Client Acquisition at What Cost
By Angie Dubis on Nov 20, 2015
The costs associated with opening and maintaining a practice can be daunting regardless of circumstance, but they often become downright overwhelming when you see a bunch of blank spaces in the appointment calendar! Even with the best marketing plan therapists can find attracting new clients difficult, this can be especially true for new practitioners who have not yet established themselves in the industry or therapists who are new to an area.
Many therapists are resorting to using discount websites such as Living Social or Groupon to try and get new clients in the door. This type of marketing offers wide exposure to the market place and can certainly rapidly increase the number of booked appointments, however, therapists need to have a clear plan of action before taking this step as there are many potential pitfalls to such an endeavor.
A few things to think about:
Discount sites often require a minimum markdown from the therapists’ going rate, typically 40% to 60%. If you normally charge $80 per hour, you would be offering the same service at $32 to $48 per hour. Now you have to factor in the discount websites cut of the action which can be as high as 40% to 60%. That means on the session mentioned above you may take home anywhere from $12.80 on the low end and $28.80 on the high. If you happen to sell 100 of these discount sessions your top end gross profit would be around $2880 before taxes. You also have to remember that you don’t get paid all at once. It typically takes 15 to 30 days after a promotional voucher has been redeemed for you to see the money.
- Raise your regular rates prior to offering your promotion! Make sure you update your website and brochures with your new prices as you are often required to present both as part of the setup process. If you charged $100 instead of $80 in the scenario above you would offer services at $40 to $60 and net $16 to $36. If you sell 100 sessions your top end gross profit increases by $720.
- Negotiate your contract!!! The discount sites need inventory. You are providing them with that inventory. Without business owners like you, they do not have a business. Remember that! They will certainly try to get as big of a cut as possible, but they will come down if you stick to your guns. Don’t sign the dotted line too soon and be willing to say “No, thanks.” a few times.
One of the biggest struggles with a successful campaign is the sudden influx of appointment requests. Just fielding the phone calls and emails can be overwhelming. Then you have to fulfill all those sessions.
- Implement a mechanism to allow clients to request appointments online. This could be via an online scheduler or email contact form. Fielding scheduling calls could be a full time job if your promotion is successful, so it is best to automate if at all possible. Plus, you want to avoid bad reviews and difficulty scheduling is one of the top complaints purchasers cite.
- Limit the number of promotion appointments you fill each week. This helps you avoid burnout and resentment. If you run a deeply discounted promotion, work your butt off and then get a check two weeks later for $500, you may find yourself feeling a bit uninspired. By limiting the number of promotions you redeem each week you leave room for existing clients and new referrals.
- Limit the number of available promotional sessions you offer to a reasonable number, especially the first time you give it a try. This helps you learn and refine your process. Make the system work for you, not the other way around. By limiting the available inventory you can better manage the results, after all, you can always do another round if you are successful. You also minimize your losses if you hate it.
The Fine Print:
Every promotion has fine print and you need to really think about what is important to you when you write yours. Both you and the customer are bound to these terms. Once your promotion is live, you can’t change them.
- Make your promotion available to NEW clients ONLY! The whole point is to attract new clients, not lose money on existing ones!
- Limit the number of promotions that can be purchased to no more than 3. If you are being bargain shopped it will take 2 to 3 sessions for the client to develop loyalty to you and the service you provide. If they do, they will be willing to pay a high price to continue seeing you. One session may not be enough time for the client to connect.
- Require that all promotional offers must be redeemed by the same individual. The point is to develop a relationship with a new client. You need them to return in order to do that. Under special circumstances you can always make an exception, but use the fine print to protect yourself.
- If you allow additional promotions to be purchased as gifts, specify that only X number (however many you limited the offer to) can be used by the same person.
The goal is to get and retain new clients. Some of the people who redeem your promotion are going to go buy another discounted offer instead for paying your full rate. This is to be expected, however, some are going to like your work and value the professional relationship between therapist and client. These are your targets and you want to keep them.
- Do not treat clients redeeming promotions as “lesser.” I know this sounds like a no brainer, but it happens without you even realizing it. You can find yourself thinking “I am only getting $25 for this therapy.” This thought process can result in you taking less care, being untimely or just not connected - it defeats the point.
- Offer a special return promotion that is between the super discounted price and your regular price. This allows the customer to feel like they are still getting a deal and you get paid.
I am not promoting nor deterring anyone from utilizing online discount promotion sites. I see it from both sides. I know therapists who deem it a disaster waiting to happen. At the end, they were tired and just as in need of new, quality clients as before the promotion ran. That said, I have also worked with therapists who have successfully navigated the process. It is their expertise I pass along in this blog. Success or failure all depends on how you manage the system. If you properly prepare and protect yourself, you can maximize it to your benefit. Just be sure you read all the fine print, research others in your area that have available offers, have a clear plan and be firm when you negotiate your contract!