Episode 214

Apr 5, 2019

We weigh the pros and cons of offering packages and share a brilliant tip from a Premium Member.

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We weigh the pros and cons of offering packages and share a brilliant tip from a Premium Member.

Sponsored by: Acuity and The Jojoba Company.


Sponsor message This episode is sponsored by The Jojoba Company. I believe that massage therapists should only be using the highest quality products because our clients deserve it and our own bodies deserve it. I’ve been using jojoba for years and here’s why: Jojoba is nonallergenic; I can use it on any client and every client safely without a fear of allergic reaction. It won’t clog pores, so I can use it on all my clients who are prone to acne breakouts. Jojoba does not go rancid; it makes jojoba a great carrier for essential oils. And it won’t stain your 100% cotton sheets. The Jojoba Company is the only company in the world that carries 100% pure, first-pressed quality jojoba. And you, our listeners, can get 10% off orders of $35 or more when you shop through our link massagebusinessblueprint.com/jojoba, that’s J-O-J-O-B-A. massagebusinessblueprint.com/jojoba.

Michael Reynolds Hey, everyone. Welcome to the Massage Business Blueprint podcast, where we discuss the business side of massage therapy. I am Michael Reynolds.

Allissa Haines And I’m Allissa Haines.

MR And we are your hosts. And we are struggling today because I am using a new mic, Allissa’s head is stuffed full of snot —

AH (Laughter)

MR — and our equipment was almost malfunctioning this morning. My computer almost crashed, and it’s finally booting up and running. So if we make it through this episode, I will call it a small miracle.

AH Yeah.

MR So hope your day is going better than ours.

AH I know, I’m, like, totally — guys, I’m having a really tough allergy season, and I think I actually have a little bit of a cold as well. So I am coming off of a pretty good Benadryl dose a couple hours ago, and I’m a little loopy. So yeah, now it’s all out in the open. This is just where we’re at today.

MR (Laughter)

AH Just like you, we have to plow through our day anyhow.

MR Right on.

AH Although, I do have to say I’m kind of looking forward to today because the little one, the ten year old, has a half day of school, and so I’m home today. And his thing — he’s totally digging malls and big shopping centers, and he likes to take a picture of the front of each store. And he’s making a stop motion film of all the stores in all the malls. So we’ve been doing a lot of mall field trips. And it’s actually a beautiful day outside, which is really nice, and because he has a half day, when he comes home, we’re going to one of those outdoor outlet malls so he can take pictures of all the stores there. So I’m like really — even though allergy season’s kicking my butt, I’m really excited to like walk around outside with this little kid who is going to be so excited —

MR Yeah.

AH — like he just walks from store to store to take a picture of the outside. It’s just adorable.

MR Well, that sounds adorable.

AH So yeah, that’s my — what have you been doing outside with Eli?

MR He’s riding his scooter. So we got him this scooter last year for his birthday when he was, obviously, a year younger, and he couldn’t really maneuver it very well. And now, as soon as the weather is getting warmer, he’s getting out on his tricycle and his scooter and he can actually, like, coast down the sidewalk for, like, you know, 200 feet, and it’s like he’s really getting good at it. So I’m really excited because it lets him — his mobility has increased. His range has increased with the scooter, so. (Laughter)

AH That’s so fun.

MR We always make him wear a helmet, though. He’s got a Paw Patrol helmet.

AH Heck, yeah. No, we’re big helmet people over here. The old one’s got one of those hoverboard thingies she got for Christmas a couple years ago —

MR Oh, yeah.

AH She gets so mad because we make her do, like, the full helmet and elbow guards and wrist guards and knee guards because, like — it’s just — I’m not dealing with broken —

MR I’m like, you’re not cracking your head open, I’m sorry. It’s just not going to happen.

AH Yeah, but she cruises on it. But it’s good because she scares herself just a little bit, too, when she goes too fast. And I have to, like, jog alongside her and it’s good exercise.

MR (Laughter)

AH So now that you’ve heard about Michael and I’s spring and summer activities, what’s our topic today, Michael?

