making a successful practice a successful business
In the book Gerber talks about his view that most practices fail to fulfil their potential not because of any lack of clinical skill, or because of external influences such as managed care, defiant insurers and increased costs. Instead, Gerber suggests that the real issue is that the clinicians are not prepared, in a business sense, for what is about to happen to them.
Now I doubt that even a renowned business guru like Gerber could have been adequately prepared for the dramatic PRSI changes announced in December. Many of us can be wise after the event, and point to the signs that suggested such a move by the Government was on the cards. However, the speed at which the goalposts moved would have foxed even Wayne Rooney at the height of his form.
The task now is how best to adapt to these new circumstances and deal with the business challenges in the years ahead, to ensure you stay in control of your practice.
a vision
So where do you start? Well, as Stephen Covey puts it in his excellent 7 Habits tome, “begin with the end in mind” and yes that does mean having a vision. You can be hard pressed to attend any business lecture without the virtues of a vision being extolled and whilst the logic is easy enough to grasp, applying the theory to a dental practice is not always quite so obvious. After all, a dental practice is a dental practice isn’t it ?
Well, there are an increasing number of valid business models that can be adopted by dentists, and settling on the right one for you and your team can give focus and motivation. Will you be a family practice or will you target a particular patient group ? With the rise and rise of interest in aesthetic dentistry, how will you strike the most appropriate balance between health and beauty? Where do you feel you should pitch yourself in terms of pricing?
And, don’t forget about your life outside of the practice. A business model that requires you to work enormous hours at the expense of your health, family and friends is unlikely to be sustainable. Real success ought to be defined by the way in which you can blend your career in with the other important components of your life without creating an imbalance.
the market
Describing your ideal practice is unlikely to be an exact science and you could well evolve in unanticipated directions as you take advantage of unexpected opportunities or deal with emerging threats. This process can be helped by keeping a reasonably regular check on what’s happening in the community around your practice and also the wider environment.
Further political developments with the Medical Card and regulatory matters concerned with decontamination and other cross-infection control issues are likely to impact on your practice at some point in the future. Anticipating the likely implications and building that in to your planning will only be helpful.
Understanding the economic and social factors affecting the people in the area from which you are most likely to draw patients can also give you a steer as to the suitability of your ideas for the future of your practice. Of course, it doesn’t take a genius to work out there are locations where plans to evolve in to a practice based largely on cosmetic dentistry and full smile makeovers might struggle. However, it can be easy to get caught up in the technical appreciation of what you can offer and forget to check the full extent of the market for such services.
Of course the size of the market is one thing; your ability to tap in to it is another, particularly when there is so much competition for the Euros in the pockets of your patients. And competition doesn’t necessarily mean other dental practices, as there are many other ways that patients could choose to spend their money than on dentistry.
branding
Effective communication of the benefits of the services you have to offer is therefore key and presenting them in the most appropriate manner requires careful thought whether to potential or existing patients. This is partly about improving patient awareness of what can be done for them in a technique and procedure sense. It is also about conveying the manner in which the services will be provided. Formal or informal, overtly clinical or more relaxed setting, exclusive or inclusive, there are different ways of handling different patients and it is often these softer criteria through which patients make their choices.
In the wider business world, such characteristics are communicated through the brand, a concept relatively undeveloped in dentistry but one that is not new. Even when the only information a dentist tells you is that they have a practice in Harley or Wimpole Street, England, certain traits of such practices and their patients come to mind. And now, such ideas have found their way out of central London and practices further afield are seeing the benefits of creating a strong brand personality and visual identity that acts as a shorthand for the type of practice they are.
Not only can a brand be used to attract the type of patients they are targeting for their chosen business model, but it also puts off the people they are not targeting, saving all concerned time and inconvenience. This in itself is an important acknowledgement as a practice becomes a business – that it is wholly appropriate not to be all things to all people.
As most people are aware, underpinning successful brands is an almost anal sense of consistency. This applies to the customer service that is provided by the entire team where one weak link can undermine all that for which you are striving. As Jim Collins describes in his classic business book From Good to Great, truly successful business leaders get “the right people on the bus” as they create their teams and head off in the pursuit of their goals. In small teams, this arguably has heightened significance as a wrong attitude can quickly infect those well motivated around them.
