Serving the Luxury Market: Getting Comfortable with Charging First-Class Prices
Set rates that are worth your services
Would you expect to pay economy class fare for a first-class airline ticket? Of course not! So why are physical therapists notorious for pricing first-class service at cut-rate prices?
I have a mobile concierge-style practice serving a very wealthy part of the city I live in. The median annual household income is $206,700, and the median home value is $2.7 million.1 The clients I serve are used to a particular level of service: private, in-home, around their schedule, and of the highest quality. My clients like to feel that they are the only ones on my schedule.
LOW PRICE EQUALS LOW QUALITY
Like many private practice owners, I struggled with setting my rates. I felt guilty charging the rates I knew my service was worth, so I was underpriced. Ironically, I did not do that well in the beginning. After speaking with my business coach, I realized why: low price equals low quality in the luxury market. By pricing my services too low, I was sending the message that the physical therapyI provided was of poor quality. When I raised my rates, my practice did better because my price tag spoke to the quality and convenience of the service I provide.
According to an article by Taylor Wells, an Australia-based business consultant, “Luxury brands target consumers who are willing and able to pay more for higher quality and features. For luxury brands, the price must correspond with the quality of a product from the consumer’s perspective (as some often correlate high price with high quality). Thus, consumers spend more because it is of greater quality, components, customer care, or procedure.”2
GET COMFORTABLE
When did you hear a lawyer apologize for a $350 per hour billing rate? When does the airline apologize for charging three to four times more for a first-class ticket than for coach? Never!
The biggest lesson I have learned working in the luxury market is to get comfortable with the value of my services. As a physical therapist, I provide far more than a comfortable seat on an airplane or a top-dollar pair of shoes. I provide relief from pain and a return to meaningful activities, and, if it’s not too dramatic to say, I give people their lives back. And I do it all on my clients’ schedules, privately in their homes. And that’s worth a lot! As physical therapists, we have a long way to go with getting comfortable charging for our services. It’s time to follow the example of other industries and unapologetically charge what we are worth.
References:
1ZeroDown. Neighborhood Guides: Everything You Need to Know. https://zerodown.com/neighborhood-guide. Accessed February 2, 2023.
2Wells T. Luxury Brand Pricing Strategy for Fashion Businesses. Revenue Management Jobs. https://taylorwells.com.au/luxury-brand-pricing-strategy. Published January 26, 2023. Accessed February 2, 2023.