When trying to ensure your business retains a certain profit level, it is essential for healthcare business consultants and experts to understand the concept of downward pressure on price.
First, let’s talk about what downward pressure on price means. Then, we’ll discuss how you can navigate downward pressure on price by getting better leads and reducing the cost of our marketing in the process.
The concept of downward pressure quite literally means there is pressure to make a quantity smaller. For example, if a healthcare legal practice sells a service, downward pressure on price means there is pressure to sell the services for less. Therefore, to retain clients and get new ones, healthcare law practices may look to offer discounts or flat-fee prices.
There are numerous reasons for downward pressure. Price transparency is one of the biggest drivers for converting leads. Because clients have the technology to compare prices, and because people usually make purchasing decisions with a priority on price, this drives the pressure on an organization to reduce its costs. Cost is inherently competitive.
Another reason for downward pressure on prices is supply and demand. When the market is not in equilibrium, there can be excess supply (also known as a market surplus) or excess demand (also known as a market shortage). Excess supply will usually exert downward pressure on the price of the products. So when there’s too much of something and not enough purchases being made, prices are decreased as a mechanism to increase the amount of purchases.
However, there are ways to stabilize the impact of downward pressure on your business's bottom line.
Several factors can drive costs down. That’s why it’s important to know how to defend the price of your services so you can keep providing your services at a consistent rate.
A big concern with being so focused on pricing transparency is the risk of not selling your service properly or undermining your value.
For example, if we use terms like “cost-effective,” customers may not be convinced that the value they’re getting is worth the lower price.
Oftentimes, “cost-effective” is associated with cheap, which reflects poorly on the quality of service. When it comes to their livelihood, many healthcare business owners may be reluctant to take the cheapest option. It’s important to understand there is a balance between your marketing efforts and what your audience wants.
Simply communicating the numerical value flat out versus describing the cost has a different psychological impact. One way to help understand how to position your messages is to put yourself in their shoes and ask yourself, “how would I react to this?” or “how have I reacted to something similar?”
Accordingly, in discussing your services, and the value of your services, it is important to relay the quality of your services by discussing your experience in solving similar problems, providing a unit price, such as hourly rate, in conjunction with pricing flexibilities, such as discounts, flat rates, cap rates or other pricing strategies for predictable problems, and allowing the client to control certain aspects of the project's cost by breaking down complex issues into bite-size problems, each with their own life cycles and budgets.
When we feel the pressures of market surplus, it is vital to understand that we can change our perspective to focus on quality rather than quantity. While it might make more sense at first to focus on increasing leads to be more profitable, this might hurt you in the long run.
While there are many approaches to gaining leads and increasing your ROI, it is important to remember that those unqualified leads still cost money. Therefore, as counterintuitive as it might sound, sometimes your best bet is to decrease your cost and focus on truly narrowing down who your perfect audience is. Once this is done and your cost per lead is lower, you can be guaranteed that when you decide to increase your budget, your leads will follow.
To focus on lead quality, we can undertake the following approaches:
Examine your existing lead data to see where the good leads come from and where there is room for improvement. Then, when you start to separate the good leads from the bad, you can see what was working in your marketing and do more of those tactics, and less of what wasn’t working.
As you look through the data, you may notice specific trends within the metrics, such as the length of the buyer journey, click-through rates, or conversion rates. Again, this is valuable data that can inform your strategy moving forward.
Throughout your evaluation, you need to look at some of the signs and the causes of poor quality leads. There are some prevalent causes, including:
Having a solid framework can make a big difference. Some of these approaches should be a big part of how you generate high-quality leads:
The downward pressure on price is pretty common in the business world, and while it might be challenging, focusing on qualified leads will be your saving grace.
While most might say that the answer is to lower your costs, when you focus on a qualified audience that you know not only wants but needs your services, you don’t have to worry about losing money.
Take action to focus on investing money and catering your marketing to the right audience to avoid the negative effects of downward pressure on price.
B2B healthcare marketing is incredibly challenging. A more effective marketing solution for many healthcare consultants is to let high-quality leads find them organically.
Perla is a new B2B service marketplace that helps advisors with healthcare industry experience offer their services directly to healthcare entities and healthcare professionals to grow their businesses and explore new opportunities.
Perla’s exclusively healthcare audience, such as doctors, hospital administrators, and other healthcare providers can search for and match with a network of vetted, qualified consultants for the exact kind of expertise they need.
We also generate leads of the highest quality in the industry by only connecting healthcare professionals with advisors that offer the specific services needed.
Perla’s ROI is unmatched since consultants only pay per lead received, can fully control their monthly budget, and contact the lead at a lower cost than leads generated through other funnels.
Because we actively market our platform and network of trusted advisors to the healthcare industry businesses and professionals, and actively partner with healthcare organizations and trade associations, potential customers will find you on their own with or without any additional marketing efforts on your part.
Request a Demo today and see how Perla can give you access to healthcare organizations looking to hire businesses like yours.
Get started with Perla platform and grow your practice.Book a Demo