These days, this is the question that we are asked the most. Howie and I just finished an article on this subject for a dental trade journal. In that article, we were limited to 1,000 words. Since this is our newsletter with no limits - we can expand on the subject a bit.
Our firm (NPI) has been working with dentists exclusively since 1990. We have managed client marketing budgets through multiple economic downturns, so - this isn't new to us.
Our goal with this article is to communicate the reality of this slowed economy, its potential impact on different "kinds" of dental practices, and provide general guidance as to where you might look for improvement.
We do understand that certain areas of the country have been impacted more than others. Michigan, Ohio, the Buffalo/Rochester New York corridor, Las Vegas, parts of southern California, and other parts of the country have been hit harder than most. If you practice in one of these areas, just take what we are about to say and add even more importance to it.
The biggest overriding economic reality that is directly affecting your dental practice is the 2.3 trillion dollars of home equity that basically vanished.
The entire US economy is balanced around 60 trillion dollars (to put it into perspective). So, 2.3 trillion dollars is quite a chunk to pull out of the economy in a very short amount of time. Do not underestimate the importance of how quickly that money vanished. No matter what your political viewpoint, gas/food prices and the war are NOT impacting your practice anywhere near as much as 2.3 trillion dollars of consumer liquidity vanishing. POOF!
There is a reason big ticket items are being hit hard. Home sales, big autos, bigger boats, higher end travel destinations, high ticket home furnishings, even those fancy new washers and dryers that load from the front are struggling. Higher end dentistry will too.
Who (which dental practice type) will get hit first and hardest?
The cosmetic/full mouth rehab focused practice, in even a moderately competitive market area, will be the first to get hit and the hardest hit. There is a necessity vs. elective mindset in the market. The farther away you go from family dentistry toward cosmetic/full mouth dentistry - the more "elective" the market perceives the dentistry.
The real killer though is the 2.3 trillion in unavailable funding. Between 2001 and the latter part of 2005, those extreme makeovers you were doing were largely funded by home equity lines or loans. Well, that home equity has all but vanished for the vast majority of the population. If you combine an elective perception and lack of available funding, you get a slowdown. In some markets, like the markets mentioned above, a drastic slowdown. The recovery in dentistry will follow the recovery in the housing market.
Which practices will weather the storm more than the rest?
Well, my usual response still applies. Dentists in better doctor/patient ratio areas will weather the storm more easily than those in competitive market areas. Dentists in competitive areas with little to no dental marketing will weather the storm more easily than dentists in competitive areas where most of the dentists are actively promoting their practice.
In addition, any practice that caters to complete family dentistry, children's dentistry, and pedo/ortho will weather the storm very well. Mom doesn't stop spending money on their children during a recession. Pedo is as close to recession proof as you can get. Besides, there's a shortage of good pedodontists out there.
Focusing on kids through the storm will give you a huge head start attracting mom, dad, grandma, and grandpa when the storm is over. If I were to be forced to over-allocate a marketing budget into one aspect of dentistry during a recession - it would definitely be allocated toward attracting as many children into the practice as possible.
I realize many of you just winced.
For some of you, bringing more kiddies through the practice is the LAST thing you want to do. I would submit, no, the LAST thing you want to do, is not make payroll. The SECOND TO LAST thing you want to do is bring kiddies into the practice!
But, it's your practice. It's your call.
What to do? Internal.
Besides what I mentioned above, the first thing we recommend is to pay more attention to your existing patient base. There is likely a tremendous opportunity for practice growth within your own patient base. Between 2001 and 2005, you were all pretty "fat and happy". Many times, promoting the practice within the existing patient base becomes complacent during "fat and happy" times. Now is definitely the time to pay more attention to your re-care system, communicate with your existing patients, and promote services to your existing patients.
What to do? Get your house in order.
Since every new patient inquiry is gold, the next thing we would recommend is implementing CallSource to quantify exactly where your new patients are coming from AND to get your front desk trained to answer the phones properly. Both of these are even more important during slower economic times. If you CallSource your external marketing efforts, you can listen into the phone conversations from inquiring new patients. In most cases, it's an eye opener. If you're interested in CallSource - just contact us.
What to do? Proper budget allocation.
The next thing we do with clients is allocate marketing dollars to what we KNOW works best in their particular market area. You should do the same. If you have been successful promoting your own practice in your market area before, over-allocate your marketing budget into the medium that has historically worked and stick with it until the economy picks up.
What to do? Design Shift.
However you promote your practice (yellow pages, direct mail, print ads, radio, TV), start to change the design and message to be more all inclusive, or more family oriented. We will give you an example. We see this mistake all the time. Let's say you are currently advertising your practice on the radio. And, it's been successful in the past. The focus/message of your ad is sedation dentistry. Sedation dentistry is one very small aspect of what you do every day. Do you give every patient a pill before you recline them in your dental chairs? No, of course you don't. So, your marketing dollars are paying for radio ads that only communicate one small aspect of what you offer the community.
What if you had the same ad budget with the radio station but you had 4 different scripts that were rotated throughout the airtime? You certainly might have one script for sedation, but how about one for emergencies, one for family dentistry, and one for metal-free dentistry.
The public at large will begin to know you as the all inclusive dentist, rather than the dentist that "just does" sedation. Your practice will be attractive to MORE PEOPLE for the same marketing expense!
Take special note of that last sentence. We can't tell you how many times a new client has told us that their previous marketing made people believe that they "only" provided sedation dentistry (or "just" cosmetic dentistry).
Be honest with yourselves, have any of your patients ever asked you if you do "regular" dentistry? If so, there should be alarms going off in your head right now.
What do to? Be patient (no pun intended).
Of everything we just wrote, this one is likely going to be the toughest for you to apply. Effectively and professionally promoting a dental practice is NOT a short term endeavor. Proper promotion IS "a careful application of budget resources over the life cycle of a dental practice".
When the overall economy slows, that means we just came out of a period of time when things were easier. Patients were easier to attract to dental practices between 2001 and the latter part of 2005. If you weren't impatient then, now is no time to start being impatient! Impatience will cause you to make terrible decisions on where to apply your marketing budget. You will bounce around with a "try this and try that" approach that is never the right thing to do.
Mr. Dilatush has a unique combined background in dental technology, dental practice management, practice marketing, and dental business analytics, which was built over the past 23 years in dentistry. He and his team are responsible for building client marketing plans that pose the least risk to client marketing budgets with the highest potential return. Howard Farran said of Mark, "multitudes of dentists have benefited from the wisdom and integrity that Mark brings to every project. His thoughtfulness and sincere approach has aided scores of dentists in finding their path to greater dental success."