What is your guess at how much Starbucks pays their supplier for the coffee beans that make their sophisticated coffee? If I’m being honest – I don’t think I’ve ever considered the answer. Perhaps you haven’t either.
Now that we’re on the subject, let’s dig deeper. The price of coffee beans, like many raw supplies, fluctuate. The weather, the country of origin, the supplier, shipping costs; these all play a role in the price of the coffee beans. Because of this, when the price of beans is higher, Starbucks makes less money on each cup of coffee sold so it makes sense that Starbucks makes more profit when the prices are low. NEVER, not at any point, does the customer have visible transparency to these costs and NEVER does the customer feel the fluctuations of the raw supply cost through the price of their coffee.
In fact, I would say, I care MUCH MORE about whether the barista has correctly made my coffee to order than how much the beans cost. I want to make sure that they used coconut milk in my latte or left room in my Grande Pike Place...not whether they made an extra $0.24 off me!
I’ve recited this very rant an incredible number of times in my consulting business. Mostly to cosmetic clinics who can agree with all the statements I’ve made when it applies to coffee but still price their Dermal Filler and Neuromodulator Services according to the product they use! Dysport is one price and Botox is another, and then there is Xeomin with yet a slightly different price.
Often with cosmetic clinics there is a common paradigm of thought: if the raw supply costs less, then the patient should see this savings in the cost of the service.
To these clinics, I ask the following questions:
• Are all of the products you choose to inject generally equal in safety and efficacy? • Are you able to achieve the patient’s desired results using your chosen injectable product? • Are you injecting the correct dose of product according to proper training and technique?
The answers to all these questions are typically yes. So, why is there a difference in price according to raw product?
The point I’m trying to make in asking these questions and ranting over this coffee analogy is this:
PATIENTS DON’T ACTUALLY CARE WHAT PRODUCT YOU USE!
And immediately I am sure some of you are looking for the comments section in order to let me know that “yes, indeed, patients ask for specific products”. I am sure this is true and wouldn’t argue this fact. So perhaps I should rephrase myself:
PATIENTS CARE ABOUT RESULTS!!! (at least WAY more than about the product you use)
When all that really matters to me is whether my Starbucks coffee is made to my liking; comparatively, your patients are really only concerned about getting the aesthetic look they were hoping for.
Your patients are not buying Botox or Dysport or Belotero or Restylane. They are buying the volume that is restored in their cheeks and the diminishment of the “11” between their eyes. They are buying a more youthful, fresher, more beautiful aesthetic look. They are buying results.
If you are able to provide these results then your patient will be happy because, just like the beans, they don’t really care about the Neuromodulator or the Dermal Filler you use.
For those of you yet to be convinced on my theory let me add this…
If you have read my posts, attended one of my speaking engagements or been a client in my program for cosmetic clinics, you will undoubtedly know that I am adamant about the fact that the Medical Cosmetic Industry is a LUXURY MARKET and; therefore, should run on the principles of luxury markets – think Mercedes Benz, Louis V and Starbucks. None of these companies change the price of their products according to the fluctuating cost of raw supplies.
On the contrary, I have a friend who is a sales representative for the plastic packaging industry. The very epitome of a COMMODITY MARKET. His customers purchase plastic for disposable reasons such as shipping and containing. These customers want to spend the least amount of money on this necessary product that provides no extra value as all plastic is made from resin – the raw supply. When the cost of resin goes up, the customer price of packaging goes up and when the cost of resin goes down, the customer’s price of the packaging goes down. These are the basic values of a commodity market. Everything is priced-based and extra value is minimal and worthless.
The very idea of Neuromodulator and Dermal Filler Injections becoming commoditised will convince most in the industry to agree that maintaining the Medical Cosmetic Industry as a Luxury Market is a necessity.
Perhaps, the thought of pricing Neuromodulators (and other cosmetic services) hasn’t been granted enough contemplation at many clinics. Or maybe the idea of luxury and commodity markets is a new way of understanding the industry. Whatever the case, I hope this post encourages clinics to look at the pricing of their injection services and revise things to accommodate a Luxury Market focused on creating optimal results for the patient because this is what they are paying for!