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E222 | Pricing and What It Says About Your Practice

Sep 10, 2019

On today's podcast, I am joined by Yves Gege and Jerred Moon.  We get into the topic of pricing and how charging more psychologically affects your potential patients.  When it comes to your body, people don't always want the cheapest option possible.  If you're trying to compete with the cheapest options available, you are competing with insurance companies.  When you are charging more, you should always strive to over-deliver every single time.

Episode Transcription:

What's up, guys, Doc Danny here, the PT Entrepreneur Podcasts, and we are in my truck on the way to a live event that we're teaching. To me, Jared Eve, it might be a little loud, but we felt like this was an important topic. We want to be able to knock a podcast out on the way to this event. Actually to breakfast is where we're headed.

We've got, we've got a handful of people in town for a live event that we're doing two days, primarily new. Business owners, in a cash practice, performance-based setting, and they're learning all about the steps that they need to have a successful business, as well as developing an action plan that they can implement over the next 90 days to gain a lot of progress within their, their industry in a short period.

So yesterday, over lunch, we grabbed some beer at the liquor store underneath where we're teaching. And to give you some context. We were in the liquor store looking for beer, and I started walking around looking at the whiskey and all, I don't know much about whiskey. I was just looking at the price.

And as I was walking down the aisle, there was one bottle of whiskey that was, and I think it was $250. Everything else around it was about like 40 to $60. And it stuck out to me. And it was, it was also a kind of an exciting name. It's called Chicken Cock. And for those of you that know whiskey, maybe you're familiar with a

 Chicken Cock. I'm not, and I thought it was genius. I was like, the name of this is very striking. I'm going to remember that you're probably, we're going to remember this, but it was also almost ten times as much as everything else around it. Now I'm borderline like obsessed with this at this point.

I almost feel like I have to buy a bottle just to try it, and I don't even really like whiskey that much. But it brings us back to this topic of price psychology and, and. How important it is to price yourself, effectively, maybe, maybe not, you know, brand yourself, chicken cock or somebody like that.

That's, that's a pretty extreme move. But as you're walking, or as I was walking around and looking at these different whiskeys, I wonder to myself, this is more expensive, considerably more expensive. They, it must be better, is what I thought. And I think that that's a common belief for most. As people, when it comes to pricing, anything. And, and this relates to what we charge, right? So often, and this is what we saw yesterday, most people were, what range are they going to eat? Like 120 to $140

Yves: [00:04:39] under 150

Danny: [00:04:41] yeah. So under 150, which is where most people in cash setting are at. So if you're looking at pricing, okay. Look at it from the lens of the consumer and the consumers like, okay, this person is 120 this person's 130 this person's 125 this person's 200 Holy shit.

That's a chicken cock. That's the way I want people to think of us as the chicken cock of whiskey. Physical therapy is what I was what I want, and I want them to be like, why are they $220 a visit and everybody else is 120 not, Oh, I want to be the cheapest. I want to be the most expensive because I think we can fulfill that. I believe our product is excellent. And if you can put yourself in a position where psychologically people almost take a step back, and they're like, wow, that's different. That's way more expensive. It must be better is what most people think. I'd be interested to hear what you guys have to think about this or have to say about this too because it's not just service or products.

I mean, it applies to anything. You know, any commodity, any product service, your, you're going to, you're going to get tickets. Maybe associate something more expensive with being better? What do you guys think?

Jerred: [00:05:55] Well, one thing that I think, you know, pointing out with charging more, I think that that's like a psychological hurdle for people most of the time.

Right? Like I just said, I recently got into cycling, you know, doing it a lot more frequently, getting a little bit more serious about it. And I was talking to this guy about some like small parts I needed on my bike, but he's just, he's just a guy who works at the bike shop. Right. You know nothing about me.

And he was, he kept trying. Like, I needed some new stuff, and he kept trying to like, tell me the cheapest way to do do it. He just kept offering all these like bandaid solutions. I was like, I want like,

what's going to work? I probably want the best thing in all honesty, like whatever you have.

And he's like, Oh, well, that's going to be this.

And it's like my most expensive thing. I was like, that's fine. Like that's what I want, you know? But he was putting his like his mentality of what he would probably want to buy or,

or could afford,

like onto me. And I'm like, dude, I don't want this like thing that's going to. Break-in three months. I want something I want to kind of buy is going to last forever.

And when you talk about the human body, in the same way, there are some things that you, you want to price incredibly low, get it as cheap as possible cause it doesn't matter. You know, something that like a, like a plastic cup, like who, who?