MR Well, before we get to our topic, just — I want to ask our audience. First of all, I apologize the sound is a little bit different. I moved to a new home office, and I’m using my Blue Yeti mic instead of my headset because I want to see how it sounds. And Allissa has informed me there’s kind of a little bit of an echo because my home office has nothing on the walls, there’s no sound dampening stuff in here. So I’d love feedback on kind of how it sounds. And then later on, I’m going to start hanging stuff on the walls and hopefully it’ll improve. So anyway, sorry for the sound experimentation, but the Blue Yeti mic is very nice. Side note for those who are doing podcasting or thinking of doing podcasting, I do love the Blue Yeti mic; it’s pretty nice. So anyway, that’s —

AH Well, good, you can have one shipped to me, then.

MR Hey, say the word.

AH (Laughter) And I’ll use it too.

MR Or you could just find your windscreen for your headset.

AH I know. I’m sorry. It popped off. It’s terrible.

MR (Laughter)

AH So yeah.

MR Yeah, so with that, our topic today is should I offer package pricing. And I’m not surprised we’re talking about this because I feel like I see this pop up every five minutes in our premium group lately.

AH Yeah, it’s been mentioned a couple times. And, you know, I mean, questions about pricing — it’s so hard. Pricing can be such an obstacle for us as we get started depending on our confidence level and our experience in business-y stuff. And then, you know, when you’re ready to increase your prices or — service menus and pricing are hard. So yeah, these questions come up often with so many facets. And there was such a great conversation in the group this week that I kind of wanted to share some thoughts. And I’m not going to mention any names because I — we try to keep things fairly confidential and private in our private member group so that people can feel comfortable expressing things. But there’s nothing really particularly mind-blowing here anyway.

But someone asked the group do you offer discounted packages — or do you offer packages, do they have discounts, have you ever offered them and then stopped? And our member expressed some thoughts about her situation with packages that are really really common. For example, you know, she had offered some packages that offered a discount off of the total price, and when someone would come in who was using a package, they would think ugh, I could be making more money than this. And also that feeling where you look at your calendar and for a day or a week, you’re like I don’t have any full-paying clients. And sometimes other people have expressed that they’re not really great with the money management. So if someone buys a package of five, they spend that money and then they can’t pay themselves out for that massage when the time comes because some people pay themselves, you know, weekly or whatever per massage that they’ve performed. That’s how some people calculate what they pay themselves. So these things, they add up and they can — they can take a hit. The way you feel and your excitement about performing a massage can absolutely take a hit.

So let’s look at the downside. I’ve already mentioned a couple of the downsides of offering packages. First, if you offer some kind of a discount, then you make less money for every massage you give. So for me, I charge $100 an hour for massage. When you buy a package of five, the package is $475, so there’s a $5 discount per massage, so it’s 5%. So when I do a massage from a package, I’m only getting $95 for that massage. So straight up, if you offer a discount on a package, you make less money. So that’s one, and that tends to be the most popular thing people talk about.

You’re on the hook for completing that package or refunding the money and/or enforcing any rules that go along with offering packages. So I used to offer packages that didn’t really have an expiration date beyond what my state requires for gift certificates. I kind of treated my packages as a pre-paid gift certificate essentially, and that meant they were valid for seven years. That didn’t work really well, so I recently changed so that my packages, because they’re a special offer, are only valid for a year. And technically, I have a rule that says they need to be used by the person who bought them. So if you set up a set of rules around your packages, you have to enforce those. It’s up to you to enforce them and to decide whether or not you’re going to enforce them. So if someone buys a package and then they have a medial issue and they can’t come in for that year or six months, am I going to extend the expiration date on that? Or let’s say they buy a package of five and then they decide they’re going to move out of town, do I let — do I give them a refund or do I let them transfer those massages to somebody else? Or how am I going to handle this? So a downside of offering packages is that you’ve got to deal with the logistics and the admin involved.

