If you're like most practices, there is a good chance that you have encountered at least one patient who asked for a discount. You also likely have met the patient who wants a longer term no interest plan that you don't offer. What if could make both of these patients happy and improve conversion ratios overall, without costing you a penny more?
To start, you'll need to transition your practice to a Cash Incentive Model. The goal of a Cash Incentive Model is to provide an incentive for those who can pay in cash to do so and for those who can't pay in cash to be offered the most attractive patient financing options.
So, how does it work?
STEP 1: CALCULATE YOUR COST
Let's presume you're comfortable paying 2.9% for ALPHAEON's 6 month no interest plan (this rate is also similar to what most practices pay when accepting Visa or Mastercard), but your patients want the 12 month no interest plan (or your competitors are offering it and you're worried it is swaying some patients).
The cost for the 12 month no interest plan is 6.9% to you. So your additional cost to offer this plan is: 6.9% - 2.9% = 4%
STEP 2: ADJUST PRICING
Once you know how much offering the longer term plan will cost, you will add that cost to your overall prices. Most practices choose to round up to make the next step - offering a cash discount - easier to explain.
So in this scenario, it costs you 4% more to offer the 12 month no interest plan, so you raise your prices across the board 5%. This raise will help cover the cost of patients who choose to finance, but should also save you money as you will see in the next step.
STEP 3: OFFER A CASH DISCOUNT
Now comes the best part - not only can you offer 12 month no interest to all patients, but you can also offer all patients who choose to pay cash a 5% discount.
This 5% discount may also save you money by converting those who would have elected to finance, but had the cash, to pay in full. Plus, it standardizes your discount policy and ensures patients who routinely ask for discounts, still feel like they are getting a deal without impacting your bottom line.
The last step is to promote the Cash Incentive Model to your patients consistently. The easiest way to do this is with a customized financial policy. If you are interested in having a customized Cash Incentive Model created for your practice, please email email@example.com.