Slides
Pricing Strategies for Multiple Market Locations – Via Google Drive
Pricing Strategies for Multiple Market Locations – Via Dropbox
Video
Town Hall Overview:
Welcome to the 10th town hall of 2022! In this session, we will be discussing pricing strategies for organizations operating in multiple market locations. We are thrilled to have with us two experts in the field—Dr. Larry Earl from NAOHP and Dave Soslofsky, partner for Web4Doctors. Together, they will shed light on the challenges, considerations, and best practices when it comes to setting pricing in diverse markets. Let’s dive in!
Understanding the Complexities:
Pricing in multiple markets is no easy task. Each location comes with its unique set of competitors, demographics, and cost structures, making it necessary to approach pricing strategically. Keith Lavin, Senior Director of Business Development and Innovation at RWJBarnabas Health Corporate Care, highlights the challenges of competing against different regions within New Jersey. He emphasizes the importance of understanding the expenses involved and ensuring appropriate pricing to cover them.
Identifying Competitors:
Determining who your competitors are in each market is crucial in setting competitive pricing. Dave Soslofsky shares an effective method for competitor analysis—secret shopping. By using search engines, specifically Google, to find providers offering similar services, you can gauge the competition. Visiting their websites and checking if they provide occupational medicine services is a useful starting point. Additionally, searching for specific services such as D.O.T physicals and drug testing helps identify potential competitors.
Collecting and Analyzing Data:
To gather pricing data, Dave recommends making phone calls to competitors. Keep in mind that not all providers readily share their pricing information, so it may require multiple attempts and different approaches to obtain accurate data. Additionally, some practices may have volume discounts or contractual arrangements, so it’s crucial to gather comprehensive pricing information.
Analyzing data involves comparing pricing trends across markets and services. It is essential to understand where your organization fits within the market spectrum. Keith highlights the significance of assessing your organization’s costs against the market conditions to ensure appropriate pricing. By analyzing the data collected, you can determine the pricing strategies that align with your organization’s goals and financial viability.
Setting Final Pricing:
Setting prices that are both competitive and profitable is the ultimate goal. Understanding your organization’s cost structure and ensuring appropriate margins is vital to remain sustainable. It’s crucial to strike a balance between being competitive in the market and avoiding a race to the bottom that can impact profitability.
Considering Downstream Revenue:
While health systems may rely on downstream revenue to support clinics, it is crucial to ensure your occupational medicine practice remains in the black. Downstream revenue can enhance financial performance, but not at the expense of running the clinic at a loss. Striking the right balance between downstream revenue and profitability is crucial and may vary based on the organization’s structure and goals.
Benefits of Market Analysis:
Regularly monitoring and analyzing pricing data offers several benefits. Identifying pricing disparities across regions helps you make informed decisions and adapt your strategies. By staying on top of market conditions, organizations can effectively navigate changing trends, such as the impact of the pandemic and inflation, to adjust their pricing accordingly.
Setting pricing strategies for multiple market locations can be complex, but with careful analysis and strategic decision-making, organizations can achieve a balance between competitiveness and profitability. By assessing the competition, diligently collecting data, and analyzing market trends, organizations can make informed decisions about their pricing strategies. Remember, finding the optimal pricing balance requires understanding your costs, evaluating market conditions, and aligning your goals with the financial viability of your organization. Invest time and effort into carefully analyzing pricing data to ensure sustainable and successful pricing strategies.
Additional Resources
Dave’s Competitive Pricing Spreadsheet – You will need to make a copy of this google sheet and save as your copy to edit.
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