Discounting Will Eat Your Lunch

EXECUTIVE SUMMARY

Discounting your fees feels like a reasonable response to pressure from patients. It isn't. This article covers what discounting actually costs you financially, what it signals to patients about the quality of your work, why it quietly penalises your most loyal patients, and why the patients who push hardest for discounts are the ones you least want in your chair.

---

Early in my career, when a patient would ask me for a discount I’d give in. I was a pushover. Then I began to think about what cost me. In the end I decided that the fee is the fee. No discounts. No ifs buts or maybes. Here’s why.

What it costs you financially

The mathematics of discounting are brutal. If you're running at a 70% overhead — which not every practice can achieve nowadays — and you discount your fees by 10%, you haven't lost 10% of your profit. You've lost 33%. The discount comes entirely out of your margin. Your lab bills don't go down. Your staff don't work for less. The consumables cost the same. You simply absorb the difference yourself.

If you do that across a clinical day and you've worked two and a half hours for free.

What it signals to the patient

Here is the thing about discounting. When a patient asks for a discount and you give it to them, you haven't necessarily won them over. You've often made them aggressive and suspicious. They wonder, were you overcharging in the first place? The will examine every bill you give them from then on, line by line.

Your fee is a signal. It tells the patient something about the quality of what they're receiving. Drop it on request and you’re undermining their confidence in you.

What it does to the patients who never asked

This is the one that bothers me most.

In any practice there are patients who have been coming to you for years, who pay on time, who follow your recommendations, who refer their family and friends without being asked. They have never question your fee. They are your star patients.

When you discount, you are charging them more than you charge your most difficult patients. That's not a business model. That's disrespect for your good patients.

Who actually asks for discounts

In my experience, patients who ask for discounts are not good patients. They tend to be demanding ones who are and quick to complain. They will examine your work with a magnifying glass and harp on about anything they don’t like.

You discounted your fee to get them to accept treatment. You spend the next three months and two redos wishing you hadn't.

The self-respect argument

You spent years training. You invested in good equipment, good material and good staff.

Cutting your fee on request is not a gesture of goodwill. It's an apology for your own worth. And once you start apologising, it's a hard habit to break. You will not feel good about the work you do for a discount, no matter how well it turns out.

Bottom line

If your fees are fair charge them. If they are not fair, change them. But whatever you do, do not discount them.

---

If you'd like to improve case acceptance or work more efficiently or both, I have online courses and also offer in-office seminars. Follow these links to find out more: Case Acceptance | Efficiency.

---