When I was in practice, I had a price book. It listed over 300 instruments (I kid you not) and it had the retail price for each one based on my markup formula along with the basic info and cost of each instrument (comp/ features/ style/ fitting range, channels, etc.) Many times a patient disagreed with my instrument selection saying, “I want a Pooptone hearing aid. My friend tells me it’s the best one ever made!” or “I saw an advertisement by “World’s Best Hearing Service.” I always consulted my book in front of the patient and showed him/her exactly what the difference was between my selection and what they thought they wanted.
I almost NEVER chose the cheapest and very rarely chose the most expensive. I related my choice to them based on both the test and their specific hearing needs and how they matched or didn’t match the instrument’s power, freq. response, compression, and other features. I never chose instruments for a patient based on what I perceived as their financial condition!
All of the instrument information was in the book so I could consult “The Authority,” my book. It’s hard for a patient to argue with a book. This approach worked well and the only negative comment I received was, “Why didn’t you choose a ‘better’ instrument for me. I want the higher price aids.” There was never any negotiating on price. This was due in part to the fact that the price was printed in the book for them to see; it was not a number pulled out of thin air, and that I never advertised discount instrument sales.
The bundled selling price of each instrument in the book was determined by adding a set dollar amount (markup) to its wholesale cost and rounding up to the nearest ten dollars. The markup did vary a little bit since I had three instrument categories; Basic, Mid-Level, Advanced.
Here are hypothetical examples of how I did my pricing:
Wholesale cost is $340. Technology level is Basic: Mark up is $400. Retail is $740.
Wholesale cost is $445. Technology level is Mid: Mark up is $500. Retail is $950.
Wholesale cost is $618. Technology level is Advanced: Mark up is $700. Retail is $1320.
The higher markup that I applied to more expensive instruments reflected the fact that they frequently took longer to fit and follow-up, due to their adjustability, etc.
The above numbers are not meant to reflect actual costs but to demonstrate my approach to pricing. Some people use a percentage mark up system and others use an “X” times cost approach. Whatever your system, I believe its important to have your pricing written down in black and white so your patients can see that they are being charged the same as everyone else for a specific instrument.
Sometimes people asked for a senior citizen discount. The answer I always gave was simple;
“Most of my patients are senior citizens. If I gave you a discount, I would have to do the same for all my senior citizen patients, and to do that I would just have to raise my prices 10% so I could give everyone a 10% discount.”
Your comments or questions are most welcome.
