E523 | One Tweak To Sell Bigger PackagesJul 28, 2022
When we look at the businesses that we work with, they tend to have a single visit rate and a package rate. Selling packages is a great way to get people to commit to a plan of care. Today, I am giving you a way to sell bigger packages that will generate more revenue for your practice. Enjoy!
- Knowing your average visit rate
- Looking at things from the consumer's point of view
- Increasing lifetime value
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Danny: So I was having a conversation with one of our staff members about documentation and he had come over from a in-network practice that he was working at and he was talking about just how long it would take him to document and click through and the workflow and how, just how time consuming it was and how much easier it's been with the software that we use, which is PT everywhere.
And I know for us, we're very aware of. Sort of time leaks within our staff and our own schedules. And it's just one of the worst things you can do is just waste time on things when you could be doing them more efficiently. One thing for us is we have to document. It's something we need to do and you need to do it as efficiently as you possibly can because that's where you're gonna save a lot of your time.
We were seeing our staff members save upwards of an hour a day as far as cleaning up his documentation, making it more efficient. What if you got an hour of your day back just from documentation? What if all of your staff did the same thing? Highly recommend you take a look at PT everywhere.
It's been a huge time saver for us and really has made a big difference in our efficiency of our practice. You can check 'em [email protected]. I think you're gonna really like what they have to offer. So here's the question. How do physical therapists like us who don't wanna see 30 patients a day, who don't want to work home health and have real student loans create a career and life for ourselves that we've always dreamed about?
This is the question, and this podcast is the answer. My name's Danny Matta, and welcome to the PT Entrepreneur Podcast.
What's going on, guys? Dr. Danny here with the PT Entrepreneur Podcast, and today is gonna be super tactical. We'll call it Tactical Thursday. Maybe that's that'll stick, but super tactical information. Just honestly based off a conversation I recently had with one of our mastermind members and going through his structure of pricing.
So when we look at how most of the businesses that we work with are pricing, they tend to have a single visit rate, and then they tend to have packages. That they that they sell in order to, essentially pay it in full or get people to commit to a plan of care. And this individual in particular does a lot of post-op ACL work.
Like it's about half their business. So a really good niche for him. A lot of volume per person coming through. And when I was chatting with him, we were talking about where he is at in his average visit rate and and how we could help improve that. And, the thing with selling packages is People can get a little freaked out by talking about money, especially when it's a decent amount of money.
So in this scenario, let's say you have a 20 visit package that you're selling that you know, you're working with people that have acl post-op work that they're doing over the course of their rehab. Obviously it's probably gonna be more than. 20 visits that you're gonna need to see them for, which we'll get you in a second.
But let's just say that's what you're doing. And let's say your average visit rate for a 20 visit package is $155. So that's gonna be $3,100 for that package, for somebody to be able to to work with you, in that capacity. So for 20 visits it's gonna be 155, dollars a session.
Over, those 20 visits that you have. So when we look at a price raise and how you can do that, you can do one of two things. You can say, okay, let's go from $3,100 for the package. If it's 1 55 a session to 30 $500, which would be $75 a session. So if you have 75 bucks versus 155, the difference there.
Is gonna be a total of $400. So you're increasing the front end value of that client by $400. But when you look at the the amount that's spread out in a way that you can offset some of the burden of a package like this, it's by breaking it up and spreading it out over a few months. And when we were talking.
The provider that I was chatting with said that the four four month timeframe is typically what those 20 visits are used during, and that almost everybody just spreads it out. So instead of them paying completely upfront, you know they're gonna pay. Over the course of four months. So in this scenario, you go from a $3,100 package.
If they're paying all that upfront to paying $775 per month for four months, that's sounds a hell of a lot more appealing. Less of a burden than, $3,100, all upfront. And when you look at like monthly payments, most people, and you probably do this as well as a consumer, most people make their buying decisions based off of monthly cash flow, more so than the total cost of something.
So if you're buying a car, for instance You know what? What you're gonna look at, probably more than anything, is not necessarily the actual overall price of the car. That might be a big part of it, but it's gonna be, look, what's the monthly payment, right? Same thing with a house. You're gonna gauge what you can afford on a house based on what you can pay on a monthly basis, versus paying for all that upfront, which obviously, you know.
Nobody's gonna do most people will not do right? They're gonna get a mortgage. Almost everybody has a mortgage and they pay the house down. So when we're looking at bigger packages like this it's like such a good ideas, such a better way to go. If you can spread this out for people because they're gonna commit some more visits.
They're not gonna have to eat all the cost up front. But if you're doing a really good job of fulfilling, and when I asked this guy, I said how many issues are you having with, actually like getting payments as people are going through that. And he said zero. Haven't had a single one and we really haven't either.
When we would do this with 10 visit packages and spread it out over three months. So same thing with them. If they have 10 visit packages, three months for a 20 visit package, it is four months. But when we look at the math on it, and what I want you to think about as a consumer is if we're trying to take this from $155 a session to 175 And we look at the math of that.
That's the difference between a $3,100 package and a $3,500 package. But over the course of those four months, the difference is either a payment of 7 75 or a payment of 8 75. Per month. 7 75 would be if the average is 1 55 a session, and then 8 75 would be the average if it is 1 75 a session. So it's a difference of $20 per session or $400 on that client increase in their front end value.
That's a significant amount of, frankly, just profit. It's not like there's additional cost associated with that's just profit. And if you're a consumer and you're looking at this, or let's say, you have a. A teenage, child. Let's say there's a, your daughter has ACL surgery and you really want her to see, this one group.
Cause that's what they specialize in. Are you really going to, really even think of much of a difference? If it was 7 75 or 8 75, would you say, yep. That extra a hundred bucks a month, I just can't, I'm not doing it. Probably not. Like it's probably not even gonna even matter to you until it's over a thousand dollars because there's four digits instead of three.
So as you look at this and the buyer psychology of some of some of how they're gonna make decisions on what they're paying for. The idea of spreading it out and creating payments out of this is actually like such a good idea for this niche in particular. Because the other thing he said that I thought was interesting was four months for most aco, work like, you obviously want more than that.
It's probably gonna be twice that. And he's yeah, for sure. And they just roll right into paying that monthly payment for then the duration of the rehab process. So it's not just one package that they're basically selling up front. The vast majority of those are gonna be two that they just keep spreading out.
Over that eight month window. So in this scenario, you're talking $7,000 is the value of this client. And you're doing that. If they had to pay all that upfront, that would be a hard. Thing to swallow. I think for a lot of people, like the cash to do that would be hard versus committing to a certain amount per month over a period of time to really help, your kid get over a pretty nasty injury.
So something to think about if you have bigger packages, 10 visit plus packages, and you're struggling a little bit with the front end sales side of things, and you feel comfortable in accepting payments with the people you work with over a longer period of time, look at spreading it out.
See what that. That payment would be, and really being able to sell more of the monthly payment over this set duration of time versus the front end payment. Obviously, hey, if you can get that cash up front and you feel really comfortable with that, go for it. Cause that's better for you anyway. You got cash in hand, like they're, they can't back out of that.
They can't leave. They have to finish their plan of care. It's better for the business, better for the findings of the business, but for these bigger packages in particular, spreading those out and making it almost like a. A short term recurring revenue model I think is really smart, especially with certain niches.
So something, think about, remember people make decisions based off of monthly cash flow more so than total price. And if you can bake that into what you're doing with your practice, it can be a really good way to, increase the lifetime value and particular the plan of care value of a front end client especially in niches like post-op care.
So hope that helps. As always, guys, thanks for listening. We'll catch you next week.
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