“Discount LASIK” was emerging in across the US and hurting the perceived value of the procedure among patients and consumers. As average surgeon fees were lowered, procedure volumes actually dropped.
SM2 demonstrated that the market demand for LASIK was “inelastic” and could not be increased through lowering of price. Comparing LASIK demand with that of similarly-priced breast augmentation (which did not suffer the same consequence of price lowering) helped LASIK surgeons understand the role that price plays in their offering
LASIK providers began raising prices as new technology emerged to improve outcomes; prices held up during the 2008 recession and average fees charged have remained at that level since. While procedure volumes have not recovered to their peak levels of 2001 and 2008, LASIK remains the most-performed elective surgical procedure worldwide.
SM2 Strategic's analysis showed that by discounting fees, surgeons on average gave up $433,000 in revenue over a 3-year period. Even worse, that topline revenue loss equaled lost operating margin.
Changes in procedure volume followed changes in pricing, moving in tandem. As prices dropped, volumes followed.
Plastic Surgeons seem to better grasp the meaning of inelasticity of demand. As they raised their fees for breast augmentation, demand increased.
“You must understand what business you’re really in if you want to bond with your customers.”
About SM2 Strategic
SM2 helps clients be better and smarter in the marketing of elective self-pay procedures. Founder Shareef Mahdavi has worked with numerous medical device companies and start-ups and has advised thousands of doctors over his career.