About six months ago as I was flipping through dentistry journals, I saw the first advertisement using the “R” word: recession. It is easy for a dentist, as a small business owner, to get wrapped up in the drama of the news headline and mistakenly blame their practice problems on the economy. In my 30 + years as a dental consultant, I have certainly had an opportunity to hear about the ills that an economic downturn may create, and I have learned that there are basic truths and ways to recession proof your dental practice. Dentists who actively engage in their business can survive and (dare I say it?), prosper during any economic twist and turn.
Is Dentistry Recession Proof?
The most important of these truths is that dentistry is recession, depression, and any other type of financial disaster proof. Why? Both functional and cosmetic dentistry is wanted and needed by many people, always. There will always be patients who desire ideal oral health and have the where-with-all to pay. Dentistry, in contrast to medicine, is defined as high frequency-low cost. If we compare quadrant dentistry to how much an emergency room charges for a couple of Tylenol and an X-ray, the facts reveal themselves.
Most importantly, even if we currently are in a downturn, we are dealing with the baby boomer peak population. The boomers (including me) are not growing old gracefully and are at their highest level of need when it comes to restoring function and maintaining aesthetic excellence as a tool for hanging on to youth. The bottom line is that there are patients out there who will want and pay for your services. It's your job to find those patients, discover what they need and want and then present dental solutions in a way that they can value and commit to.
Secondly, very often it is the dentist's decisions, made in panic, which creates scarcity, chaos, and failure and not the situation itself. For example, the advertisement stressing the “R” word was promoting an item that a stressed dentist in a panic might purchase as a silver bullet for a bad month. It is important to avoid making a purchase based on fear and without a plan. Without a consistent brand identity, a strategy with planned results and of course a pro-active focus on a return on investment, the chances of a panic campaign being successful are slim to none.
Four Ways to Recession Proof Your Dental Practice
So, when there is the fear of scarcity going on, what is a dentist to do? There are four distinct, proactive actions that you can take to recession proof your dental practice and ensure continued success. By embracing and following these steps, no one ever must lose. Where do you start?
#1 – Know Your Numbers
Which numbers are most important to be aware of during economic slowdowns? It is vital to know your regular active patient base (any patient seen for anything in the last eighteen months, counted once), your new patient numbers, your treatment presentation numbers, as well as the traditional production, collection, and expense numbers. The dental practice statistics are essential so that you as a business owner can make informed decisions based upon sound strategies, not judgment. For example, if you feel that you need thirty new patients a month and are willing to spend $60,000 -$100,000 a year to get them, how would you know when you have returned your investment? Are those thirty patients presenting the kind of dental needs that fit your practice's vision and values? Are they committing to treatment, following through on financial arrangements, and referring others? If a dentist does not know the answers to these questions, you could have hundreds of new patients and wind up producing less and realizing no real ROI.
#2 – Know Your Patients
There is nothing worse than a dentist diagnosing a patient through their pocketbook. The only way a practitioner can find out what motivates, and concerns patients is to ask questions, and exhibit empathy. By getting to know your patient in this way, you can create a treatment plan and accommodate their needs.
Sometimes it is important to acknowledge a regional issue. Many of our dentists who have experienced regional, economic downward trends have sent out what we call state-of-the-nation letters as a pro-active marketing tool. These letters assure patients that their dental office will always deliver the best clinical care and address the economic obstacles by offering flexible financial arrangements so that ideal dentistry is always affordable. It is your relationship with your patients that is the strongest good will you possess. Patients who like and trust you will always rise above financial concerns to achieve the optimal oral health.
#3 – Adapt Your Systems
There is some dentistry that can be completely discretionary (i.e., cosmetic dentistry). A patient may say “maybe” to discretionary care, but they will still say “yes” to functional or basic oral health necessities in an economic downturn. Adapt your systems to tap into this market. Instead of targeting twelve full mouth reconstructions per year, a practice may need to do twenty-four $3,000 -5,000 cases instead. A flexible dentist may need to change their marketing, new patient screening, and new patient process or treatment presentation for patients of record to address the concerns of the day. Financial arrangement systems may need to become more flexible and insurance processes may need to become more efficient. Address these issues proactively versus reactively when you are knee-deep in the commotion of goals not being met.
#4 – Stay the Course
Finally, but most importantly, stay the course. The good news for the dentist is that while a restaurant or retail store can fail when the economy shifts, when you do the right thing for the right patients you will flourish and prosper. A bad month does not mean a bad year. Three patients that say “no” does not mean that the fourth patient won't say “yes.” Your goals and your strategies, if they have worked in the past, can work again.
So don't hit the panic button. By re-engaging with your business, knowing the numbers, adapting your systems, and staying the course, you can recession proof your dental practice and never fear the “R” word again.
Amy Morgan is Vice President of Consulting Strategy, a member of Spear Resident Faculty, and former CEO of Pride Institute.