Pricing Strategy For Your Cash Based Telehealth Practice
Are you considering starting a cash based practice and diving into telehealth services?
When working with students in my coaching program, they often get stuck on how they should set pricing for their services. This is true for brick and mortar, mobile, and telehealth pricing. The good news is that no matter the setting you choose to start a practice, the pricing strategy for your business stays pretty much the same.
During this post, we’re going to discuss the four pricing structures I recommend to new practice owners, including those starting a telehealth business.
Pricing Telehealth Services
As I mentioned before, we’re going to be discussing four different pricing structures when starting and growing your practice. Keep in mind, each strategy has its pros and cons and not every strategy is going to be right for each practice owner. The important thing to keep in mind is that whatever pricing strategy you choose, ensure that it helps you to achieve your financial goals and the time freedom you hope to have.
Selling Single Sessions
One of the simplest ways to get started when selling you services is to charge clients per session. This method can be easy for both you and your clients to understand and feel confident in. Here are some of the pros and cons of selling single telehealth sessions:
Pros:
Single sessions are the easiest to understand and price.
They can offer the most flexibility for you and your clients (versus purchasing a whole package).
Cons:
There can be a risk for a fluctuation in caseload and thus income due to the possibility of cancellations and no-shows.
The above example could lead to the practice owner feeling like they are living “session to session,” which could feel quite stressful
In my experience, selling single sessions is a great place to start when you’re just getting going with your practice. It allows you to figure out pricing that works best for you and get confident selling your services at that price point. To this day, I sell single sessions on a regular basis and have found it works really well for my clients and myself.
To help you determine pricing for single sessions, check out the blog post here, which also includes a link to my pricing calculator.
A pro tip that I’d like to share is to consider charging clients when they book their sessions rather than after you see them. This can help to alleviate income loss that can occur due to cancellations and you get paid whether the patient shows up or not. In that same token, having a client pay with booking gives them a bit more “skin in the game,” possibly encouraging their commitment to their sessions.
Selling Packages
Another popular pricing method for telehealth and any other physical therapy service includes selling packages of sessions. When choosing this route, when you are able to close sales, it helps to ensure steady cash flow and optimal client commitment. If you think about it, a client is going to be a lot more committed to a purchase they made for $1000 versus $100, which can be a benefit of selling packages.
As with anything, there are pros and cons with selling packages. You can find them below:
Pros:
Improvements in cash flow when clients pay up front
Improved client commitment because they are making a bigger purchase
Cons:
Requires the practice owner to get really confident with their services, what they’re selling, and the value of what they’re selling - you can learn more about sales skills in the blog post here.
Typically packages will allow a per session discount of sorts since the client is paying for a bundle of sessions. With that being said, make sure not to discount your services too much!
Once you’ve determined what you need to be selling a single session for in order to reach your financial goals, when selling packages of session discount the pricing only to the point that does not undercut your ability to reach your financial goals.
Creating and Selling Programs
Creating and selling programs are an even higher step up from selling packages. With that being said, programs can be extremely effective for telehealth practice based on the experience I’ve had working with coaching students.
Typically, a program is created to solve a specific problem for a specific population. Some examples could include:
Knee pain in runners
Urinary leakage in female CrossFitters
Elbow pain for golfers
The program itself has to be very narrow focused in order to encourage the ideal client population to purchase it. Here are the pros and cons of selling programs:
Pros:
Can be easier to market and sell because they are specifically targeted (who it’s for and problem-solution specific).
Can help the practice owner to meet their financial goals with few clients.
Cons:
Requires time and effort on the practice owner’s part to create and develop the program.
The marketing aspect for the program has to be very clear and specific to attract the right clientele.
Personally, I haven’t had experience in creating and selling programs to physical therapy clients, but I have had students in the past that do really well with this pricing strategy. Once again, it’s all about what works best for you and your clients.
Offering Memberships
The last pricing strategy to discuss is what is called offering memberships. Memberships for telehealth services, just like any other membership, help to achieve a steady recurring income once members have bought into your services. This would be the dream, right? Having people pay you every month just for a membership to work with you, whether or not they actually do.
Yet again, it’s important to consider the pros and cons of memberships:
Pros:
Helps to promote recurring revenue for the practice owner.
Memberships aren’t usually sold at $200/month, so offering a membership at a low price point could be appealing to potential clients
Cons:
The practice needs a very large following, such as 10s to 100s of thousands of people in order to ensure that memberships will promote financial stability.
Still requires ongoing content and support from the practice owner despite the possibility for recurring revenue - you still have to provide value to your members.
At the end of the day, memberships are not typically something I would recommend for beginners due to the amount of work involved and the small audience that new practice owners typically have. However, if you’ve been in business for a while and have a large following that you’ve built over time, it is possible that a membership model could be a successful addition to your practice.
Which Pricing Model is Best for You?
To make things as simple as possible for you when choosing a pricing model, here’s a bit of a recap of each strategy:
Single sessions: Start here if you’re new to running a practice, both in-person and telehealth.
Packages of sessions: Moving to selling packages of sessions could be an option once you’re comfortable with selling single sessions, and have had success doing so.
Creating and selling programs: Look into developing a program if you want to target a specific problem and audience.
Offering memberships: Consider memberships once you have a large audience and want to add stable, recurring revenue.
Additional Tips
Use a pricing calculator: To figure out your prices, use a spreadsheet calculator, like the one I’ve linked here, that factors in your financial goals and the number of clients you want to see each week.
Don’t undersell your services: I know it can be hard to sell yourself, but as a business owner you have to get comfortable with asking people for money. Focus on pricing your services based on the value you bring to the table and your financial goals.
Consider time and effort: Adjust your prices based on the time and effort you’ll be putting into each service. You’re probably not going to sell a 30 minute telehealth session for the same price as a 1 hour session, so keep these things in mind when discussing pricing with your clients.
Conclusion
In conclusion, there is no cookie cutter way when it comes to pricing your telehealth services. Choose the strategy that you feel most comfortable with and supports your financial goals. Don’t forget, it may be necessary to troubleshoot and adjust your pricing over time based on the experiences you get from working with clients.
You can learn more about selling physical therapy services for cash in the blog post here.
As intimidating as setting prices for your telehealth practice may seem, it’s actually very straightforward. But if you are still on the fence about setting pricing and how to go about doing so, I would be happy to assist you in this process. Schedule a free discovery call with me here and we can discuss your practice, goals, and the best option for pricing your services.
Or if you’re in a spot where 1:1 individualized guidance for starting a practice and running a business sounds like something that would better suit your needs, you can learn more about our DPT to CEO Business Coaching program here. DPT to CEO is the step-by-step guide you need to start, launch, and grow a successful cash based practice!
Listen to this episode on my podcast!
