Hugh F. Doherty DDS, CFP

Most practices are totally unaware of the consequences of lowering your fees in this desperate economy. Some dentists are literally killing themselves to compete on price when it's really not necessary or the wise thing to do.

A headline in the New York Times read "High End Retailers Saks Fifth Avenue Report Strong Profits, but Walmart Still Struggles". If you are currently interested about why and how to keep your own profit margins intact. read below about how Saks Fifth Avenue and Wal-Mart handled structuring prices on their goods.

Saks Fifth Avenue said it was selling items like fine jewelry, fragrances and men's accessories fast and furiously, reporting a "historically high gross margin rate performance." Meanwhile Walmart referred to lowering their price strategy as necessary because of customers living paycheck to paycheck and having to "hold down" prices to get customers to spend. If Walmart, who actually gave a low price guarantee, is struggling to sustain their business isn't that a clue to stop striving for and competing on lower prices? They even introduced a special " Price Guarantee" which said that if the price went down at any time after consumers bought merchandise during the holiday season, a refund would be given for the difference (via a gift card).

Together with your team discuss your fees. If your practice is not the absolute lowest, then the best you can say is you are the second or third or fourth lowest price. Having the almost lowest fees gives you absolutely no competitive or marketing advantage. Lowering your fees is a totally unsustainable advantage. Only indigent people have their choices controlled by price. Walmart's strategy won't work for most businesses, nor should you want it to work.

Here are 6 of The Best Reasons To Not Lower Your Fees:

1. You will be able to afford to create and deliver much better experiences and care for your patients.
2. You can hire additional team members, rather than suffer the consequences of being under staffed.
3. You can afford to pay better wages and incentives to attract better personnel instead of paying below-par wages, forcing employment of mediocre or less-motivated and unskilled people from whom you can demand little.
4. You can make your patients environment and customer service more enjoyable which is similar to a Saks Fifth Avenue experience with personal assistance and personal attention versus a crowded, impersonal Walmart experience.
5. You can improve your after sales service. You can do much, much more to "WOW" your patients before, during and after the "sale," and still produce a proper Net Profit.
6. An even better reason to not reduce your fees: You will be able to afford and spend more on marketing, to get potential new patients attention than anyone else competing with you.  

I'm going to say that again because this is an incredible source of power. Never cease your "Marketing, Marketing , Marketing" efforts ever. Why?

You can beat the competition because you can afford to spend more to get your potential new patients attention than your lower-fee competitors can or will spend. Unfortunately most dentists don't understand how powerful this is so they try to spend as little as possible on marketing to get patients. What you really want to do is to spend as much time as possible, with your TEAM, when it comes to strategies to acquiring new patients. You also want to put yourself in the position of being able to afford the necessary technology ( digital x-rays, cameras etc.) to better serve and care for your patient. If you take care of your bottom line, then and only then you will be able to implement the above suggested strategies to overcome your competition. Also you will be able to place yourself in a powerful and enviable position above your competition in the market place.

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Lois Banta

2) Hire and train for positive attitude and acquire great teams with a dedication towards customer service and effective communication.

3) Hold a "morning huddle" every day to check in on the pulse of the practice and address day to day concerns before they become major issues.

4) Strategize each week by holding team meetings. Set a theme for each week of:

• Cross training
• Analyzing monthly numbers
• Continuing Education
• Role play - practice communication for patient questions.

5) Choreograph schedule for optimal productivity.  

6) Get the money off the books and into the bank quickly.

7) Utilize excellent customer service...patient's impression of you begins on the phone.

8) Sharpen your clinical and practice management skills often by attending and participating in select continuing education.

9) Inspect what you expect.

10) Have more professional fun and find your "internal giggle".

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