What factors do you put into account when creating a sales funnel for your medical practice?
Is a value ladder one of those components, or are you hearing this term for the first time? If you’ve never heard about it, you have been missing out a lot. The good news is that it is never too late to catch up.
This post explains what a value ladder is and its value to your medical spa or any other health clinic.
What Is A Value Ladder?
A value ladder for your medical practice would basically mean gaining a patient when they buy one of your entry-level offer. From there, you pursue a relationship with that patient, and once you’ve earned their trust, you make them aware of your more valuable and expensive offers.
Value ladder sounds like such a simple concept. Still, if you figure it out, it has the potential to take your medical practice to a whole new level – way higher than you’ve ever imagined.
You must be wondering, “why go through all the hassle?”. Doesn’t it sound better when everyone who comes to my medical practice begins by buying the most expensive services or products?
Of course, who wouldn’t want that? Who wouldn’t entertain a scenario that generates the most revenue with the possibility of producing the best profit margins? Exactly! Every owner of a medical practice wants that.
But, we don’t always get what we want, and such is life! You’ve got to understand that not every patient who comes to your clinic will be willing to dive into using your premium products or services.
And that’s where the value ladder comes in. This tool helps you know the ascending value of your products or services. With this knowledge, you will be in a position to walk your patient on a journey up the ladder where you move from using the cheapest products/services, and at times the free ones, until you get to the ones with the highest profit margins.
What Makes Up A Value Ladder
Here are the various elements of a value ladder.
These are the low-cost products or services that introduce patients to your medical practice. Entry-level products generally have minimal profit margins, and at times, you don’t get to make any money from them.
These are things like discounts, free trials, buy 1 get 50%, etc.
Entry-level offers are a great way to capture attention and at the very least, they usually cover advertising costs. By now, you must know that it takes time and other resources to get a patient to trust your products and services. Use your inexpensive and low-profit products or services to cover these costs. Once you have the patients’ attention, you can begin focusing on moving them up the value ladder in the long term.
That said, one thing must remain clear. Just because entry-level products are lower in cost doesn’t mean that they shouldn’t offer your patients high value. First impressions are crucial- they make or break a deal. Since they are the first products or services that patients are likely to interact with, they better offer high value to your patients.
The number of patients willing to climb up the value ladder over time will be determined by your ability to deliver significant value from the very start. Do everything possible to make that first impression count!
Your patients will become more receptive to these value ladder offers once you have established a beneficial relationship with them, and upon gaining their trust. That’s why we emphasize on ensuring that your entry-level products provide incredible value to your patients – benefits that will make them want to stick around so they can discover what more you can offer them.
Mid-level offers are priced higher than entry-level products so you can expect that the profit margins are also higher. This is mainly because, if you’ve managed to have your entry-level products or services cover the cost of advertising, it goes without saying that the profit you make from selling every mid-level product or service is almost always entirely a profit.
Does this sound cool? This is one of the best pieces of news that every practice would love to hear. It means that your medical spa or health clinic will not only survive the harsh business environment but also thrive.
Fantastic news right there, but this isn’t as far as your ambitions should go. You need to aim higher, and that’s where high-end products come into play.
High-end products or services sit on the topmost part of the value ladder. They offer the greatest value to the patients, and without question, they are the most expensive.
If you think that mid-level products are magical, you have not seen, truly, what top-of-the-line products can do to your medical spa or health clinic. It is on this part of the value ladder that things become exciting!
Let’s begin with the profit margins. They are incredibly high!
There is a catch, though. A patient doesn’t wake up one day and decides to skip your entry-level products/services and mid-level products and go straight to buying your high-end products/services.
Don’t be mistaken. It is possible and that it has happened endless times. However, most of the time, you have to work hard to give your patients the confidence to spend their hard-earned money on your premium products. Imagine trying to sell a full-service laser treatment to someone looking on groupon…
In many instances, a patient who spends money on high-end offers climbs up the ladder from entry-level and mid-level products/services. Most importantly, they have been familiar with your medical practice for some time.
The advantage of the high-end product is that the moment a patient buys it, your medical practice makes almost 100% profit. Why so? Hopefully, the cost of acquiring the patient was absorbed in the entry-level, and if not entirely, the mid-level covered the remaining portion.
Every medical practice’s ultimate goal is to encourage their patients to get to the top-of-the-line part of the value ladder. The journey is never easy, but it is doable with the right strategy in place.
The majority of recurring services, especially in healthcare, come in the form of subscription services. For instance, if you run a medical spa, you may want to consider coming up with membership programs. While such services appear inexpensive, their recurring nature makes the profits add up in the long term.
The goal is to help patients lock into a long-term offer that is not only valuable, but a purchase they would want to repeat.
You may play around with two offers;
- A plan that requires them to make an upfront payment of a flat fee billed once yearly for an enticing discount.
- A plan that requires them to pay a lower amount (than what the non-subscribers spend) paid every month over the course of the year. With this plan, your patients end up spending a little bit more than the ones who are rebilled once yearly.
Does your medical practice have recurring services? If yes, then hold on to them. They can be very beneficial to your value ladder. They come in handy when it comes to supplementing your product line and the bottom line.
You might have products or services you offer that aren’t linked to any of the items in your product line. It could be a stand-alone product or an item that goes (although not mandatory) with one of the products/services (in any of the three levels) that your medical practice sells.
Depending on what they are, additional products/services usually vary in price. They could be low cost, sit in the middle, or high cost. Wherever they fall, these products are a critical element of your value ladder. Identify them and understand the role they play towards making your ultimate goal a reality.
Your medical spa or health clinic can reap significant benefits from a well-crafted value ladder. It is one of the surest ways of transforming your health clinic or medical spa. If you’ve been looking for something that can give your profit margins a significant boost, look no further than the value ladder.
The affordable entry-level products or services at the bottom of your value ladder are handy at leading more prospects into the sales process.
Do you offer freebies? Those too, do an incredible job at enticing your target market. The free and inexpensive value proposition also helps in expanding your list, increasing brand awareness and making people more aware of the existence of your products and the solutions they offer.
As your patients go up the ladder, they get more value for their money. As far as the right strategy is concerned, here is what we have to say;
Embark on developing a value proposition capable of attracting new customers. One with the potential to liquidate expenses and spending on marketing on the entry-level and perhaps mid-level stages of the value ladder. If you can achieve this, and succeed at getting patients to spend on your high-end products, your medical spa or health clinic will be on its way to a whole new level!
What are you waiting for? Go for it!
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