Mustard mustard, who cares?

But when it comes to your body and other things, like I don't want the discount version of anything.

And you don't want to compete in the lowest healthcare

format like that. That seems like a terrible

place to be.

Danny: [00:07:21] Definitely.

Yves: [00:07:22] Yeah. No, I agree. I mean, you said something that kind of hit home for me yesterday, and you said you kind of can be the cheapest or you can be the most expensive, or you can compete with everybody in the middle.

And I thought it was cool to kind of be that loose, expensive piece because you don't want to compete. You're not going to be able to compete with the cheapest, which is insurance-based care. Right, right. And you. It could be just because of the inherent value that you just talked about like only you said, I want to try some chicken comp.

Do you actually

Jerred: [00:08:00] have to get it out there?

Yves: [00:08:02] But yeah, you just, you mean you want to be priced there because I think it's a huge strategic advantage and also what needs to be said as you need to fulfill on that

promise.

Danny: [00:08:11] Right.

Yves: [00:08:12] You know, like you don't need to be a high priced whiskey, and then it tastes like that.

Not that I can tell him. It's like physical therapy. You price yourself, though. We used to be filled out everything around what that takes to be the highest quality of service. I mean, that's what keeps you in business.

Danny: [00:08:30] Yeah. Well, I think that's where people get, they get hung up is the fact that they might not be confident enough that they can provide a service that they feel like it equates to the price point that, you know, they might want to charge.

But, but I look at that a different lens. If you set your, your pricing, at a place where it makes you feel uncomfortable to say out loud, this was the advice that I got when I got out. I wanted to charge, and I was going to cost $150 a visit. And, I, Kelly said, like, if you charge $150 visit, you can't work for mobility wise.

Like you just, it's not going to happen. You can charge more money than that. It's like you're undervaluing yourself. And he's like, you have to cost $200 at least. And I felt very uncomfortable that, so I met him in the middle of one 75. We first started, and, and, and even in Atlanta, that was, that was the most expensive, cash practitioner.

There weren't many at the time, but that was probably at least 50 to $75 more than the next closest person. And, but for me, I always looked at it like, man, I have to overdeliver for these people. I felt very obligated over delivered to feel like I wanted them to feel like it was a steal at the price point that, that I was at.

And. You'll feel like that to this day. So even when we're at, you know, two 20 a visit, we've, we feel like we have to go above and beyond. And, and, and honestly, we talked about this yesterday too.

What people don't realize is, in many cases, that is significantly cheaper than many of the other routes that they're going to go.

Like Jared told a story about, you know, hurting his foot and having to see a podiatrist get a, and he got a brace, and he didn't wear, and it was $800 bill for like 15 minutes. Yes. Or whatever at the doctor's office. So what's that equal per hour? You know, that's a ton. You, you'd have to see us almost four times to get the same, you know, a bill from us.

And it's also very transparent, not coming later. So like there's a lot to be said for what we do and the value that we provide. I think the hurdle for many people is they don't feel like they are worth it.

Yves: [00:10:32] And I agree with that. We did like the deep dive on what patients care about, kind of for like a staff meeting.

And it's kind of surprising, like of course your outcome matters. But you know what the main list of stuff was? It was like timeliness. It was like a right looking, waiting area. It was like friendliness. It was all these things. And I think, I think the outcome was like number four or five, right? Of like what patients genuinely care about.

So like we think that the outcome and our manual skills and like how good we are as the most important thing when it's not. And it's maybe a hard pill for some people to swallow or it's like, Oh, my clinical skills are what matters. And like I'm just a. You know, I'm a manual therapy Ninja, or I'm looking excellent like actually, it doesn't matter.

It matters, but not as much as you think, you know. And I think to go to that next price point is not like more clinical skills. It's the touchpoints that you're talking about, like customer service. I think that's, that would be the only differentiating

factor. If you're like, I'm just going to charge more, and you're not taking care of the people.

And I'm not talking about taking care of them from like performing the services. I'm talking about like following up. For them and like showing them that you care.

Jerred: [00:11:44] All of these touchpoints of just having good customer

service, I think that is alone is what could demand a higher price point.

Danny: [00:11:51] Yeah. Yeah, and I think it's also important to realize that when you put yourself in the middle, it is harder. It's, it's super hard. Like if, if you're the same price as six other people in your area, what's going to happen is they're just going to look for the one that's the most convenient typically.

