Pricing strategy for chiropractors
On average, 4.5 million Canadians visit a chiropractor at least once every year. Whether you are managing your own chiropractic practice or looking to start a new one, your pricing strategy can be the one thing that stands between you and a successful business. With over 9,000 licenced chiropractors practicing in Canada, you want to make sure you are not pricing yourself too high or too low. And once you set your chiropractor pricing strategy there is always a question of when and if you should raise them.
Pricing strategy approach
Pricing strategy refers to how much a business decides to sell their products/services for and the methods that help them to set those prices. For your chiropractic practice there are certain costs associated with doing business. The easiest way to determine pricing would be a “cost-plus” pricing model. This is where you would calculate all of your costs (both fixed and variable) associated with offering services and then add a percentage markup so you can make a profit.
One of the things that many business owners neglect are annual cost of living increases. If you raise your prices incrementally every year to account for increases in cost of living and the cost of doing business, it is easier to raise your prices. If you avoid increasing your prices in small increments regularly, when you do increase, prices will need to jump significantly, which may result in the loss of your loyal, regular clients.
Pricing factors to consider
As a chiropractor, when you are setting your pricing, there are a number of factors to consider.
- Education & training: The more education and training required to provide services, the higher your pricing should be. You have invested time and money into your training and your pricing should reflect that and your level of experience.
- Operational costs: There are a number of fixed costs associated with doing business such as equipment costs, supplies, and office space rental. There are also industry-specific costs for chiropractors to consider that are more open to interpretation such as physical & cognitive exertion for services and the risks associated with offering certain services.
- Desired hourly rate/annual salary: How much time will you spend? How much time to do you need to prepare and clean up? What hourly rate do you want?
- Client demographics & psychographics: Client purchase behaviours should play a major factor into your pricing strategy. Consumers across industries are increasingly price conscious, and they do their research online before making a final decision. Ultimately, your pricing shouldn’t be higher than what the market will bear – how much are your clients willing to pay? You also need to consider demographics like population density (potential clients) and income levels.
- Local competition: Take into consideration how many other chiropractors there are in your area. The more competition you have, the more likely you will need to find ways to stand out, which could mean a more competitive pricing strategy. The Canadian Chiropractic Association has a map to show the number of chiropractors per population across Canada. You should also consider how much your direct competitors are charging. It is a good indication of how much clients will be willing to pay in the geographic area.
Sometimes in economic or health crises that affect both your business and your clients’ ability to pay for services you need to consider other external factors that may lead to temporary price increases, decreases, or surcharges.
Chiropractor pricing across Canada
While the Canadian Chiropractic Association and provincial associations do not regulate pricing in Canada, some provinces release pricing guidelines to give chiropractors a sense of what average pricing is in each market. It also gives you an idea of provincial coverage and how that will affect your pricing. For example, in Ontario, there is no provincial coverage whereas in Manitoba, the government covers $10.00 per visit (up to seven visits per calendar year).
If you research the pricing in your area, you will likely find a range of prices and you should set your pricing based on that range in addition to the rest of the factors listed above.
To give you a sense of pricing ranges and guidelines, here are a few things to consider based on where you are located:
Your chiropractor pricing strategy is as important as how you run your practice on a day-to-day basis. If you have questions about how your costs should factor into your overall pricing strategy and how you can prepare your business financially for long-term success, you can reach us by calling (905)-831-6383 or use our confidential Contact Form.