How do I price my health plan right?
There are four Ps that determine how successful your health plan will be:
When you get the first three right, then price becomes A factor in buying decision – but not THE factor.
People make buying decisions in two very different ways. They decide to buy things they NEED with their brain. The brain is very black & white, logical and hard to influence.
Better to target the heart, which makes buying decisions about things they WANT. The heart is responsible for us driving around in expensive cars we don’t really need; plus posh watches, clothes, shoes, jewellery etc.
Your health plan needs to be targeted at their hearts.
This means the basic design of your health plan is just as important as the pricing of it. There are two types of health plan you can run:
Here you are giving them the chance to save money over time. They are getting discounts on vaccines and other commodities, because they are making a long-term commitment to them.
You have to remember that subscription revenue beats all other kinds of revenue, even when you start building in discounts.
The pay off to you is huge. Consider that the average health plan lasts for 5 years. And subscription clients typically spend 2 to 3 times more than non-subscription clients.
Recurring revenue on subscription allows you to accurately predict cash flowing into the practice, and plan growth with less stress.
This is typically where you would expect to see higher margins. This kind of health plan is also harder for competitors to copy, as it’s based around the services your practice is best at delivering.