Then. And you can't be the most convenient for everybody is you just can't. So as you look at, you know, your business, you kind of end up shooting yourself in the foot and becoming somewhat of a commodity and commodities based on price and speed. You so rate of—result, but also the speed of them acquiring that service.

So getting to you, and that's not a that's not something that I want to have to compete on. I'm sure it's cool to be convenient, but we have people drive across the city to pay us that much. Why? Because they feel like we're the best at what we do and we feel like we're the best at what we do, or we have to be able to represent that.

And that also drives, like he was saying, a lot of additional thoughts about how you're, how you're delivering something. We do spend a lot of time on clinical skill set as well. We feel like always, learning more is essential. Continually being on as the front of the profession in whispers technology goes.

We always are looking for like, and people love when you have like cool shit in your practice. You know, like when we first added blood flow restriction cuffs, the Delphi cuffs that Johnny Owens came out with, I mean, people didn't quite understand them. They just knew that the only other places that they had.

Then we're like the Braves, the Falcons, and the Hawks and us, and as one of their clinics, the other side of town, there's like five people in the entire city of Atlanta that had these cuffs were one of them at a time that there are a lot more now. But then we were looking for what's the next cool thing that we can add-in?

What's the next piece of technology that can help us? What's the following technique that can help us and always kind of striving to, to, to be there and be better is essential. But we also focus so much on, yeah, what does, what's the communication look like? How many times we follow up with them. You know, are we thinking people correctly?

Are we writing a handwritten note? Did, so we talked about this yesterday, like the value of a 55 cent stamp, like how much that can do for your, your practice, these little things that if you want to charge more money, you have to be able to deliver a significantly better service. It's like Disney, right?

Like, you could make a strong statement that Disney, like their brides, kind of our lane compared to lots of other theme parks. Like if you want to go to like, you know, bigger rides where like, you go to universal. Yeah. And there are a lot better, right? Like they got faster rides, whatever. And Disney, what's the best thing?

They have it like a magic kingdom. It's like little, but that was it called space mountain. Yeah. That's a lame ass roller coaster. Let's be honest. Like, it doesn't do much, you know, for my kids, it's somewhat cool. But for me, I'm like, this is kind of weak and, but that's not what it's about. It's about the music.

When you walk in the smell, you know, the consistency of branding with all their movies and everything online and their streaming service they're coming out with, it's probably going to. Blow up in November that they're, they're, you know, they're coming out with. Like this generational experience that people have SWI they're so Bulletproof when it comes to their business, you know, and you have to look at your business as, how do I create this experience that is just overwhelmingly positive.

It makes them feel like they're in the right place and gets them a result that they're looking for, you know? And, and, and that they trust in that process.

Yves: [00:15:16] The price situation, I mean, we've worked with over 60 owners, right, are about 60 business owners and raise prices on nearly everybody, let's say 99% of them.  And I've never gotten a pushback, and almost every single owner has grown, and I don't know about you, but I've noticed that too. Every time I raise my prices, my business seems to grow with a little bit. It does not look worse. Now, this was what people think, right? That people believe that if I raise my prices, fewer people are going to come in.

And I've noticed honestly the exact.

Danny: [00:15:51] What role a couple of things happen, right? So like number one, you differentiate yourself, so now you're in a different conversation, a different bracket. Also, your profitability improves. I mean, I mean, some of this, you need to reinvest in the experience and the people and all of that, but like if you change your price point by $50 per visit, that's a massive difference in terms of profitability.

You know, in that profitability, it puts you in a place that's much different because. Allows you to do is make better decisions also on what's best for that, that person. So like we have people like, this is a pretty good example in, in terms of this, like, if we didn't charge what we do, we would not be able to, like, if we have somebody come back to see us and they'll say their progress has stalled, right?

We can say like, all right, cool. Let's reevaluate this or spend 30, 45 minutes with you, and then we're going to get you over to see this sports med doc. But we're not going to talk. For a visit today because we need to get you to the right place. We just want to make sure we're on the same page.

And I started doing that. It was tough for me to do that early on. I just felt like it was the right thing to do.

But just us doing that, we've gotten so many additional patients from the simple fact that we're not trying to nickel and dime people. If we weren't charging enough money to put herself into a profitable business position to make these longterm patient decisions, we wouldn't be able to do that.

I'd be if you're just. It's like struggling for every dollar. There's no way in hell you'd be able to do that. You wouldn't, and you wouldn't be able to pay your bills. And for us, it's really like a no brainer. It's like, all right, well what we want somebody to do with our parents, you know, like how we want them to be, treated if, if they were kind of like their progress was stolen and they needed to move onto the next step.