And I already touched on this other one, but money management. If you pay yourself per massage that you perform in any particular time period, you need to put that cash away just like you would with a gift certificate sale or deal with the fact that you’re not going to — and I kind of say this in little quotes — get paid for certain clients. And I’ve done this. Like, I have run a package deal because I had a huge bill come up that I wasn’t expecting. But I did it very mindfully. I offered a — it was the first time I offered packages, and I offered them at a slight discount, enticed people to buy them, but not to gouge myself on pricing too far. And I knew that when that — you know, if I sold, say, six packages, that that three grand that came in I was going to use to pay down this bill. But it meant that every time one of those massages was redeemed over the next year, I was not going to be paying myself. So I was kind of stealing from my future self and stealing from my future paycheck. If you do that mindfully — first of all, I don’t suggest doing doing. But if you do that, you’ve got to be real mindful about how or if — if you have a week where you have ten clients and five of them are redeeming packages and you’ve paid that, you’ve already spent that money, how are you going to pay yourself? So you have to remember if you don’t set that money aside — and mind you, I did that very early in my career, very carefully, and I don’t do it anymore, but it was a way to dig myself out of a problem that happened. And I don’t recommend it. I learned my lesson from that because it was a tough year after that when those would get redeemed. So keep that in mind that you’ve got to be good with your money management and if you spend that money, you’re just robbing your future paychecks.

And finally the last downside I have here is that if you offer too many packages on top of your regular individual services, you get a real complicated menu. You get too many offerings and people will get decision fatigue. And same applies for like — I don’t like when people have too many service offerings, when they have like five different types of massage offer — and they’ve got this huge service listing and you never know which one to pick. I don’t know if I need therapeutic or sports or — ahh, it’s too much. People get decision fatigue, they don’t know what treatment to choose, they don’t know what payment option to choose, and then they just blank out and they choose nothing and go to somebody else who has one or two things on their service menu.

So anyhow, those are the downsides of potentially offering package pricing. We’re going to take a moment for halftime. And Michael, who is our halftime sponsor today?

MR I’m tickled because our halftime sponsor is our favorite online scheduling tool in the world, and that would be Acuity.

AH Yay, Acuity.

Sponsor message This episode is sponsored by Acuity, our software of choice. Acuity scheduling is your online assistant working 24/7 to fill your schedule. No more phone tag. Clients can view your real-time availability and book themselves. They can even reschedule with a click. I had a client tell me the other day how delighted she was — she’s someone who used to text me to change her appointments. And she thought of it at like 10:30 at night. She’s a CPA; we’re in the middle of tax season. She comes every other week during tax season. And she had to change her appointment last minute. And then she finally came in the other day and said, I loved being able to reschedule my appointment. I just had to hit the little button in the email. It was awesome. And she’s like, I didn’t feel bad about having to text you at 9:30 at night knowing that if I didn’t do it then, I would have to text you at 5:30 before I headed to the office the next day. It was awesome. Anyhow, you get the idea. Acuity’s customer support is a delight. You will love their style. They get back to you via email quickly, and they can help you just chill and do the stuff for your business. You can get a special 45-day free offer when you sign up today. You can go to massagebusinessblueprint.com/acuity.

AH Now at this point, I have to silence myself and blow my nose. So sorry, Michael, you’re going to have to vamp and/or edit this out.

MR Hey, fair enough. I don’t have to edit because I have something to say, so there you go. So going back to your simplicity, I really want to kind of emphasize that and agree wholeheartedly. And the example I always use is Chipotle. So I don’t know if you like Chipotle or not; I love Chipotle. And I love the fact that when you go to Chipotle, there’s like three things you can get. You can get a burrito, a taco, or a bowl basically. And you’ve got three choices of meat. It’s so easy. And that’s one of the reasons why a lot of retail stores and restaurants are so successful is the simplicity. It eliminates the decision fatigue. Like if you go to other places — like there’s a Chipotle right next to Which Wich sandwich shop in the plaza where I eat sometimes. And Which Wich is, like, overwhelming. I would never go there again because there’s five million options, and I don’t know how it works and it’s so confusing. Chipotle it’s like I want that, that, and that, and it’s boom.

