1.31.14 Issue #621 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

Dentistry Less Than the Price of a Chocolate
By Sally McKenzie, CEO

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Valentine’s Day is just around the corner. This day of hearts, flowers, and of course, chocolate makes it a good time of year for chocolatiers. Perhaps you’re considering something special for that certain someone in your life. If you really want to make an impression, a box of eight Delafee chocolates might be the perfect gift. They will only set you back about $350, and each is carefully wrapped in edible gold. Or maybe a weekend getaway to New York is in order. There you can visit the restaurant Serendipity 3 and splurge on the The Frrrozen Haute Chocolate ice cream sundae. What’s so special about it? The price. At $25,000 it is the most expensive dessert in the world.

Or perhaps a box of Connecticut-based Knipschildt chocolates is the perfect choice. According to his website, Chocolatier Fritz Knipschildt “makes no compromises; he applies the highest standards of excellence to each and every step of the chocolate confection process.” There you can get a La Madeline au Truffe for a mere $250 – a bargain, indeed.

Hundreds of dollars for a chocolate, thousands for a bowl of ice cream. It’s safe to say that those dealing in these specialty confections don’t think twice about their price tags. Although most dentists I know also subscribe to the highest standards of excellence in each and every step of the process of dentistry, these doctors aren’t offering a few moments of indulgence. No, they are providing a lifetime of care and concern for their patients. The irony - many, many of them suffer immeasurably whenever they must stand toe-to-toe with a $4 fee increase.

They fret, they worry, they hem, and they haw. How will the patients react? Will they balk? Will they leave and never come back? Will they rant on Facebook or Tweet disparaging comments?

Where you set your fees is a personal decision, yes, but your BUSINESS depends on it. Whether you increase your fees, lower them, or keep them firmly planted where they are, there are some key points you want to consider to ensure that you are making a carefully reasoned decision.

#1 - Keep Up with the Joneses
Many doctors will arbitrarily establish their fees without ever checking out what Dr. Jones, Dr. Smith, or any of their dental neighbors are charging. Study dental fees in your area and find out where yours stand in comparison. Information on dental fees is available online and through your local dental society. Income and demographic information, which can be extremely helpful in establishing fees, is available through the local chamber of commerce as well as through private companies. In addition, a variety of surveys and reports regarding the costs associated with running a dental practice are available through the American Dental Association.

#2 - Consider the Message Your Fees Send
If yours are the lowest in the area, you may be setting yourself up to be a magnet for price shoppers. Similarly, if your fees are the highest, consider if your services are on par with rates charged. Perhaps you do, indeed, offer a patient experience and a level of dental care and expertise that warrants the higher rate. Or perhaps you prefer to work with a smaller patient base. That is fine, but you still need some understanding of how your fees compare to the competition. 

#3 Make Logic (Not Fear) Your Guide
The recession certainly took its toll, and many doctors put off increasing fees for a very long time. Others have no established system for doing so. Some have trapped themselves in a financial quagmire, charging only in the 50th to 60th percentile for their areas. Undercharging patients by as little as 7% or 8% each year translates into thousands of dollars lost to the practice. Undercharging by 40-50% translates into a serious financial pounding.

The dentist down the street may be charging in the 90th percentile and may be thriving, but many doctors convince themselves that they simply couldn’t charge that because patients will leave or the doctor feels guilty for increasing fees. Or the doctor doesn’t believe that his/her level of care is really worth that price. Certainly, if you’re charging in the 60th percentile today, you don’t want to jump to the 90th percentile next week, but you do need to develop a plan to gradually increase fees over time.

To speak with someone about receiving a complimentary Fee Analysis for your practice, call 877-777-6151 and mention this article.

Next week, 10 steps to a solid fee schedule.

For more information on this topic, visit my blog: The Lighter Side

Interested in speaking to me about your practice concerns? Email sallymck@mckenziemgmt.com
Interested in having McKenzie Management Seminars speak to your dental society or study club? Click here.
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