced price for both (this should also tighten your recall, as they have to use them within the year)
  • Prepay for two prophys a year, get a third one at no charge (more visits mean you do more dentistry)
  • Lower pricing for weak slots in your schedule that tend to sit empty
  • After-hours emergency surcharge, paid by credit card over the phone or with cash before you start treatment

Will these work in every practice everywhere in the country?  Of course not.  But some of these ideas may be just right for you.

 

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One thought on “Can Your Practice Do Demand-based Pricing?

  1. Great idea, the only thing I can see people arguing about say for prepaying at Sat appointment. “Why would I pay it out of pocket, I have 100% preventative coverage”. I guess making a requirement would be the only way.

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