So anyway, I just wanted to agree with your simplicity. Simplicity in your menu options is very useful and can be very attractive to your clients when making decisions.

AH I feel like you’re going to write a philosophy book that’s like the Dao of Chipotle. (Laughter)

MR You know what? I love Chipotle. First of all, the food tastes good. (Laughter)

AH It’s all right. Sometimes it hits my stomach a little weird. Something about some of the spices they use. But I do have to —

MR Yeah, it’s not always gut friendly, but — (Laughter)

AH I’ve been to a Which Wich with my friend when I was at my grandparents in Illinois because we don’t have them out here. But I went to one and I was completely overwhelmed —

MR Exactly.

AH But it was delicious.

MR But — I’m sure it is delicious. But the — I’ll never experience the full spectrum of taste enjoyment of Which Wich because I cannot get past how overwhelming and stressful it is to order from that place.

AH All right.

MR (Indiscernible) with Chipotle where I can order in two minutes and be about my day and not worry about it.

AH Here’s what we’re going to do. Next time I’m — next time we’re hanging out somewhere, we’re going to go to a Which Wich and I’m just going to order for you.

MR That’d be fine with me.

AH Yeah, right?

MR Yeah.

AH (Laughter). So this is important. We’ve covered a lot. Thank you for giving me a respiratory break.

MR (Laughter)

AH So let’s talk about the good parts of offering packages. And I mean, spoiler alert, I’m a fan for a bunch of reasons that I will list for you now.

One, it’s convenient. It is really, really nice to not have to handle payment at every massage, especially for clients who come in weekly or every other week or even my monthly clients. It’s so nice to just not have to deal with payment. They get dressed, they have a sip of water that I give them to just chill and come back to the world. We double-check the dates of their next appointments. And I book my clients eight weeks out. So usually with my monthlies, I’m checking their next two appointments that we’ve got scheduled or with my bi-weekly clients, we kind of go through the next couple and make sure everything’s all good. It works really, really well. And it’s just a thing that I don’t — another admin task that I don’t have to handle between appointments, and that’s really, really nice.

So also, these packages encourage loyalty. And in the group discussion — and I am going to name a name because I know he’d be cool with it. Ian Harvey is one of our premium members, the Massage Sloth, he’s got just great business ideas and brilliant hands-on skills. And you need to check out his new column in ABMP’s magazine, Massage and Bodywork. So anyhow, Ian noted that it’s good consumer psychology. Packages and memberships give clients the opportunity to buy in in more than just a monetary sense. And this is a direct quote. “By allowing them to make a commitment, they will be more likely to come more often, tell their friends, leave reviews, and all the behaviors we associate with clients who feel like they’re part of your practice.” And there is a commitment and a buy-in to packages. And kind of popping back to the scheduling note, my people who buy packages, we book every massage for that package. So I mentioned my CPA that sees me during tax season, she — in January — her first appointment in January, she buys a package of five and we book her five appointments for ten weeks out. And then ten weeks out, she buys another package of five, and she comes in with her check pre-written, and we book those ten — those five appointments for ten weeks out. And so we book her right through from January into May. That may not be exactly 20 weeks, but you get what I’m saying. So we actually book her appointments five appointments at a time based on those packages. And a handful of other clients who come to see me, we do the same thing. So they’re making a real strategic plan. And those clients never cancel an appointment because they don’t want to spend the 100 bucks because they’ve spent the money. And I will say as a consumer, this worked for me really well too. In the fall, I bought a package with a colleague in my office, and booked — I couldn’t book all five appointments out, but I booked three and two in, I booked the rest. And it was so good of me to not think about, can I really afford this massage? And it was so great to just go. I loved that feeling and I’ve actually shared that with a handful of my clients, and it’s encouraged people to buy some more packages.

