Should You Charge For A Consultation? Paid Vs. Free Consults – Practice Perfect Podcast Episode #15

Nick Dumitru: 00:39 Welcome back to another episode of Practice Perfect. Today we're going to talk about whether or not you should charge for a consultation. But before we get into that, I'd like to invite you to come to thinkbasis.com. We've got a live widget on there. I'd like you to engage with that widget and just let me know exactly what you're struggling with in terms of your plastic surgery marketing. What is holding your cosmetic practice back? I'm looking for more ideas to create these podcasts so I can help you guys out and I'd really like to get some feedback on that so I'd love it if you guys would just engage with that there and let me know. I will see those myself. If I'm offline, I'll get the messages later. Yeah, just head on over to thinkbasis.com and get that done.

Nick Dumitru: 01:23 Let's get into the consultations. Now in my consulting practice, this is probably one of the most frequent things that I have to deal with, if not the most frequent thing that I have to deal with. This comes up all the time for every practice, this idea of whether or not you should charge for a consult, what's better to have a free consultation or a paid consultation. Now, there are advantages and disadvantages to charging for a consultation and the same goes for a free consultation. I'd like to examine each so you can decide which is right for your practice.

Nick Dumitru: 01:58 Now, this is a strategic question and I want you to start thinking in terms of strategy and not just a tactic of whether or not you should try to charge for this consultation. What I mean by strategy versus tactic is when you're talking strategy you're thinking more long-term, you're thinking about how what you're about to do is going to impact the overall business, whereas a tactic is just a technique. It's something that you're doing. For example, in this case we're talking about whether or not to charge for a consultation; that's a tactical move. It's something that you're going to do. It's an action. And then I want you to start thinking about why you're doing that action strategically and how that's going to impact the rest of your practice.

Nick Dumitru: 02:42 I want to give you a way to think about it in a way that will help your practice in the long-term. I don't want this to be a short term solution for you. I want you to be able to adapt to this concept, this strategy as your practice changes over time. I get a lot of situations where plastic surgeons think that if they do something, they've got to do it forever. I think this comes from the medical background, the fact that if you decide to do a tactic, you've got to always repeat that because that's the way it's done, that's the way it has to be, but it doesn't have to be that way forever. Making a change in your practice is not as scary as changing your surgical techniques.

Nick Dumitru: 03:21 I want you also to understand that whatever you decide, whatever you decide to try out in your practice is something that will be able to change over time. There's no danger for you doing it. You can try something out for two, three, four months and then go back and revert and change your mind on that.

Nick Dumitru: 03:39 Okay so let's first examine the free consultation. What happens when you have a free consultation? This is going to be a generalization and there will be edge cases where this won't be the case. For example, places where you may have a monopoly or there's not a lot of competition or quite frankly your competition just sucks so it wouldn't really matter what you do, you're going to get the bulk of the business. That's not typically the type of situation I deal with. I deal primarily in competitive markets in medium to larger cities where you've got to deal with competitors, you have to deal with a market that has a choice, that can pick somebody over you. That's where I'm going to be focused on is these markets where you do have to deal with competitors. The market can change their mind and very quickly go to your competitor if you make a mistake.

Nick Dumitru: 04:31 A free consultation what you'll see typically is this, you'll see a much higher volume of patients. You'll see a lot of patients because they may be further up in the buying cycle. They may be more at the inquiring stage and they're not ready to commit financially. Your cost of leads, your cost of acquiring the leads are going to be a lot lower. By costs, I mean your advertising costs. You'll have to pay less to get a lead to fill in a form and come to your practice. If you're not engaged in paid advertising, which you should be, then what you'll see is that your effort to gain them, the number of articles you may have to write or the number of social media posts that you have to post will be a lot lower. So just your overall cost of effort and money to acquire these leads and these patients that you're going to see is typically a lot lower with a free consultation.

Nick Dumitru: 05:22 Now, on the other side of that your no show rate will typically be a lot higher, because these people are further up. There may be more tire kickers. They're looking to get information more than go through with a transaction, so this is an informational situation versus a transactional one. It's not to say that they're bad patients, it's just that they are not quite yet ready to move forward and they could become patients later on. Now, not all of them will be like that obviously. You will get some people that are ready to go on. The free consultation is just what they needed. It's the impetus for them to take action.

