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
·
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
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