Raising Prices

Hi, this is Dave Kats with Therapist Consultants and I have a tip for you. Every so often you have to think about raising prices and we hate to do it. We procrastinate. We don't know how much to do. We always feel like people are going to leave us but that's not the case. I find that virtually no one leaves you because you raise prices. In fact, I have people that go from 100 to 125, don't lose one person, 125 to 150, don't lose one person, 150 to 175, don't lose one person. You've got to think about this. If you go up 50%, if you go at $50, I should say, and you are seeing four patients and one of them quit, you're still making just as much money seeing the three patients at $50 more than you were seeing the four patients.

I just tell you that it's important that you raise your prices on a regular basis. Now, here's what we suggest. We suggest that you raise your prices less frequently but more substantially when you do and here's why. The only people that really are concerned about prices are those people that have been with you through two or more price changes. If they're starting you're at 150 and you go to 175, they're really not going to say anything, but they started with you and you went from 100 to 110 to 120 to 130, pretty soon they're going to feel like they're getting nickel and dimed to death. Raise your prices less often but more substantially when you do.

Here's how you do it. You just post a card at the front desk, a three-by-five card that says "Effective." Then you put the date, like, "Effective October one, the cost of the session will be $175." Leave that up for about four weeks. Take it down when you're done. If anybody asks you about raising prices, say, "Yes, every few years I raise my prices according to inflation and increase in overhead." I'll tell you, you should go ahead and do it. It's the only thing you can do that's clear profit in your practice. If you see a hundred people and you raise it by $25, you made another 2,500 this month. That means you made an extra $30,000 at the end of the year.

Make sure that you do a good job in getting your prices up where they should be as soon as you can. This is Dave Kats. Thanks for listening.