So just as something as simple as that, it allows you to do other things. People or we have like some scholarship spots that we have for. Youth athletes whose family just, you know, it doesn't have much in terms of financial resources, and we can sponsor them and work with them for free because we have the financial stability from the pricing and the revenue within the business.

So if you're not charging what you're worth, you're, you're stopping yourself from being able to help even more people, you know, and people in a unique way. So I think it's, it's a no brainer. We always, I think it's one of the first things we have people do. I mean, when you do onboarding calls with people, it's probably.

90% of the time. Yeah.

Yves: [00:18:13] And they know it's coming too, which is the best part. Cause we talk about it quite a bit. I think what Jared said also, is the, and it's 100% the provider, you, the physical therapist, your mindset about money, not other people. Like that's what's stopping every, you know what I mean? Like there's no other excuse, and it's just, we've got to find a way on the Jared, do you have some insight on this?

But like finding a way to get over that mindset piece. Like how. You know, you, as a provider, can say, I just need to charge it. I mean, some people would only make them do it, and they come to the group, and they're just kind of forced to do it, and then they realize, Oh, this is awesome, but you know, maybe you're not the group.

I'd be curious like, well, I mean, if you have any input, there are certain things like things I hear a lot are like, Oh, that wouldn't work in my market, or something like that. How do you even know that? Like how do you like, I don't understand why people think that there are such ridiculous experts in their market or local area.

Like, you know, how much. How many data points you'd have to crunch to know that definitively. So most people, when they say that, I know that they're entirely pulling that out of their ass. They're like, yeah, well, that would never work in this place. And I'm like, well, I don't think that you know that you haven't tried it.

So I think just doing it helps you change the mindset and guess what? If it fails, if you like to raise your price point and you for some reason, you get no new patients at all, guess what. You can lower your prices and be like, and I made a mistake. It's not like you're, you built a, you know, a house out of concrete that's like, Oh well shit, I'm screwed.

You know, you could go back, but you're

Jerred: [00:19:48] probably not going to have any issues. You're going to change your mindset. You're going to make more money. And when you make more money is like Danny said, it gives you more space, gives you more space to pause and be like, okay, I don't have to worry about getting ten new people right now. Like I can take care of these people. I can spend more time with them. It just gives you a lot more freedom to run your business better.

Danny: [00:20:05] Well, we think people are sitting online watching our, everything we're doing like they don't honestly think about this as just a busy person. You do, you sit online. I just like it.

A company you're thinking about maybe working with, do you watch everything that they do and you're just like keyed in on everything, and there's this $10 price adjustment. You're like, motherfuckers you wish they were doing. Yeah. If they were doing that, yeah, you would be, it would be amazing you, you would be Netflix.

All right. They would know like it would be national news if they changed their pricing significantly. Nobody knows or cares what you're doing. And most people, especially new people. They don't know what you charge. You know, they just know they want help on something, and it's, it's shocking. I remember when I did this with Kingsley and our mastermind, like where he was charging, know he didn't want to raise his rates. And I S I told him, I said, look, man, the next new person you talked to say to him that price point is this. And if they say that that's too much and they can't work with you, I will give you the amount of what that hour would have been.

I think it was like $180, something like that. And he called me after he talked to this next person and that person on the phone bought a ten visit package, with him for that new price point. And he was like, Holy crap, it worked. And I was like, dude. You just got to now he has confidence in it and makes, makes the change.

I think that's a big part of it as confidence, from somebody. First thing. Yes. Like the unknown is that first person, the first couple of people. But after that, when it's, Oh man, this is working. Probably better because now you've separated yourself somewhat. It's, it's a, a ton of confidence that comes with that.

So ideally, and kind of moral of this podcast and summarize it, charge what you're worth. Be the chicken cock of your area. That's I ideally, and, and, and, and put yourself in a position where you're not fighting against everybody else as a commodity and be able to fulfill on, being the most expensive in the, in the premium option.

I'd much prefer to have to put myself in that position with some, some pressure, on that then be mediocre, average, and just work with the people that are near me, that maybe aren't even as bought in as, as you would like. And that's it. So we've got to get breakfast. We'll talk to you guys soon.

Thanks for listening.

Do you want more cash, PT, biz help? If so, get a copy of my book. Fuck Insurance. It's your playbook—so successful performance, PT practice, and never having to deal with insurance again. You can get a free copy at Finsurancebook.com. Inside this book, you'll learn the direct techniques that we've used to become one of the fastest 100% cash PT practices in the country.