Choosing the Right Pricing Strategy for Your Audiology Department
What are your hearing aid cost-of-goods?
What are the financials of your hearing aid service plan?
Is audiology profitable in your clinic?
What are your practice’s mission and values?
If you don’t have answers to these crucial questions, chances are you don’t have a pricing strategy for your audiology department. Someone in the practice simply picked prices, they stuck, and that’s the way you’ve been operating. If that’s the case, don’t worry. We’ve got three timely tips to help you ensure your pricing makes good “cents.”
1. Identify Your Purpose
The first step to better pricing is understanding the purpose of your audiology department. Which of the following three main models most closely matches your operations?
Drives revenue for the overall clinic and contributes positively to the bottom line
- Pros — audiology operates as a stand-alone business and is sustainable on its own, fostering greater accountability among all stakeholders
- Con — potential conflict with clinic’s mission or vision
Operates as a self-sustaining entity without creating or draining resources
- Pros — attempts to maximize the best of both worlds, profit and cost; creates a level of sustainability; services community needs
- Cons — future investments in the business may be ignored, structure is slow to adapt to new business models
Exists to provide a service to patients and is willing to do so at a financial loss
- Pros — able to meet the community’s hearing needs and provide treatment options that don’t produce a profit
- Con — must depend on the financial performance of other departments to cover costs
To know for sure which model you’re operating under, look to your break-even analysis or the point at which revenues equal expenses. For help calculating your break-even, schedule time with one of Audigy’s finance experts.
2. Know Your Value Proposition
With the first step down, it’s important to identify and ensure consistent follow-through on your audiology department’s value proposition — the promise of something worthy being delivered to your patients.
Your value proposition represents the primary reason patients should choose your practice, team, services, and goods over all competitors. It’s a clear statement of how your products and services solve patients’ problems or improve their situation, deliver specific benefits, and motivate loyalty.
In thinking about your value proposition, consider the two main factors: tangible items and time-based items. What might be included, for example, when a patient buys hearing aids?
Potential Tangible Items:
- Domes and filters
- Loss and damage
Potential Time-Based Items:
- Annual audio
- Clean and checks
- Extended warranty
- Provider expertise
There’s no right or wrong here. What’s most important is that your value proposition ties in with your practice’s mission and the way your audiology department operates. It’s also key that all team members — providers, front-office staff, and others — understand and support the value proposition through consistent processes and practices.
3. Document Your Policy
Solidifying your audiology department’s purpose and value proposition sets the stage for a pricing policy that all team members can consistently follow and patients can embrace.
The industry uses several pricing strategies, including these two common approaches:
- Itemized pricing, which involves listing the cost for every single service you provide. Patients pay as they go, depending on the service.
- Bundled pricing, in which everything is rolled into one flat cost paid at the time of purchase. After that, all included services are provided at no additional cost to the patient.
Other pricing strategies out there may be more applicable to your practice. Whichever approach you choose, make sure it’s linked to the first two steps above, well documented, and clearly articulated to team members and patients.
Do you have questions about finding the right pricing strategy, completing a break-even analysis, or implementing a value proposition consistently followed by everyone in your practice? We can help. Reach out to one of our Audigy Medical specialists today!