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Posted by Marian Child, Apr 19 2011 12:29PM

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Prices versus membership discount

I work from home and a new health centre where I pay a weekly rent. All clients are mine, in that they come from my website or are referrals.

What I need some help with is the pricing structure.

At each location the prices are the same. I am comfortable with that.

The issue is the health centre is about to open a gym and are going to charge a membership fee. As part of this membership they want me to offer a regular discount to their members.

So, there seems to be varuious trains of thought:
1 - give a discount at least there should be more clients - (what I am not happy about with this is that I pay rent anyway, and what if my clients get to find out about this. I wont receive any part of the membership fee)

2 - I don't change a thing, therefore not losing any potential income. I feel I currently charge what I am worth in my local region. Health centre may not be pleased, but they are contracted not to take another therapist on whilst I am there.

3 - I put my prices up, but "nudge nudge" let my own clients have the usual rates. Makes putting prices on the website difficult.

I am sure other therapists have been in the same situation and wonder how you have dealt with this, or what your thoughts are.

Marian Child
Amanda Clegg
Apr 19 2011 12:45PM
Will your clients get a discount at the gym?

Seems to me the easiest option is to put your prices up accross the board, and give your own clients a discount or have some sort of buy three get one free or similar type offer on your website, which in effect keeps the prices the same as now. Might be worth pointing this out to the clinic: perhaps they can structure their PR to fit - eg 'we have the added benefit of on-site therapists'

Another spin might be to ask clinic if keeping the clients in the building for longer ups their use of other facilities like a cafe - if this is the case, you are helping them to gain more profit, so could you have a portion of the discount in the form of a rent-rebate for the referred clients?

Question of discounts is really difficult - one arguement is that if clients come 'referred' they you haven't had the cost of marketing (I take a ball park figure of 10% as marketing costs.) However, I do nudge them up a little more when I do my annual (ha ha - been the same price for 2 years now) rate review
Nicki Lee
Apr 19 2011 12:59PM
Hi Marian,

This is a tricky one and you seem to have thought of some good solutions.

The one where you raise your prices and discount for other clients is something that probably happens most often - I often see discounts offered but a little shopping around shows that I can get a better price without the discount going another way. This happens in many industries.

You probably will find that for good working relations with the Health Club you need to offer something to their members. However, this doesn't have to be in the form of a cash discount, and in fact I'm very wary of doing discounts - the people that come solely on that basis usually don't form a solid customer base. I also think it can cheapen what we do, particularly if you work mainly in the health as opposed to beauty side of things. I think you can present this concern to the Health Club, especially if you can offer something else. (Unless of course the Health Club is going to compensate you for the discount, which would be the most fair thing as you will still be paying the same rent. Or you could use this as an opportunity to discuss reducing the rent.)

You may be able to think of something to add value without cutting costs - depending on your therapies, maybe some sort of posture analysis or something that would be a one-off the first time they come. Or a free gift or sample of some sort if you sell products.

Good luck with this! Sadly it's so common (see previous threads on 2 for 1 offers and working free at pamper evenings, etc!) for other companies to ask/expect therapists to discount or give away our time and expertise. This wouldn't happen in many other industries.

Nicki
Sue Hannaford
Apr 19 2011 4:06PM
Hi Marian, I'm with Nicki on this one. You have said that you are happy with what you charge and, having looked at your website I think that, given your range of skills and experience, you are under charging! In addition, you offer discount packages already. I would personally decline their kind invitation! If you really HAVE to do something, how about 10% discount on first treatment for all new clients? I personally have stopped discounting (no-one discounts my rent....) - I worked out how much my overall hourly rate was (not including time spent on laundry, note making, research into conditions, CPD training, marketing, replying on forums... :-) ). Then I worked out how much other professionals were making an hour.

So, to summarise, you are more than worth what you charge and it's easy for someone else to discount for you - you don't need that kind of help! Good luck!

Sue
Sue Hannaford
Apr 19 2011 4:07PM
PS Re charging different people differently - not something I would be happy doing - people talk and clients would find out.

Sue
Julia Courage Joseph
May 13 2011 2:56AM
Hello,

Sorry, may be a silly question, but what are they offering you? It benefits them to facilitate a discount for the members joining the gym, but can potentially cause you problems in ensuring that you maintain your current customer base and price structure. It seams to me that maybe they should be offering you some kind of 'mutual benefit' deal. Maybe by allowing your current customers to get a discount at the gym, or paying you a subscription fee / agreement fee to enable you to justify the discount in the price structure to your existing clients when (and if) you reduce the price for the gym members.

Good luck and kind regards

Julia
Marian Child
May 13 2011 5:37PM
Thank you for your replies. For various reasons, I have actually decided to leave the facility and work from home. That way I can run my business by my rules, and giving my customers what I believe they are worth.

I feel so utterly relieved.
Sue Hannaford
May 13 2011 7:15PM
Congratulations! And thanks for generating such an interesting discussion!
Nicki Lee
May 13 2011 8:13PM
Yes, congratulations! Very best of luck

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