Make Interest-Free Financing Work For You
Zero-percent financing turns prospects into refractive surgery patients.
BY JIM BROCATO

Refractive surgeons have a wide array of marketing strategies to reach potential patients. These often include co-management, corporate contracting, and the acceptance of credit-card payment, as well as their standard advertising campaigns.

I encourage my clients to review all their marketing strategies and the costs associated with each of them. These costs include the practice's reduced fee for corporate contracts, co-management fees and credit-card processing fees. While these costs are widely accepted as "part of doing business," they'realso usually imperative to sustaining procedure volume.

Surprisingly, practices often overlook one of the most powerful marketing tools available: zero-percent financing. In the refractive market, many practices still don't comprehend the ability of zero-percent financing to maintain fee integrity while encouraging patients to shorten their usual 8-month decision-making process so they can take advantage of a wise cash flow decision.

For many industries, zero-interest financing has been a godsend. It allowed the automotive industry to post its fourth-highest sales year ever in 2002. If you're somewhat put off by the analogy between refractive surgery and the purchase of an automobile, I'll quickly acknowledge that LASIK is a medical procedure and clearly a huge decision in the eyes of the patient.

But think about the buying decision from the patient perspective. LASIK is an elective procedure, and, in many instances, the patient decision is not only driven by the reputation of the surgeon, but also by a practice's advertising, the patient's comfort level, and, of course, the procedure fee. This past year has provided a compelling story about patient buying decisions, or rather, their delay in buying decisions. Here, I'll explain why zero-percent financing can be a powerful ally in helping to increase your refractive volume.

Like millions of Americans in 2002, I did something I didn't expect to do: I purchased a new car -- a decision that greatly confused my friends. Don't misunderstand me: They all like new cars, but they thought the timing was terrible. "What's wrong with the old car?" they asked. "Why couldn't you wait for the economy to recover?"

The answer is that financing rates dipped so low that it was an opportunity I could no longer afford to pass up. I felt the need to act, and act quickly. Many other Americans felt the same way. Today, the economy is still sluggish, and people will only make nonessential purchases if they're certain the deal really is too good to pass up.

Just like 2002 was a good year for the auto industry, it was also a good year for several practices I advise. Part of their success has been due to making zero-percent financing and flexible financing for refractive procedures a part of the advertising mix. By utilizing interest-free financing, auto manufacturers have been able to raise prices an average of $4,000 per car without compromising volume. This same principle can be applied to marketing custom ablation. Selling a better -- and higher-priced -- procedure can be much easier by adding interest-free financing to the deal.

Why "Zero" Works

Price cutters and low-cost practices are quickly disappearing from the LASIK market, but they created a long-lasting negative effect on overall refractive surgery pricing. If car manufacturers had decided to reduce prices on automobiles to half of previous levels, they would have permanently destroyed their long-term income and been quickly on their way to bankruptcy. Zero-percent financing and flexible financing proved to be effective alternatives to price slashing, and these same tools are available to the refractive patient.

Patient financing companies are providing valuable and convenient financing to LASIK patients, and for many practices, their no-interest financing programs hold the key to sustaining refractive volume during a sluggish economy. When seeking out a financing partner, a practice should look for one that:

Proactively offers interest-free financing. Choose a company that uses patient-friendly brochures and clearly stated informational charts that call out the benefits of its zero-percent program.

Has high approval rates, specifically for interest-free financing. Some companies use a "bait and switch" technique that advertises interest-free financing but then pushes a fixed-term loan with lower approval criteria. This reflects negatively on the practice and lowers the percentage of prospects converting to surgery.

Integrates into your current office flow. Your financing company should help you maintain control of the patient. Walking patients through the financing process greatly improves your ability to schedule a procedure. Instead of waiting for the patient to call back after approval, they can be scheduled immediately.

Patients Welcome It

To take full advantage of the no-interest financing opportunity, refractive practices need to make the patient aware of financing options sooner, and more aggressively. Too often we lose the patient during the phone consult for reasons we'll never understand. When we consider the average LASIK shopper, we find:

• those who can't afford to pay cash and are too embarrassed to admit it over the phone
• those who aren't willing to part with their cash
• those who are willing to pay cash and are merely seeking a practice with a good track record with LASIK at a good value.

No-interest financing options have great appeal for all of these potential patients and can help greatly in shortening their decision timeline.

I know that there are still some folks out there who see zero-percent financing as less than an ideal proposition for surgeons, mainly because it usually comes with higher processing fees for the practice. Others say that these loans only wind up converting cash payers to credit customers. Let me answer those criticisms.

If you were to take a poll and ask surgeons if they would accept a 10% discount off their usual fees to book a patient that day, I would bet that 90% or more would say yes. This being the case, why wouldn't the surgeon/practice offer interest-free financing up front to help close the deal. Zero-percent financing is a marketing tool and should be treated as such. All marketing events have some cost associated with them and the cost of "0" financing is a set fee.

For those surgeons who are concerned about converting cash-paying procedures into financed procedures, I believe the number of such patients is relatively small. You have to remember that you're providing a service. We need to meet the needs of all of our patients. If zero-percent financing puts more of them in a position to buy and be happier about the procedure, then we should be using it.