That sense of consistency also applies to those things more often associated with brands such as logos, business name and all the marketing collateral that goes with it from welcome packs to referral cards to signage to adverts to websites. Given changes to the promotional freedom of practices are still relatively new, this is not going to become essential overnight. However, a strong visual identity that sums up what you want to stand for in the eyes of your patients is likely to become more important in the years ahead and it will be worth making short term decisions with that medium to longer term picture in mind.
the potential of your existing patient base
It can be easy to be fooled into thinking that this is all about attracting new patients to the practice but in fact, it’s more often about shoring up the relationship with your existing patients. Like renowned dental business coach Chris Barrow often says, paraphrasing Dan Sullivan, “all the money you need for the rest of your career is in the pockets of your existing patients and the people they can introduce you to.” So, before too much money and effort is put in to innovative but expensive promotional campaigns to secure new patients, make sure you are not missing a trick with your existing patient base.
For example, while patients rarely seem to consider going anywhere other than their trusted dentist for their examinations and treatment required to maintain their health, some seem happy to shop around for cosmetic dentistry. I’ve lost count of the number of practitioners who can relate tales of regular patients arriving for their six monthly sporting new cosmetic work that could have been provided at the practice but wasn’t. This must say something about the effectiveness with which the practice is communicating the availability of these services, but also the practice’s understanding of the needs of such patients.
Both understanding and loyalty are obviously enhanced by the regularity with which patients attend the practice, and the changes to the PRSI raise the spectre of a significant proportion of the population postponing attendance for routine examinations and scalings. As well as the difficulty of maintaining an effective preventive regime for the patient in such circumstances, there can be serious business repercussions such as disruption to your cashflow.
loyalty through dental membership plans
For hundreds of practices in the UK, such challenges have been addressed through the use of dental membership plans, where patients pay a monthly fee for a defined list of services. Such plans are sometimes confused with traditional dental insurance, which can lead to concern amidst reports of conflicts between the profession and the insurers, such as those arising recently in the United States.
A little confusion is understandable given some superficial similarity from the patient’s perspective. Furthermore, one of the UKs plan providers is owned by a global insurer and all the major players offer a small dental accident and emergency insurance component to their plans.
However, there are significant differences that distinguish dental membership plans from dental insurance plans such as the fact that there are no “claims” for routine care made to the plan provider. Instead, the dentist determines the monthly amount necessary for the patient to be registered as a member of the practice in return for which the patient is provided with a number of benefits. These can include a given set of services, such as, for example, one examination to supplement the examination covered by PRSI, and biannual hygienist visits, as well as
x-rays, discounts off treatment and that small insurance element to cover unforeseen dental accidents and emergencies.
The dentist then simply elects to subcontract out the collection of the monthly membership fee to a third party who can also arrange for the insurance element to be put in place for patients. Although plan providers can offer alternatives, the membership fee is usually collected by direct debit which creates a bond between the patient and practice that enhances patient loyalty.
With the dentist in control of plan structure and the level of monthly fees, any lingering confusion between dental membership plans and dental insurance can often be addressed through determining if the third party considers the patient their customer or the dentists.
growth through advocacy
Of course, simply bonding your patients to you through mechanical means is not enough to secure the long term health of your practice - you need them to be so happy with the care you have provided that they will happily spread the word to others. Indeed, according to Fred Reichheld, the esteemed business strategist, the willingness of customers to recommend you correlates more significantly with their loyalty than their degree of satisfaction. So much so, in fact, that Reichheld believes you can simplify customer satisfaction surveys down to what he terms “the ultimate question” which simply asks for a score out of ten in terms of likelihood to recommend.
Monitoring answers to this question not only allows you to keep track of how well you are doing in terms of securing patient loyalty, but a positive response make your team feel more comfortable encouraging patients to actually refer friends and relatives. Creating an army of advocates from your existing patient base must surely be not only the most cost effective way of growing your practice, but also the most satisfying.
opportunity or threat?
For many dental practitioners, the changes to the PRSI represent an upheaval, the extent of which they have never before seen and it will take some time to adjust and to plan for life in this different world. However, as irritating as the optimists are, the chances are they are right when they say this is an opportunity to take back control of your practice and it is one definitely not to be missed.
back to Nigel's articles