Nick Dumitru: 05:56 The way I look at this is I like to say to people that you're going to have to kiss a lot of frogs before you find your prince. Depending on where you are in the world, you may not be familiar with that story. It's a children's story about a princess that had to kiss a frog to find her prince and find the person she's looking at. And really in sales and in cosmetic surgery we're looking to do a lot of the same things. With a free consultation, you will have to kiss a lot of frogs before you discover those quality patients. So just be prepared for that.

Nick Dumitru: 06:24 Again, this not to say that free or paid is better. I want you to start thinking about what this means strategically for your practice. So what will it mean in terms of having to see a lot of people? And we'll get into that a little bit later. Everything has implications. So free consultation, having to see a lot of people, you may obviously have to staff up or get support or just be prepared to sit around. Those are all things to consider. That's the free consultation. Let's quickly examine the paid consultation.

Nick Dumitru: 06:53 Now with a paid consultation, what you'll typically see is a lower volume of patients. Unless you're a celebrity, if you've gotten to that celebrity angle, you're able to get good publicity in your area. I would argue that these days changes it a little bit as well because people are not paying attention to singular forms of media anymore. But let's say you've got just a celebrity status in your city and in the medium that you're acquiring patients from. Maybe you're putting out a lot of video or you're putting a lot of this effort in.

Nick Dumitru: 07:23 I don't distinguish between free and paid in terms of oh, I'm so happy that I'm not paying for getting these leads because you're paying one way or another. You're sacrificing either your family time or you're sacrificing your health, your stress and you're putting forth effort. So whether you're getting a lot of patients on social media and you've established more of a quote unquote celebrities type status, you're Instagram famous, you're still putting forth that effort.

Nick Dumitru: 07:50 Just understand that if you've got a paid consultation and you don't have that sort of volume and celebrity and desire for people to come in, you will typically see less patients on any given day unless you've got a solid lead flow and you're able to acquire a lot of patients to keep yourself busy and keep yourself booked. But if you're a mid level practice or even doing okay and you're switching from free to paid, all things being equal be prepared for your lead volume to go down. So your leads and the number of patients that you're going to see may drop a little bit, sometimes quite significantly.

Nick Dumitru: 08:26 Now, just like with the free consultation where I said that you have to be prepared for more no shows and things, generally with a paid consultation you will see a higher quality of individual. It's not always the case, though. I'm seeing a really strange trend that's happening, I'd say over the past six to eight months in the more competitive markets where people are just more distracted than they've ever been. Even though they paid, they put down a credit card, they're ready to come in for these consultations, there's still no showings. So that's still an issue. Lately, I've been seeing that, like I said, in the past six to eight to 12 months or so that's just been a trend that happens.

Nick Dumitru: 09:03 But with a paid consultation, if you've got a paid consultation, you should typically expect someone further down the buying cycle. This is someone that maybe has gone to some free consultations or maybe has gone to some other paid consultations and now she's ready to go through with her decision. She's on that journey from the beginning where a person thinks that they may need something to the point where they're ready to take action. You can just think of that as a journey, as a buying path is how I describe it in my book. Is they're on this path and when they are paying for consultation, they're further down this path and they're ready to go. You should expect that. That's typically what happens. Again, I don't say that as a hard and fast rule because I have seen people starting to flake more lately, but that is typically what you should expect.

Nick Dumitru: 09:53 That's one of the main things about a free versus paid is the number of people in the quality and the readiness of them to purchase and go through with their surgery. Those are the two or three biggest differences that you'll see.

Nick Dumitru: 10:06 Now, I said that you should start thinking of this in terms of the strategy of your practice. What is it that your practice needs? Depending on what level you are, let's say that you're a younger physician, you're just getting into the market versus someone that's established and has been there for a long time and has a following, has a referral base, this is where you can start thinking about the strategy of your practice. When I say strategically easy, you need to look at your practice and how it's going to impact it and what stage it's at. If you need to take the beach versus take the stronghold tactically and strategically in order to win the war, you have to look at it. So what stage of this battle are you in? What part of the war are you engaged in that you need to move forward?

Nick Dumitru: 10:49 With the younger physicians, someone that's maybe younger or even established but not busy, no longer busy, that happens as well. I'm going to put you in the same boat because both of you are dealing with the same issues. Now, the younger physician needs to see more patients. Because he or she may not be in a good spot in terms of a referral base or they may not have a lot of before and after photos. They may not have a lot of experience. So they need to see a lot of patients to gain that experience and get the volume and get people coming in because it moves the practice forward. It gets the practice going.