These happy patients will not only talk about the great outcomes they received, they'll also let people know that the procedure is affordable. This simply opens the door for more patients -- patients who hadn't seriously considered the procedure because of cost.

Once your practice has committed to offering financing, you must successfully integrate it into your overall philosophy, marketing and patient processing.

Use Internal Marketing

Even if your practice has no advertising budget, you can still successfully promote zero-percent financing internally. Train your refractive coordinator and phone schedulers to offer zero-percent financing early during the initial phone conversations and consultations. They should be knowledgeable enough to answer specific financing questions that patients may have.

Before you spend a single dollar on advertising, your staff should be completely comfortable and supportive of the "financing story" when presenting your patients with fees. Although internal promotion won't dramatically increase the number of patients contacting a practice, when properly executed it will positively affect the decision process of those who do. Here are three tools that will help:

Train your phone staff on promoting your unique practice story and expertise. Phone protocol is essential to any successful practice. If you have no phone protocol in place, I encourage you to develop one immediately. Encourage your staff to respond to fee inquiries by saying: "Do you generally pay by cash, credit card or do you take advantage of zero-percent finance plans when available?" This offers the patient an opportunity to learn more without being pushed into one type of payment option.

Educate your refractive coordinator on how to easily and quickly educate the patient on the financing process. When patients ask questions about financing, they expect immediate answers. Make certain your refractive coordinator is trained to answer any financing questions so as not to discourage potential patients on the factor of price. Let the patient know how easy the process is (a phone call) and how immediate the approval process is (less than 2 minutes).

Use in-office displays, such as brochures, posters and counter displays. Inside of your own office, you have multiple opportunities to educate potential refractive patients about financing. Keep the messages short and dynamic, encouraging patients to ask for more information.

Messages-on-hold is an ideal and extremely cost-effective means for letting your patients know that no-interest financing is available. As much as we try to handle all phone calls immediately, the reality is that most busy and well-run practices place a number of phone calls on hold for 20-30 seconds many times throughout the day. On-hold messages are a great opportunity for marketing zero-percent financing.

Create Effective Ads

I will continue to advise my clients that the promise of better vision should continue to be the main marketing message. Incentives such as zero-percent financing should always be secondary, but they can still be prominent. Flexible financing is a perfect addition to print and broadcast media campaigns, and need not detract from the main message of the advertisements. The message must meet the following three objectives:

Patients should be aware that zero-percent financing is available. As educated as your market may be, are they aware that they have the option of zero-percent financing? Most consumers believe that financing automatically translates into high interest rates, and they're afraid of hidden costs and balloon payments.

Patients should be directed to believe that small payments will fit into their monthly budget. Someone unable to afford $3,000 may still be able to afford $100 a month, especially if they know at the end of that time their total investment will still be only $3,000.

Patients should know that zero-percent financing might not be available in the future. No practice knows for certain what kind of financing will be available in the future, as there are too many factors to consider. When you tell potential patients that zero-percent financing is available now, but may not be available in the future, they are more inclined to act quickly.

Make the Most of Media

Small banners across the bottom or small "bugs" in the corner are ideal for promoting zero-percent financing in print ads. With radio, there's no visual stimulus to the patient so you have to state the message clearly, using action verbs to encourage the potential patient to take action. Avoid saying: "Zero-percent financing is available." Instead, use a call to action: "Take advantage of our zero-percent financing." Use patient testimonials to convey the message that financing made their vision correction possible.

In television ads, I've seen several practices insert scrolling type along the bottom of the commercial, which I discourage. Patients are distracted from the main message of the commercial when their attention moves to the type.

Instead, a small type "bug" should be displayed in a non-obtrusive way throughout the commercial, usually in the lower left or right corner. This message should be clear and concise: "Zero-percent financing available now" or "Ask about flexible financing options." Feel free to pick your own message, but don't make it too long, as the type needs to be large enough to be read easily.

Not every practice has a dynamic Web presence. Most practices employ informational "billboard" sites, which give a brief overview of services offered as well as biographical information about the attending physicians. For billboard sites, I recommend the addition of a small icon with a simple label such as: "Learn more about zero-percent financing." When clicked, it should link to a brief overview of your flexible financing options and give the patient information on how easy it is to be qualified. You can also provide a hot link to your preferred financing company so patients can apply for financing quickly and privately from their homes.

"Zero" Makes Sense

Any marketing strategy you use carries a cost. This cost makes sense as long as it generates patient volume. Co-management can cost approximately 15% of your fee, contract pricing generally decreases your usual fee approximately 10%, and credit-card fees take 2% of each transaction.

Offering zero-percent financing or extended payment plans usually costs less (between 5% and 10% of the financed amount) than most other marketing strategies. Zero percent financing can also be used as a tool to bring patients to the practice, as well as serve as a decision-motivator once these potential patients are inside.

Considering all of these factors, can you really afford to not include a zero-percent financing option in your current marketing strategy mix?

James A. "Jim" Brocato is a practice consultant with the Medical Consulting Group of Springfield, Mo. An accomplished speaker and author in ophthalmic marketing, Jim has expertise in practice operations, business development, marketing, optometric and primary care network development, and managed-care contracting.