Matthew Gallogly explains how to price medical services using a cost-of-goods-sold approach. A PRP injection costs about $1,100 to deliver, so charge $2,200. One practice raised prices for longevity clients and grew revenue from $1.2M to $2.1M in a year.
How do we know what the best price is? What do we wanna know? We wanna know the best price of what do we want to charge. The second equation is, what is the profit percentage that you want? You have to follow the scientific principles. So here's the other thing that is key when it comes to what should you charge for medical services. So how do we know what the best price is? What do we wanna know? We wanna know the best price of what do we want to charge? Well, Simple. The best thing to do is follow the science of pricing. Now, in our events, we always talk about this, but the best thing to do is work backwards using basic business principles for pricing. The first basic concept is the concept of cost of goods sold. Well, what is cost of goods sold? The cost of the goods sold is everything that goes into the production of the thing. The shirt that I'm wearing, right? It's from Lululemon. Okay? You know, I'm trying to think of it. So are the pants. Anyway. So this shirt comes from Lululemon. It's obviously a very expensive shirt. Why? Because the materials that they use to make the shirt are of higher quality than something that you would buy at Old Navy. So therefore, this shirt is more expensive. I don't know, this shirt's probably $90 or something like that, which means that their cost to produce it was about $45. Hey, I'm Matthew Gallogly, and I'm a Maverick. Well, what is a Maverick? A Maverick goes against the grain. We find our own way. And if you're sick and tired of being pushed around by the insurance companies, come join us. We'll show you the way out, and you'll love medicine again. Whenever you see a shirt, it's usually marked up 50— it's— they usually double the price. That's how it works. If you're in a restaurant, cost of goods sold are about 60% of what the food is. So if you pay $10 for a burger, that means the total cost to produce that burger was $6. That doesn't factor in staff usually. Well, most people go, well, gosh, I only pay $250 for a kid. I can charge $750. But what about your malpractice? What about the front desk person? What about the med tech? What about your rent? What about your utilities? What about your advertising costs? What about the cost to bring in that customer? What about your fee for doing the procedure? If I add all of those up, the average cost, the average cost for a regenerative PRP procedure, single PRP injection nationwide, you ready for this? is $1,100. $1,100. So that tells me if I'm going to double that price, I have to be charging at least $2,200 for a PRP injection in order for you to be profitable. The second equation is, what is the profit percentage that you want? A good business should be profit netting 20%, dropping 20% to the bottom line. So when I factor in all those other things, that means that I've got to at least double my cost. And this is true, by the way, in hormone replacement therapy, in weight loss. This is true in longevity. I have longevity clients that we started working with a year ago. They were doing $1.2 million. A year later, just by upping their price, their revenues went to $2.1 million and their profitability went through the roof. Okay? You have to follow the scientific principles. So here's the other thing that is key when it comes to what should you charge for medical services. There is a concept in marketing called top of the funnel, middle of the funnel, bottom of the funnel when it comes to people that want to buy. People at the bottom of the funnel are more connected to you, and therefore they're more likely to spend more with you because they know, like, and trust you. How do we do that? Well, it's very simply as we nurture that, that prospect over time so that normally what people are doing is they're talking to people at what's called the top of the funnel. These have very low intent. We wanna talk to people that are more at the bottom of the funnel, people that have engaged with our content, that have followed us, that have watched YouTube videos, or they read articles. We used to notice that We notice— not used to— we notice in our clinics that if people stalk us for 6 months, stalk us on social media, stalk us on the website, all of those things, they're more likely to spend money with us. And when they do, they'll spend a significant amount of money with us. Okay.
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