Dental business coach, Chris Barrow, offers some advice on the need to increase prices and how to handle the change.
I present at a number of different events and workshops for Practice Plan and I have found that over the 26 years that I’ve been doing this, the finance workshops always have the worst turnout without fail. And that’s been consistent all the way through the years.
So, if you are running a session on marketing, everybody wants to hear about marketing. If you run a session on the patient journey, everybody’s in. If you’re on a session on leadership, management, how to build a team, everybody’s in. You run a session on finance, nobody wants to go. However, I think it would be fair to say that today it’s probably more important for us to be talking about finance than possibly at any time since 2008 when the banks collapsed.
You have to increase to survive
We all know that energy costs have gone up and supply costs are going up. And most importantly your wages are going up because of the recruitment and retention crisis and the skyrocketing cost-of-living. My energy bills at home have gone up. They went up 56% in April last year and another 7% in October. They’ll go up by another 40% this April according to my energy provider. Year-on-year that’s a 100% growth in my energy costs at home. I have clients in dentistry who are telling me that their energy costs are going up by 300%.
So, your wages have gone up, your energy costs have gone up, your supply costs have gone up. If you don’t pass these increases on to your patients in the form of a price increase, you are going to struggle in the coming year.
A lot of dentists are concerned that if they increase their prices they will lose patients. However, providing your increase is enough to compensate for the increase in costs, you can afford to lose a few patients and still be OK. At the moment, I am advising increases of 15% fee per item for check-ups and hygiene and 25% for every other item of treatment, with immediate effect.
I was at a meeting with around 40 practice owners recently who had all increased their prices by between 10% and 25%. When I asked if any of them had experienced kickback from the patients, there was silence. Nobody is batting an eyelid, apart from the people who are serial complainers and every practice has those! Patients are aware that the price of everything is going up so most of them will just see it as part of the wider picture of the state of the economy.
Prepare your team
However, before you do increase your prices, you need to sit down with your front of house team and get them trained up so they can respond to patient queries and deal with the serial complainers. The best way to do this is to give them a phrase they can use as an answer when somebody says, “Why have you put your prices up?” There is only one thing they need to say in these circumstances, which is: “The reason that we’ve reviewed our prices Mr/Ms Patient, is in order to maintain our standards of customer service and clinical care.” You should use that response because the only reason you did put up your prices was to maintain your standards of customer service and clinical care.
That response covers the whole gamut of what’s going on behind the scenes at the practice. Leaving your receptionist in the position where they feel they have to say, “Oh well our lab bills have gone up a lot,” is just hanging them out to dry. That one simple phrase is all they need to use.
So, once you’ve got your front of house team word perfect, then press the button. And if you lose a few, you lose a few, it won’t make any difference in the long term. You lose a few whatever you do when you make changes but the extra income from the increase in prices will compensate for that.
Chris Barrow has been a trainer, consultant, coach and mentor to the UK dental profession for 26 years.