Discontinuing discounts

Discontinuing discounts

Oct 01, 2007

Q. I'm negotiating the purchase of the practice where I'm employed. The current owner gives discounts to almost everyone—senior citizens, shelters, friends, and clients with multiple pets. How do I reduce the amount of services being given away without alienating a large number of clients?

Dr. Karen Felsted
"It's clear you're going to have to make some changes," says Dr. Karen Felsted, CVPM, CPA, a consultant with Gatto McFerson in Santa Monica, Calif. "The friends one is easy—they're not your friends and it's not reasonable for them to expect discounts once the current owner leaves." If the current owner will continue working at the practice after the sale, he'll need to tell his buddies that the discounts are no longer in place. "If he isn't working at the practice," Dr. Felsted says, "you'll just have to gracefully and tactfully tell the clients that the rules are now different." As a gesture of goodwill, she suggests giving the current owner and his family a discount.

Move slowly in changing your policy for the other discounts until you get a handle on what they do for you, Dr. Felsted says. Discounts are either a marketing tactic or a way of contributing to society. If the discount doesn't satisfy one of those two criteria, it's not worth having, she says.

Consider the number of clients receiving a particular discount and what other area clinics do. If other businesses offer a senior discount, you may want to continue yours but limit it to services, not products. You can also use discounts only during slow periods—for example, don't offer them during early morning and late afternoon hours but give clients a small break for coming in during nonpeak hours. For owners of multiple pets, you could grandfather in current clients but stop offering the discount to new clients.

The shelters are a different story, Dr. Felsted says. Ask yourself this: Are you discounting for shelters as a marketing tool? Does it work? Can you track the results? Or are you doing it as a way to make the world better? If it's accomplishing your goals, stick with it, Dr. Felsted recommends.