Also, people — if you offer packages and you offer a little bit of a discount, that’s a great incentive. You don’t have to offer a discount. It can be just about convenience, and I’ve got some examples of that in a second. But that little bit, that $5, when people ask me about my package, oh, is it a better deal? I say, yeah, it gets you five bucks off of each massage. That’s not huge and I don’t feel the difference between getting $100 or $95 for an hour massage. I don’t notice that; that’s so little, I don’t even notice it. So it makes them feel a little bit like they’re getting some kind of value, like an incentive. I don’t notice it because it’s so small, and it’s kind of win-win.

But I also — so I have two sets of pricing. I have my regular pricing and then I have considerable student and senior discounts. This was a calculated decision I made. It is considerable. My student and/or senior, which I consider over 65, is $80 an hour. So that’s a deep discount. I offer 20 bucks off for students, and that goes right up through grad school. I’ve kicked a few people out when they graduated from grad school and were like 25. And that’s a considerable — 20 bucks off is a lot. But I like working on those populations, it helps my people who are on fixed incomes. It was a way — when I increased my prices a while back — well, I’ve increased them several times — it was a way to not make my fixed income people take a hit to keep coming to see me because I kept my pricing where it was for them, and that’s kind of how my student and senior pricing evolved. I still offer 5-packs, packages, at the student and senior pricing. There’s no discount because I’m not going lower than $80 an hour. But people still buy them because it’s convenient, because they like committing to their care, they consider it buying a gift for themselves, or — and their families often contribute; they give them some money at Christmas and birthdays and stuff so that they can buy a package. I have one woman who buys a package of five every year in April. As soon as she gets her tax refund, that’s the first thing she does and she buys her packages of five, and then she buys one again in the fall, typically. Sometimes she’ll go month by month instead. But it’s not about the discount at all, it’s about convenience. So clearly, I like packages. I like them because they’re less admin work for me. I love having that money sitting in my bank account as a savings buffer. It’s nice. Yeah, and it works.

And I just want to wrap it up with one little bit of brilliance that solves some of the — that feeling, that feeling our original poster mentioned how like when someone’s coming in she’s like ugh, I’m not even getting full price for this. One of our premium members dropped this like amazing truth bomb. Her name is Sonia, and she said, “I price my packages at the price point I want to make. Everybody else has to pay more.” So her baseline is what is her package pricing, and then individual massages she pricing a little bit higher. So she doesn’t have that feeling of ugh, I’ve got a package coming in, I’m not going to make as much money off of this.

MR That’s brilliant.

AH It’s brilliant. Sonia — and I didn’t get permission to — I won’t give her full name because I didn’t get permission on this, but it’s so brilliant. I’m embarrassed that we hadn’t thought of that or expressed that sooner. Like, that’s great. Everybody else pays a little bit more. People with packages will definitely come back. And those who are infrequent will pay a little bit more. It’s a great idea, people. And so thank you for that mic drop, Sonia. And that could really — next time you’re adjusting your prices and revamping your service menu, consider that. The lowest possible price should be the lowest price you’re willing to accept. The price point you want to regularly make. And everyone else pays a hint more because they don’t want to commit with a package.

I will also throw in that I offer 5-packs. I actually offer 10-packs as well, but only to certain people and they’re not available for everyone to buy. But I have some clients — like, I have a weekly client who comes in — it’s a little less-religiously weekly now because his life circumstances have changed, but I have him booked every Tuesday morning at 9 a.m. And I know by Monday night if he’s not going to come in. And this has been an agreement for 11 years where he has come in, you know, once a week for 11 years. I gave him a big present last year at his 10 year anniversary. And I don’t apply my cancellation policy to him. If he ever decides to stop coming, I’m not looking to fill that Tuesday morning appointment; it’s kind of extra in my world. And he buys a 10-pack. I send him a little invoice through Square every 10 weeks — or kind of 13 weeks-ish nowadays because we kind of miss some weeks. He’s cool if I’m away. We don’t try to rebook him at a different time in that week; I just don’t see him that week. It work — it’s a great arrangement. I have a couple other clients who I offer 10-packs to as well. They are people who have been with me forever, and I give them flexibility on it in that if, you know, she wants to use one for her daughter when her daughter’s home on college break, we do that. And it works really nice. I like getting that little bump and — every, whatever, 8 or 10 months depending on how frequently they come in. I like having that buffer in my savings account, and there are people who — and also, at any given point, I’m prepared to refund someone for their package, which I have done. I had a client fire me. He was about six massages into a 10-pack, and I was kind of thinking about firing him too. So he asked — he’s like, yeah — well, it wasn’t very nice. But he was like please refund me the remainder of my package, and I wrote a check that day. So you have to be prepared to do that if that’s how you want to roll. It worked out really well, and that is all I have to say about packages. I’m going to really going to wrap it up. Sorry, I tangented there. Go, Michael.

