According to the Levin Group Data Center, 75% of dental practices have declined in production in the last 4 years. This is due to a series of changes I refer to as The Permanent Game Changers, which are reshaping the dental profession, including the following:
- Fewer new patients entering dental practices
- Lower case acceptance
- Reduced insurance reimbursements.
To compete in this new environment, dental practices today can no longer operate without using proven business models. Practices that are doing well today—and there are many—employ real-world business methodologies to increase production.
CREATING A PERMANENT SUCCESS MODEL IN A DENTAL PRACTICE
Practices cannot simply wait for the dental economy to improve. That is a losing prospect. Instead, practices must be proactive. The following action steps will enable virtually any office to increase production and profit:
Have 98% of All Patients Scheduled Within 90 days
Unfortunately, most practices are well below this number. Bear in mind that every off-cycle, overdue, or inactive patient contributes to production loss. To make matters worse, other dental needs and elective procedures cannot be identified if the patient is not on the schedule.
To get 98% of all patients scheduled within 90 days, practices must implement an innovative technique we refer to as one-day rules. A one-day rule, in this case, simply states that any patient who is overdue for an appointment by one day will immediately receive a call. The call should always be directly to a patient’s cell phone (data shows that up to 25% of Americans do not regularly check their home voicemail). By placing a well-scripted call to patients who are overdue for an appointment, even by one day, they are encouraged to schedule their next appointment. If patients are reached and scheduled, the target has been achieved. However, if patients merely receive a voicemail message, it is very unlikely the target will be reached. In order to ensure success, the next step is the 9-week follow-up process, which guarantees that patients experience excellent customer service at the practice, and, as a result, they schedule the next appointment.
This program has been extremely successful for nearly all practices that have implemented it and quickly results in greater patient retention and higher practice production.
Having 98% of patients scheduled at all times is vital to practices in the new economy. The reason? There are often not enough new patients coming into practices. If the number of new patients has either plateaued or declined, and the level of case acceptance is not sufficient to increase production 8% to 18% each year, every new and recurring patient matters more than ever.
Make Patient Retention the Practice’s Highest Priority
Dental practices cannot afford to lose patients as they may have been able to in the past. While some patients will invariably be lost to the practice due to reasons beyond the practice’s control (relocation, death, etc), the vast majority of patients become inactive simply because the practice did not try hard enough to retain them. In the recent recession, many patients stopped coming to dental practices on a regular basis because they were nervous about their expenditures. Since patients with dental insurance still have to reach in their pocket and produce a copayment, it has become increasingly common for them to put their hygiene or other dental services on hold.
In most practices, when a patient has not been in the office for 18 months, he or she is deemed inactive. An inactive patient does not count as part of the practice any longer—not even in an evaluation conducted in preparation for a practice sale. Too often, many practices allow patients to simply slip away without ever implementing a strong outreach program to bring them back.
As I often point out in my educational seminars, the best way to get patients back into the practice is with some type of incentive such as a free exam or even a free hygiene visit. At first, many dentists react negatively to this concept because it means giving away a service. The real question is, What will this action do for production and profit by the end of the year? To get an answer, evaluate the benefit of bringing 40 or 50 patients back to the practice who are currently inactive, and determine what effect it will have on production and profit by year-end. Whenever Levin Group consultants have worked with clients to achieve this objective, production and profit have increased by year-end. I would encourage dentists to be less concerned with the free incentive and focus more on what it will do for overall annual practice performance.
Set a Target of Having 80% of New Patients Refer Family or Friends Each Year
To achieve this objective, patient satisfaction must be extremely high. Simply being nice to new patients will not be enough. An entire new patient experience needs to be put in place. Start by rescripting the entire first new patient phone call. Practices use the vast majority of these calls to simply gather basic information, such as the patient’s name and phone number. As a result, these calls do nothing to build value for the practice in the caller’s mind. The scripting should focus very heavily on accomplishing 3 major objectives: (1) convey a strong sense of value for the practice, (2) create confidence that they’ve called the right office, and (3) begin to establish trust.
Care and attention given during the initial call is the first step in building the confidence of patients and convincing them that you will provide superior customer service and care for them. Remember the old adage—you never get a second chance to make a first impression.
The goal of the new patient phone call and the new patient experience in general is to create a comfortable, welcoming environment that inspires new patients to refer family and friends.
However, almost no amount of customer service alone can ensure reaching this goal.
After extensive testing, the Levin Group found that referrals from new patients could often be achieved by offering a no-cost first exam. To build value for what you are offering, these patients should be presented with certificates that display the true dollar value of their free visit. At that point, ask for a referral. To ensure success, a value-based script should be used to further motivate them to refer others.
Implement Internal Marketing
Practices that already have an adequate patient base can have dramatic effects on increasing referrals by implementing a strong internal marketing program. The target would be to have 40% to 60% of patients refer at least one other patient each year. If this is accomplished, the practice will certainly increase production and profit based on the enrollment of new patients. Keep in mind that average production per new patient should be approximately 3 times higher than average production per current patient.
The quantity of strategies plays an important role in internal marketing. One or 2 key internal marketing strategies are not effective enough to achieve the target of having 40% to 60% of patients refer at least one new patient each year. However, by implementing approximately 15 ongoing strategies within the practice to stimulate referrals, internal marketing works nearly every time. If the practice does not have enough strategies to reach patients more frequently, critical mass cannot be achieved. The result? A referral target that will not be reached.
Case Presentation Needs to Be Viewed From an Entirely New Perspective
The term “case presentation” refers to sales. Practices need to become knowledgeable about how sales in real-world businesses work. For example, pharmaceutical sales representatives undergo months of sales training. Similarly, dentists need to be totally immersed in sales instruction if they are going to make patients understand why they should be interested in recommended treatments, especially elective procedures and larger cases.
Dentists should understand what it takes to motivate patients to accept treatment. In professional sales, creating customer motivation is an intense process that relies on many factors. It is not as simple as laying out one or 2 options and letting patients decide. It encompasses everything from understanding patients, developing a relationship and having the right number of consults to following up with patients, presenting convenient financial options, and creating an efficient schedule.
As a direct result of the recession and a slow recovery, dentistry has undergone permanent changes. Practices can no longer wait and hope for the general economy to improve so that everything can go back to the way it used to be. Today, dental practices must act as real-world businesses to increase production and profit. Nearly all dental practices can increase production exponentially if they employ the right business models.
Dr. Levin is a third-generation general dentist and chief executive officer of the Levin Group. Dr. Levin has served on the board of advisors of the University of Pennsylvania School of Dental Medicine, served as adjunct faculty at various dental schools, and is a former chairman of the National Museum of Dentistry. A keynote speaker for major dental conferences, Dr. Levin presents more than 100 seminars per year. He has authored 66 books and more than 3,800 articles. He sits on the editorial boards of 5 prominent dental publications, serves as the practice management editor of Compendium, is the managing editor of Dental Business Review, and is a regular contributor to the Journal of the American Dental Association. Dr. Levin has been interviewed by The Wall Street Journal, The New York Times, and Time magazine. Dr. Levin has been named one of the Leaders in Dental Consulting by Dentistry Today for the past 11 years. He is a recipient of the Ernst & Young Entrepreneur of the Year award. He can be reached via the Web site levingroup.com.
Disclosure: Dr. Levin reports no disclosures.