Nick Dumitru: 11:23 Now, what I see is typically with a practice that is more established but not busy, they're in the same situation. They still need these patients. But typically what I see is that the doctor's a little bit burnt out. They're suffering from this idea that they should be more successful. They've got the anguish in their own mind and they're fighting against the psychological issue as well. That really comes from the fact that they are basing their current success on past expectations. They had these things from the past, but their current reality is not that and then it causes this fragmentation in their mind and that leads to unhappiness.

Nick Dumitru: 12:01 What happens typically is that they don't have the energy to see a lot of these free tire kicking patients, people that are further up the path. That's really an energy issue. Age doesn't really have a lot to do with it. I'll tell you that I've seen doctors that are in their 70s, mid 70s and still going really strong and they're ready to go. Their mind is in the right spot and they've got the energy level to do that. Typically with younger doctors, that's not an issue because they haven't been burnt out yet. But it's not an age thing. It's really a psychological, emotional, depression style situation that you're dealing with there.

Nick Dumitru: 12:39 A practice without a lot of volume, without a lot of current volume in a market that has the volume to sustain it should strategically look at a free consultation and see if that's something that they can handle. So look at the strategy. I need more patients. I need to grow the practice. I need to breathe some fire into it. I'm charging 100, 150, 200, $300 for a consultation, whatever it is that you're charging that may be putting people off. It's costing me a lot more to acquire my patients. I've got the time because I'm not busy so strategically I should consider bringing on free consultations or at least the option of it to try to increase the volume on my slow days.

Nick Dumitru: 13:18 So you look at it strategically, like if you're busy on Mondays and Wednesdays, because that's when everybody wants to come in, you can do a consultation on a Tuesday or Thursday if you're available and then do those free maybe to try to free up those spots. If someone is resisting paying for a Monday, you can try to shift them over to a Tuesday."Well look, the doctor's willing to see people on Tuesdays. It's A bit busier. You may have to wait a little more, but it is a free consultation. Is that something you may be interested in?" So you give your staff this strategic tool that they can use at a tactical level to try to fill up your non-busy times.

Nick Dumitru: 13:53 This is what I'm talking about when I'm saying you've got to evaluate your practice, what stage is it in and look at it strategically and see what impact it will have for you to switch from free to paid and vice versa.

Nick Dumitru: 14:04 Now, I don't just deal with doctors that are struggling. I do deal with doctors that are doing very well and they just want to do better. If you're a successful practice, when should you consider a free consultation? What I see and what I deal with typically is when you want to increase the volume of your practice and the physician is busy, but you want to scale, you want to open up a second, third, fourth, fifth location and you really want to move this over, you want to increase the volume of people that you're putting through your practice and increase your income and you want to leverage your time by offering a medical consultation for more patients without you being there.

Nick Dumitru: 14:42 What I mean by a medical consultation is rather than offering a physician consult ... in our consultancy we tend to differentiate those two. So we look at a physician consult as that's the cream of the crop, that's the top level that you can get as a patient. But you can also give something to people that are just looking to maybe do a little tire kicking, get some answers, maybe get their hands on some implants and see what they feel like. Just from the purchase ... on their buying journey. They're not quite there yet. You can offer your staff to them as opposed to your time. You can make that time free.

Nick Dumitru: 15:17 That's one way for you to leverage in a busy practice where the physician is maxed out, but they do want to see more patients. They want to capture more of that market to capture that market. Really the variable will be time. You go from a person that's ready to go in a month or two months or three months or six months or a year or two years to their surgery, you still want to capture that patient and start nurturing them.

Nick Dumitru: 15:39 The way that you do that is that you let them engage with your practice. You get them on your list and you follow up with them over time and really nurture them through that decision and try to accelerate the decision but without tying up the physician's time. Because you're busy, maybe you're maxed out with these paid consults anyway, but you do want to scale, you do want to try to get more geographic reach, you want to open up multiple locations, you want to bring on a partner and really grow your practice. To do that, you need the volume to increase the volume. This is something where you could offer a free consultation as a strategic decision to help you grow the practice.

Nick Dumitru: 16:13 Again, strategy versus tactic. The tactic is not as important as the reason why you're doing it. So look at that in terms of where your practice is at and what your goals are. Those are the two biggest things that you have to really look at before you make a tactical decision, before you make a move and decide which tactic is better, is look at where you're sitting and where you want to be, and then decide if the tactic is going to help you achieve that strategic objective.