MR Oh, great. The only thought I have is if anyone is feeling bad about, like, discounting for packages and they still are kind of not sure about that, there is a very real thing called the time value of money. And it’s a real financial principle in that even though the literal value of money is the same today as it is three months from now, the — from a use — a usefulness standpoint or practical standpoint, money in your hand now is more valuable than money in your hand in three months. So it’s a real thing. So the time value of money is a factor. So even if you feel like it’s discounted now and you’re not sure about that, money sooner does have more practical value than money later.

AH That is very interesting.

MR Yeah. It just look — google time value of money. It’s a real thing, yeah.

AH Huh.

MR You have more options and you can do more with it. Obviously, like you said, you have to make sure you’re ready to give it back, but if you have, you know, ten packages that have pre-paid, I mean, the chances of all ten of those people asking for their money back is pretty much astronomically small. So you still have plenty of money cushion to do other things with. Obviously keep it on hand, be ready to refund it, but at least some of it can be useful now to start investing in your business now as opposed to later, which gets you further ahead and gets you more momentum in your growth.

AH Well, that’s also brilliant. So rock on.

MR This episode is full of brilliance today.

AH (Laughter) I don’t really know what to do with that.

MR (Laughter)

AH All right. Well, that’s it. That wraps it up for me.

MR Cool. Love it. An thank you to our community members and listeners who have contributed. A lot of good stuff in this episode today. So with that, we will wrap it up for now.

So thanks everyone for joining us and putting up with our snot and our hardware issues and our sound issues and all that stuff. We love keeping it real here. So thanks so much for being with us today. If you have any questions or comments or topics you want to kick around with us, email those to us at podcast@massagebusinessblueprint.com.

Aside from that, just — we have some cool stuff coming up here in the business. I can’t talk about all of it yet, but one thing I want to talk about is next month we have a really cool episode coming up where we have a special guest who is a Google My Business expert. And he’ll be coming on the show to talk about Google My Business and how you can use it as a very powerful tool in your massage practice to get your website found and your practice found on Google more easily, and ideally, book more business from that. So it’ll be a really cool episode. So that about – sometime next month we’ll have that released and —

AH And while we’re geek-ing out —

MR Yeah.

AH — an episode about pricing, we’re actually going to have a guest episode pretty soon with David Lobenstine, who’s going to talk about sliding scale pricing, which —

MR Oh, nice.

AH — a lot of people have talked about. So that’ll be in a couple of weeks. And — we got some cool guests coming up. We’re going to — we got a lot. We got a lot of cool stuff going on. I’m excited about this spring. And actually next week on next Friday’s episode, I am going to announce a really cool project for May that everyone is going to be invited to join. And that’ll be really cool, too. So get ready, folks. Once I can, you know, find a proper allergy medication and some Sudafed —

MR (Laughter)

AH — then we will — we’re going to knock stuff out. It’s going to be great.

MR So if you haven’t gotten around to this, now is the time to share this podcast with a friend who doesn’t know about us yet because it’s only going to get better and better. We got some cool stuff coming up. So thanks again. Our website as always is massagebusinessblueprint.com. Check us out there for more information about us. And again, thanks so much for being with us. We will see you next time.

AH Bye.