Competitive pressures are evolving. To keep up and remain successful, it’s time to reassess the balance between marketing and value in your practice.
By Roger P. Levin, DDS
There are many articles, including mine, that focus on how to properly market an orthodontic practice. At the same time, there are many articles, including mine, that focus on building value in an orthodontic practice. Each article rightly makes the point that if you have excellent marketing then you will have enough patients, or if you have excellent value then you will have enough patients. What these articles don’t discuss is that there is a relationship between marketing and value and how increases in new orthodontic delivery models can affect the balance of the ratio. This concept will be critically important to understand in order to maintain a phenomenally successful practice and be relevant in the future of orthodontics.
Practices that have traditionally had excellent marketing have had a steady stream of referrals and excellent production, profit, and income. If these practices have comprehensive, documented systems in place that allow for the achievement of the annual production goal, then the entire value chain of the practice is working. In other words, marketing drives referrals and excellent systems drive value.
The marketing-to-value ratio has been very stable until recent years. In the last few years, we have seen the rise of new competition in orthodontics, new treatment options with a growing shift toward aligners, new service models (ie, orthodontic treatment in a DSO with 900+ offices), and direct-to-consumer offerings. Although some of these new delivery models are recent, there’s every reason to believe they will continue to expand and create competitive pressure on the marketing-to-value ratio for orthodontic practices.
Here is a main point: if you had the marketing-to-value ratio at the right balance in the past, your practice was most likely remarkably successful. The ratio is now changing, but if you were able to maintain the right marketing-to-value ratio, your practice will continue to be highly successful. The key is to address this ratio before you need to.
How is the marketing-to-value ratio changing
For many years, orthodontic practices provided most of the orthodontics in the United States. Practices could charge fees based on “what the market would bear” and did so very successfully. Today, there is competitive pressure around fees that is just beginning. The DSO referenced above with 900 offices nationwide has an orthodontic care fee of $1,999. To put this in perspective, many years ago outlet malls were typically nothing more than secondhand or damaged goods being sold at a lower price just to get rid of that merchandise. Today’s outlet malls carry goods that are manufactured specifically for them which are of lesser quality; however, they are quality enough that they have helped the outlet business become significant in the retail world.
Could orthodontics experience the same thing? Could other service models and delivery models become the equivalent of the outlet malls that gradually become more recognized at a much lower fee? The answer is that there will be a shift in this direction, but there is still good news. As that shift takes place, it becomes critical to keep the right balance of the marketing-to-value ratio so that your practice is operating in a way that will allow it to be very successful.
So, what is the balance? Here are three major points to consider.
Referral marketing relevance. The most important factor in referral marketing is relevance. There are practices that have outstanding referral marketing programs that excite and stimulate children in the practice and lead to more children from the community wanting to come to that practice. By doing this correctly, you can build a brand that is either “the preferred practice” or one of “the preferred practices.” Unfortunately, some practices think that simply having been established in the community for a long time and having had that brand is all that it will take.
However, in a fast-paced and changing world the practice leader might not maintain that brand unless the marketing stays highly relevant. This is why companies like Coca-Cola and McDonald’s far outpace any other company in their field by spending millions of dollars each year on marketing. But they also constantly change their marketing to be relevant. Orthodontic practices must continually understand what patients and parents care about, know how to best reach them, and create effective messaging.
Continually building value. Many orthodontists feel that the value they provide is in clinical care. Certainly, if cases aren’t turning out well, that will hurt the reputation of a practice. I have had orthodontists tell me about their amazing clinical results and that they don’t understand why they don’t have more patients. This is the classic question of really understanding what the patient or parent is buying. True, they are buying a beautiful smile, but they cannot see that beautiful smile until you’re done.
Patients and parents select an orthodontic practice based on several different criteria with an assumption that they will receive a quality result. In the future, we are going to see an increasing number of parents and patients who simply assume any orthodontist can provide quality orthodontics. This will put more weight on other factors such as convenience, time of treatment, interval of treatment, and cost. Furthermore, cost will be especially important in a challenging economy. Think of all the people you know who now hunt for gas stations that have lower prices per gallon who didn’t even consider this before. Value goes to the heart of quality, fee, and customer service which includes convenience, intervals, length of appointment, and other associated factors.
The marketing-to-value ratio. Don’t assume that simply having more value means that your marketing will be fine, and you will have the right number of new patients. The marketing must be relevant, and the value must be evident and ever-growing as people expect more if they are going to choose your orthodontic practice. You must also keep in mind that you shouldn’t be fooled by the year 2021 when so many practices had an excellent year because Americans had more available funds to spend that weren’t going to travel, leisure, restaurants, and luxury goods. Marketing relevance must be balanced against perception of value by patients and the community. To keep marketing relevant, you must understand what resonates with people. A “quality only” message may be relevant, but not fully relevant. More convenience, longer intervals, a positive environment, upbeat staff, and great phone etiquette are all factors that can be part of the marketing message.
Creating a 5-star customer service environment with energy and positive attitudes, which is not as easy as you might think, is the other part of the ratio. Practices must also deliver the value message properly and change the message as needed. Everyone who touches a patient, including the front desk staff, the treatment coordinator, and the doctor, are part of the marketing-to-value ratio. And that ratio is changing.
The field of orthodontics, like any business today, is changing. New delivery models, treatment options, technology and staff skills are all part of this progression that will create more competitive pressure in orthodontics. The key to success will be for practices to understand the marketing-to-value ratio so that they will continue to attract an excellent stream of referrals and new patients. If you continue to modify the marketing-to-value ratio in the right direction where marketing is relevant and value is consistently growing, there is no doubt you will be as successful as you want to be.
Roger P. Levin, DDS, is the CEO and founder of Levin Group, a leading practice management consulting firm that has worked with over 30,000 practices to increase production. A recognized expert on orthodontic practice management and marketing, he has written 67 books and over 4,000 articles and regularly presents seminars in the U.S. and around the world. To contact Levin or to join the 40,000 dental professionals who receive his Practice Production Tip of the Day, visit levingroup.com or email [email protected].