Does your team have wallet guardian disease?
Wallet guardian disease is when you or your team constantly find a way to reduce the price that you should charge for procedures.
A more controversial way to say it (and I’m sorry if this offends you) is you have a fear of charging.
Your fear is that people will reject you when you charge them that much.
As a practice owner, imagine if you could vaccinate you and your team against this disease.
GET to a point when you charged appropriately and were completely comfortable in how much bills came to so you didn’t get the urge to discount or, reduce the overall bill or not suggest doing that dental because you subconsciously didn’t want to suggest another thing to your client.
Well here is a remedy that won’t completely fix the issue but will go a long way toward it.
Part One. Let’s define money.
It is simply a way of exchanging value.
You give me some value (something I want) and I’ll give you some value back. Since you don’t need any pumpkins or milk from me, I’ll give you value in the form of credits.
You can then go and exchange those value credits at a time in the future for something you may want.
Money is simply value credits.
Here is the crazy thing about money. The VALUE of something is a randomly set figure by a random person then everyone else just follows suit.
The way a price is set is that the seller (your practice) simply decides what VALUE they think they are delivering and they then need to get the buyer (your client) to agree with them.
If both sides perceive that:
The value credits (money) asked for = value of product/service received…
Then you are in FAIR EXCHANGE of value.
The transaction goes ahead.
If the buyer does NOT perceive fair exchange of value, then they opt not to go ahead.
In every consult (in fact ANY exchange between two people, even in relationships) you are in this constant flux of evaluating where the fair exchange of value point sits.
Money is just a measure of how much value you believe you bring to others.
Part Two. Let’s understand the behaviour of undercharging.
When your team starts to feel confront about how many value credits (money) they are about to ask for the product/services to be delivered, their brain is telling them:
“I don’t think this represents a fair exchange of value.”
The resulting action?
They’ll find some way to reduce the price until it feels like a fair exchange.
Remember this game of “what is fair exchange” is not real, it is just their perception of value.
The way to reduce the behaviour of undercharging is to increase your team’s perception of the value they are personally delivering.
Part three. The treatment.
Here is a simple way to increase your team’s perception of what value they are delivering to allow them to overcome the fear of charging.
Get them to add up the true cost of providing services to your client.
For example: True cost of providing a $500 surgery procedure.
- Cost of attending 5 years of university in terms of lost opportunity to earn income (assuming they could get $45 000 a year): $225 000.
- Cost of building a surgery: $500 000
- Cost of having all the equipment required: $80 000
- Cost of having all the drugs on hands ready to go: $20 000
- Cost of having a receptionist, nurse/year: $70 000
- Cost of the number of years of experience honing skills at $70 000 a year: $350 000
Therefore the total true cost the business owner has had to give up to be able to provide that service is $1 245 000.
Get each of your team to go through this exercise and then when they are getting to billing up, get them to think:
“My client is getting $1.25 million of value and all I’m asking is $500. Man that is good value.”
Try doing this exercise with your team (yep you do it as well) and see what happens to their perception about the value they deliver each and every consult.
You will need to reinforce this for months until it becomes culture in your practice.
I’d actually write the figure up somewhere in the staff room with a slogan such as: We deliver HUGE value to every client.”
Make your own with the team.
Then charge well and service like hell!