In past years, my firm has published data showing the relationship between price and demand for elective procedures including LASIK and Breast Augmentation. History has shown that when average fees for these procedures are reduced, demand decreases. When fees are increased, demand increases.
Economists call this inelasticity of demand. Put simply, it means that lowering unit pricing won’t likely result in an increase in demand. You can read about this in my case study What LASIK Surgeons Learned from Plastic Surgeons.
When I showed this data to Experience Economy author Jim Gilmore, he remarked that consumer demand for these procedures follows a similar pattern to purchase behavior for luxury goods and services. While I agree with his sentiment, I read an article recently that shed some light on the whole definition of luxury.
The article focused on how Tampa is becoming a “luxury destination” and focused on a new hotel being opened by Ian Schrager. He is credited with starting the trend toward boutique hotels and also co-founded Studio 54 in the 1970s.
But it was his quote at the end of the article that really got me thinking:
“Luxury comes from how a property makes you feel, regardless of who you are or how much you make.”
This describes what I believe elective specialty practices need to think about when they are defining their offering. Luxury isn’t about the size of the purchase. It’s really about a state of mind. Or in this case, a “state of heart” since we’re talking about feelings.
The article is a quick and good read that touches upon the “million details” and “little touches” that make this hotel different. In the end, patients will remember how you made them feel.
All those little things, those tiny and seemingly unimportant details, are what patients often pay attention to over and above the service you provided. That’s what luxury is all about when it comes to elective procedures. The little things are what you should focus on as you strive to improve the patient experience. When that experience is better, you will be able to increase your fees. And when you do, you should see demand increase as well.