Have you ever wondered how airlines manage to post record profits year after year, despite fierce competition and rising costs? The answer lies in their approach to setting fees. Traditionally, fees were viewed as a necessary evil, an additional cost burden for passengers. But what if we flipped the script and saw fees as a strategic tool for success? The airline industry has mastered this art, and there's something valuable we can learn from their playbook.

Think about it. When you book a flight, the base fare may seem reasonable, but it's the additional fees that start to add up: baggage fees, seat selection fees, onboard services, and more. These fees have become an integral part of the revenue model for airlines. According to industry reports, airlines generated a staggering $75.6 billion in ancillary revenue in 2019, representing a 21% increase compared to the previous year. 

By unbundling services and charging separately for them, airlines have found a way to tailor the experience to individual preferences while increasing their overall revenue. It's a win-win situation. Passengers have the flexibility to pay for only what they need, while airlines generate more income to invest in improving their services and profitability. Unfortunately, most professional practice owners only have one fee and no options for consumers to upgrade or add customized plans and options to their product or service mix. 

It’s not only a smart customer service strategy to give consumers the options they want, but it’s also good for business. When it comes to your most common products and services, sell them at different levels. Think “good, better, best.” Just like airlines have basic economy, economy plus, first class and even private jet service (Delta Private Jets became WheelsUp), your business can offer the consumer different options or ancillary products and services. This changes the conversation around price from “yes/no” to “either/or” and the customer gets to choose the solution that works best for them.

I know what you might be thinking. “I’m a doctor, not an airline," but if you're running a private practice, it's wise to recognize this truth: some of the best ideas in business come from outside your industry. Did you know the fast food industry learned about drive-through windows from banks? How many bankers would show up to the next fast food industry trade show? They should. The food service industry continues to roll out new interactive kiosks each year that are much more robust and user-friendly than the average ATM at a bank.

Now, what if we applied this thinking to your own business? 

Instead of viewing fees as a necessary evil, consider how you can strategically set your fees to better serve your clients and boost your bottom line. Think about unique services you offer and whether they could be unbundled or offered as optional extras. We did this years ago by offering all of our patients the standard 8am-5pm office hours, but if they wanted to guarantee 7am-7pm appointment times and secure a discount for the entire family, they had to purchase a membership subscription at one of our clinics. I noticed in my own life that I would gladly pay extra for a tailored suit versus off-the-rack. I would pay extra for early or late gym time with restricted visitor numbers, so I didn’t have to wait for a machine or sit in a crowded steam room, sauna or hot tub. I gladly paid extra to fly first class, when I flew commercial, so that I could get to my connection quickly and sit in a quiet lounge, away from the hustle and bustle of crowded airport terminals. I asked myself why wasn’t I offering different tiers, ancillary products and additional services in my own business. I didn’t have a good answer, so I did something about it.

You can create a more personalized and valuable experience by tailoring your fees to meet the specific needs and preferences of your clients. So, what innovative ways can you explore to rethink your fee structure and enhance your business model? The possibilities are endless and the good news is that almost none of your competition thinks this way, which presents a strategic opportunity for you and raving-fan service for your patients.