Nick Dumitru: 16:40 Now, the other place a successful practice could start changing is when they need a lower cost of acquisition. So more patients, they want to pay less to get these patients and they want to really free up the doctor and they want to put the doctor to do more surgeries as opposed to doing a lot of these consultations where maybe tying up a lot of his time. So by offering this kind of free consultation, by changing the model, the strategic model from going to, let's say you could go from a physician consult to a pure medical consult where they just see a medical specialist or someone that's not the physician and they only see the physician for a brief amount of time. Again, this is a strategic decision. It can impact the quality of your reviews. It can impact the quality of the patient. It can impact everything, but strategically would allow you to grow.

Nick Dumitru: 17:28 You need to decide if this is something that makes sense for the practice, if this is a strategy that you want to employ. Again, when you try something, it doesn't mean that it's forever. It's not a forever thing. Yes, there's effort in going back and forth because you've got to train staff. But if you are running regular meetings with your staff, that shouldn't be a problem because you're valuing their input and they're part of the company, you should be able to make these kinds of moves and carefully calculated tests without issue.

Nick Dumitru: 17:54 Now, we've talked about how going free versus paid can cause certain issues like no shows and so on. So I want to discuss some coping strategies, some things that you can start to think about in terms of how to handle some of those situations.

Nick Dumitru: 18:09 One of the things that I want you to think about is how you can increase the show rate, decrease the no show rate, because there are tactics that you can employ which will help them. Like reminders, taking a credit card, things of that nature. You start to look at the no show situation if it happens to go up with a free consultation and look at ways to build value into that consult and talk to your staff and really train them up and make sure that you are policing them doing these tactics that bring people into the practice. Because like I said, a free consultation isn't necessarily better all the time or worse than a paid consultation. It's really a matter of how you handle that and how that impacts your practice. So one of the things that you need to start coping with is this no show rate. So start thinking about how you can deal with that.

Nick Dumitru: 18:57 Now, if you've gone with a paid consultation, one of the impacts that can happen is that can tie up the doctor's time. If you do 100% of your own consults with no staff support, you may be struggling with how to handle the physician's time. That's one of the things that you can start talking to your staff about is how can they be leveraged to ease up the burden on the physician. So you as a doctor, how can you now employ your staff and how can they help you?

Nick Dumitru: 19:23 So invite them to give their ideas of how they can help you see more patients squeeze more in, in the same amount of time. If it's taking you an hour, an hour and a half to see a patient, how can you reduce that to 45 minutes? If you're seeing them to 45 minutes, how can you reduce that to half an hour or 20, 25 minutes without impacting the quality of the perception that the patient has, so their perceived value of that consultation? But how can they increase your time and then get more volume through there? That's another thing that you have to start thinking about coping with.

Nick Dumitru: 19:54 I want you to start thinking about having a plan for how to deal with no shows. On a free consultation or a paid consultation when people no show, what is it that you're doing? What is the staff doing? What are you doing as a physician to maximize that downtime other than twiddling your thumbs and feeling bad about it or doing unproductive activity like paperwork or your files or something where you kind of retreat into your sanctum and don't do anything that moves the business forward?

Nick Dumitru: 20:21 Now, paperwork's important, but it shouldn't be a high energy activity at your most prime time. Typically you're seeing patients during the day when you've got a lot of energy; you shouldn't be doing a low energy activity like your files when you could be doing something more productive, picking up the phone, working on your marketing, whatever it might be. Think about how you can switch gears like that. If a patient doesn't show, rather than feeling bad about it, how can you maximize that downtime? What can you do? What are the strategies that you guys can employ and what are the tactics that you can put in place to really help you cope with that if that happens and you get no shows?

Nick Dumitru: 20:56 While you're working on getting more people to show, you're also working on managing this downtime so now it's not a wasted effort for the practice. You could do mini team meetings. You could do ... working on things together. You could go on your own and work on things. You could pick up the phone. You could get your staff to call out and get referrals and get people coming back for non-surgical treatments. How can you maximize that time for the whole practice when a patient no shows for whatever reason?

Nick Dumitru: 21:27 Now, we talked a little bit about building value. One of the most important things here when you're coping with no shows is how are you building the value? Why are people coming to your practice? What's the reason that they're there? Why do they want to come in the first place? And are you building the value for them into coming into the actual consultation even if it's free? Just because something is free, it shouldn't lack value. The person should be excited about it. So how are you dealing with that? Start talking with your staff. Start talking with your marketing director and really figure out exactly why people are coming in and what you're adding a value to that transaction that people actually want to show up.

