Which side of the line are you on? Commodity vs Quality

 Which side of the line are you on? Commodity vs Quality

Are you finding patients are not taking you up on treatment?

Are you finding new patients hard to find?

Are you finding your existing patients attend less regularly and more transient?

Are you finding patients more inclined to use their treatment plan and shop around?

Do you attract new patients by enticing them with special offers?

A you noticing a downward trend on treatment plan values?

Are you working harder to earn the same amount of money?

 

Number of nos =

Number of yes’s =

 

The ratio of your yes: no answers will be determined by whether we using a commodity or quality pricing strategy. You may not have consciously chosen a pricing strategy your practice, and that does not mean that you don't have one. In this article I would like to share with you some secrets about pricing strategies that will benefit you in your practice in many ways. Making a conscious decision about the pricing strategy for your practice will have a beneficial impact on uptake of patients, making marketing easier, improve treatment plan uptake and that you in the driving seat of your practice.

What is commodity versus quality pricing?

Commodity quality pricing is happening all around you, and this is wonderfully exciting because you have the opportunity to learn from companies who are spending millions of pounds on marketing and not to spend anything yourself. The key is to keep your eyes and ears open, your senses alert and notice what is happening in commercial marketplaces around you.

 

There are many many products on the shelves today that are either commodity priced or quality priced, they are sold to and bought by different consumer niches, some examples are listed below.

Item	Commodity	Quality
Baked beans	own brand	Heinz
Flights	Ryanair	Emirates
Dresses	primark	Monsoon
Burger	McDonald's	Gourmet Burger
Car	Dacia	Mercedes
MP3	TMart	IPod
Suit	Marks & Spencer's	Giorgio Armani
Biscuits	Own brand	McVitie's digestive
Breakfast cereal	Own brand	Kellogg's cornflakes
Sunglasses	Boots	Raybans

 

Notice how commodity item is bought on price and quality equivalent is bought because of what it represents, superior quality and reliability.

What turns a quality product into a commodity product, and the price differential can be explained by the work done by Everett Rogers summarised in his immigration curves. And although Rogers work was first published in 1962 it is very relevant today in dentistry to explain the differences in practice profiles and patient purchasing habits.

 

Everett Rogers discovered that people have one of five characteristic styles when they are purchasing.

Innovators account for 2.5%, the buying population they buy new cutting-edge products that may or may not have been tried and tested however they are new. Typically products bought by innovators are expensive because they are bearing most of the research and development costs and you will probably only be open to purchase the item one or two innovative suppliers.

Early adopters will account for 13.5%. Again this group in the population are buying products that are new and innovative, they're not cutting-edge and are a safer purchase because the innovators have done the market testing and shown the product works. Prices at this point are still at a premium and the product will still be supplied by a small number of people.

Early majority accounts for 34% of the buying population. By this stage in the life-cycle of a product, it would have been tried and tested and shown to be of value, popular and in demand; consequently there will be an increased number of people buying and supplying.

Late majority. 34%. At this stage the product has hit critical mass, shown it's worth and become extremely popular and for some products considered essential. There will be many many more suppliers in the marketplace, many of whom have created similar and branded products. At this point the products become a commodity and competitive pricing becomes significant driving prices down and down, because the only way to stay profitable is to cut expenses or cut corners.

Laggards the remaining 16%, who always behind the times. These consumers buy the bargains prices are incredibly low because, the product is outdated, suppliers are shifting old stock, early adopters are selling their stock because they've moved on to the next bright shiny new innovation.

Can you see how this can be applied to the availability and pricing structure of many of the treatments that we offer for example, composite's, whitening and implants?

 

 

Who do you want to be treating?

Do you want a patient base of innovators who are small in number, willing to pay high prices for new and cutting-edge treatments?

Would you prefer to be treating the early adopters, who again are relatively or group of people willing to pay high prices for new and innovative treatment that is not available in many locations?

Do you want the early majority to be the bulk of your patient base? A larger group of people following the trend new and modern dentistry that has been tried and tested and shown to be reliable and although must be paid for the price is not premium.

Or are you aiming at the late majority and working in a commodity environment, competing on price using cutthroat marketing?

Or is your style of dentistry picking up the laggards, providing out of date treatments at bargain prices?

 

Once you know who your target audience is, you can just your marketing, the environment of your practice, the team and your prices to be attractive to those people you want to attract.

 

Tips to help you stay on the left-hand side of the curve

ü  always add value

ü  become the embodiment quality

ü  never discount

ü  sell the benefits and the outcomes

ü  focus on problem-solving

ü  Maximise your uniqueness

 Ways to stay right hand side of the curve

·        discount prices

·        offer financial incentives

·        become the embodiment of a bargain

 

If you have realised that you have slipped into commodity dentistry and you would prefer to be offering quality dentistry, call me on (07989) 757884 or e-mail Jane@ IODB.co.uk

the Institute of dental business - making good practices great