Price Is Irrelevant, Until It’s Not!
I recently attended the Ohio Valley Society of Plastic Surgeon’s meeting in Cleveland, Ohio. It was a great meeting organized by the then-current President of the OVSPS, Steve Bernard and the meeting coordinator, Darlene Lyons. One of the highlights of the meeting was a presentation on customer service by President of The DiJulius Group, John DiJulius. Thanks to Dr. Raymond Isakov for recommending this speaker for the meeting.
When Price Is Irrelevant…
One premise of the DiJulius Group’s X‑Commandment methodology is to provide such a world-class customer experience that price is irrelevant. In the example John gave, he works with a handyman that is so outstanding that he doesn’t know or care what the price is. The handyman does such a great job (and quickly) that John figures he saves money in the long run not having to hire someone else to fix any problems. Thus, price is irrelevant in this circumstance and many others.
I completely agree. I would gladly pay more for a great customer service experience….assuming I have an innate sense of the costs involved. That’s true in hospitality like a hotel or restaurant. Or every day experiences like a coffee shop or drugstore. But again, that assumes I know approximately how much it will cost with and without an upgrade in service. Let me explain.
If I want to pay more for a cup of coffee at a cafe that provides amazing customer service, I assume it will be more than the cup of coffee at a basic, run-of-the-mill coffee shop with mediocre customer service. In this case, I know a cup of coffee normally costs $2, so I can roughly assume the coffee at a world class establishment will be more. Maybe $5 or even $10! If a customer is willing to pay that price for that experience, price has clearly become irrelevant. Good for the proprietor of that coffee shop, good for the customer and good for capitalism!
…And When It’s Not Irrelevant
But what if you have no grasp of the potential cost of the service you’re purchasing? If you have no basis of costs or how much that will change with a great experience, then price is not irrelevant, at least not with that knowledge gap. Once you have a baseline, then you can decide if price is irrelevant. Case in point: healthcare. Pricing is so opaque in healthcare that it’s almost impossible to know what is a “reasonable” price and what price reasonably represents a great customer service experience.
If it’s a life or death situation, a knee jerk reaction is to say, do whatever it costs. I guess price is irrelevant in that situation but there are two caveats worth mentioning here. First, cost is irrelevant to a lot of folks in a life or death situation because after they’ve paid the deductible, insurance is covering the rest. Second, not every healthcare decision is life or death. Let’s say I need an MRI for lower back pain. I could find a wonderful customer service experience and possibly pay $2000 for that service. But what if I could get the same MRI for $450?! Is price really irrelevant then?
Keep in mind that an MRI is a commodity. In other words, there is no difference in quality between an MRI at location A vs location B. Is there any level of customer service that an outpatient radiology center can give me to make price irrelevant?
So yes, we should strive to make price irrelevant because that’s a sign you’re exceeding the customer’s expectations. But with such a lack of price transparency in healthcare, the typical patient doesn’t have enough knowledge to determine if the price is irrelevant. In fact, I would argue that because healthcare as an industry is so stingy with pricing information, that if you’re one of the few providers that does offer pricing, then you’re closer to achieving a world class customer service experience!
Low-Hanging Fruit for Healthcare Providers
Thanks for a great talk John DiJulius. It provided much needed food for thought and it shows that offering price transparency for the consumer is an easy way for healthcare providers to offer a great customer service experience. And then the consumer can determine if the customer service is so great that price is indeed irrelevant!
Dr. Jonathan Kaplan is a board-certified plastic surgeon based in San Francisco, CA and founder/CEO of BuildMyBod Health, an online marketplace for healthcare services that allows consumers to determine out-of-pocket costs on medically necessary or cosmetic services.