Nick Dumitru: 22:07 The other thing I want you to realize is that in a competitive market, if you've got people that are providing the same services as you, whether it's Botox or breast augmentation, it doesn't matter, if the consumer has a choice it's very important for you to stand out from them. I highly recommend you grab my book. If you haven't, you can grab it on Amazon and you can fill it in on our website ... thinkbasis.com. I'll put a link in the comments. But if you haven't gotten the book, and I'm not trying to sell books here, believe me. The number of plastic surgeons in the world, if I got all of them to buy a book, it would not make me wealthy. There's just not enough plastic surgeons out there to do that. That's not why I wrote the book. I wrote the book to really help you.

Nick Dumitru: 22:47 I want you to get an understanding that when you have competition in the market, if you're a commodity, if the consumer has a choice, they will go with the person that they feel best meets their need and they have a reason to purchase with them. So you can't afford to think that you're the only option in the market anymore.

Nick Dumitru: 23:06 This is a misconception that I see, particularly with doctors that have been in the market for a while, 15, 20, 25 years. They don't understand because the good old days are gone. The good old days when someone came to their practice or called or was referred and they're almost like a give me patient, it was very easy to close them. Those days are gone. These days in some of the larger cities, they've got 40, 50, 70, 90, 100 something plus options to go to. They are educated by the market and by your own association. The American Society of Plastic Surgeons actually tells people to go see at least three doctors.

Nick Dumitru: 23:43 So don't assume that because they have booked a consultation with you, there's a reason for them to come to you. They may either have booked two or three more after your visit or before. So you have to make sure that you give them a reason to come. You remind them about how great it is and tell them all of the benefits of coming in to see you and not making a decision until they've seen you.

Nick Dumitru: 24:06 Even if they've gone to the other two or three competitors, they should be so excited about coming to your consultation that they will wait to make a decision with them. They will have gone there, walked out of their practice, but they're still so excited to come see you because you've built up that value in the consultation that they will wait to make a decision. And it gives you the opportunity to actually close that sale, to actually make that patient your patient and take them out of the market.

Nick Dumitru: 24:33 Now if they've got people booked afterwards, they should have had such a great experience in your consultation that it becomes a no brainer to book with you on the spot. That's the other flip side of that is that you want to take them out of the market so that they don't even have to bother going to the other two or three competitors and then they become a no show for your competitors as opposed to you. So keep that in mind.

Nick Dumitru: 24:55 I want you to start thinking about the coping strategies in this situation. When you're thinking about a paid versus a free consultation, all of these issues will crop up. It will change strategically. You may have a reason for doing it, but understand that there are ramifications to any action and that you have to have these coping mechanisms in place. So these coping strategies and then the tactics to go along with them and deal with that strategic objective and the strategic problem that you start facing as a result of changing from free to paid or paid to free.

Nick Dumitru: 25:28 Now to sum it up, I want you to understand that there is no right or wrong answer to the paid versus free consultation. The only thing that really matters is that you figure out at what stage your business is in, your practices in and what strategy is best for your practice at that time.

Nick Dumitru: 25:45 So look at your practice. Honestly, evaluate it. Strategically, what you want to do. Where do you want to go from where you're standing right now? Where do you want to be? What's the strategy that's going to get you there? And then decide on this tactical operation, whether it's going to be free versus paid, and then how to deal with that and do that.

Nick Dumitru: 26:04 All right, so I'm going to leave you with that question. That wraps up this episode. What strategy are you going to employ and why? That's the question I want you to answer. At your next team meeting I want you to really talk about that and start answering that. And really get your staff to start thinking about the bigger picture as well because a lot of times staff will get bogged down in the details and then they don't understand why you're doing it and they may get frustrated. So really discuss it with your staff, discuss it with your practice manager and figure out where you want to get to and why you're going to make this change.

Nick Dumitru: 26:36 So if you're struggling with the idea of charging for a consultation because you feel it solves some problems, you may find that if you haven't really dealt with the other issues, that it doesn't solve those problems at all. So figure out what it is, what's the problem that you're trying to solve, go out there and solve it.

Nick Dumitru: 26:52 As always, give me some feedback. Go to thinkbasis.com. Engage there. Either send an email or engage with a little live chat widget on the site and let me know what you're thinking. Let me know what you're struggling with. Let me know what it is that I can help answer. I'd love to compile a Q&A episode at some point, so the more questions the better. And I will see you on the next episode. Good luck and go out there and make a decision on your paid versus free consultations.