Momentum Dental Business Consulting, LLC
"Pearl of the Month" (Vol. 2, Issue 2)
Pertinent comments on the practice of fee for service dentistry.
by Michael Perry, D.D.S., President
What's Up With Your Practice!
Marketing in Fee-For-Service Dentistry
I've experienced much hearsay from dentists recently that new patient counts are down. In my practice, new patient counts from referrals are down about 20% in the past 3 years from what they were in the previous 3 years. They are also down in my practice about 10% per month in 2004 versus what they averaged per month in 2003.
A favorite pastime of dentists during slower times in their practices is to speculate with staff and peers why the slowness is occurring. Because of my status as a business consultant, dentists often expect me to know why their practices are slower and why new patient counts are down.
I am comfortable making general statements about down cycles, but business expert or not, no one knows with certainty why these cycles occur nor how to predict their appearance. In my experience, however, the relative volume of business within practices does not always parallel the state of the economy nor the business cycle. Dental practices in general and individual practices in particular often have cycles of their own.
Types of Marketing:
Marketing has been defined as "activities performed to attract customers or business." One could apply this definition to almost any activity related to a practice -- in or outside of his/her office that a dentist is involved in. It is useful, however, to divide marketing for fee-for-service dental practices into two categories: foundational and promotional.
Foundational marketing strategies establish and solidify your image and reputation with your patients of record and within your community at large. Along with office design, decor, and equipment, components of these strategies include logo, stationary, practice brochure, patient newsletters, and welcome packets for new patients. All are helpful in elevating a dentist's stature with existing patients and interested prospects.
Promotional marketing strategies involve activities outside of the practice. Obviously these could include advertising. In addition, they could include public service activities which elevate the community's awareness of the dentist's presence and altruism.
Foundational marketing strategies and public service activities are time tested methods of building a strong practice and I confidently recommend that dentist's use them. Even if a dentist chooses to use the higher risk, but potentially faster approach of practice building through advertising, these more traditional strategies solidify a practice and make it less susceptible to negative market fluctuations.
Advertising
As a dentist today, my experiences with advertising have often been confusing and frustrating. Unlike most dental procedures, it is often difficult to predict the results. When I first started in practice as an associate in 1979, the owner/doctor of the practice where I worked advertised in a local "throwaway" periodical. His back page ad alone brought in 25 new patients a month. The ad offered no financial incentives for coming to our practice -- just communication that we were there and were friendly professionals. I'm convinced much of the ad's success came from the fact that very few dentists in our community were advertising at that time. Advertising was easy then because there was no competition.
Today, advertising for new patients has become sophisticated and
competitive. In most communities, few if any effective and at the same time inexpensive strategies remain for attracting "A" patients. Those that achieve consistent success, generally have large advertising budgets that force a busy and more stressful practice model. The end goal of advertising is to increase practice revenues. Large budgets force the dentist to do a significant amount of dentistry to pay for the advertising itself -- before the next round of procedures are done to meet revenue goals.
Marketing Experts
In my experience, it is a rare dentist who has the ability to produce a strategic marketing plan and then create the various components of the plan with sufficient quality to be effective in today's marketplace. Most are much better off working with an experienced professional. The great majority of the marketing materials I utilize for both my practice and consulting company were designed and created by one company.
More and more, success in fee-for-service dentistry seems to be favoring those who not only have good clinical skills, but superior entrepreneurial skills as well. To me this has created new challenges, but also new excitement in our profession. If you have questions or would like to communicate with me about marketing or other aspects of the business side of your practice, please don't hesitate to e-mail of call.
(For more information about Momentum or Dr. Perry, visit the Momentum web site at www.momentumdental.com or e-mail Dr. Perry at info@momentumdental.com)
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