Don't Be Afraid to Raise Your Fees
Patients decide it’s time to find a new dental home for many reasons. It could be because they had a negative experience with one of the practice’s team members, or because the hours the dentist works just aren’t convenient. It’s typically not, however, because the dentist decided to raise fees.
Even so, many dentists are hesitant to make pricing increases. They don’t want to risk losing patients, so they charge the same rates year after year. This might seem like a good way to keep patients happy, but if you don’t ever raise your fees, your practice will actually start to lose money and you won’t be able to invest in the technologies that lead to loyal patients.
Believe it or not, patients actually expect you to raise your fees from time to time. Unless they’re already considering leaving your practice, adjusting your fees $4 or $5 a year isn’t going to compel them to start looking for a new dentist. Raising your prices does, however, allow you to provide them with better care, which of course makes them more likely to stay with your practice and refer you to family and friends.
I know the thought of raising fees can be intimidating, but if you don’t do it, you’ll only damage your practice in the long run. I can help you determine if it’s time to raise your fees, and how much that increase should be. These are the most common signs that it’s time to consider a price bump:
You’re falling short of your financial goals. When you don’t bring enough money in, it impacts your life both professionally and personally. You’re not able to make necessary updates to your office, or live the life you envisioned when you started your career.
If you haven’t already, now is a great time to develop a vision for your practice. Create clear professional and personal goals and really think about how much time you’re willing to work to meet those goals. From there, you can determine how much money you need to bring in each month, which will help dictate your fees.
You honestly can’t remember the last time you raised your fees. This is a sure sign you’re not charging enough, and it’s killing your bottom line.
Let me give you an example. I’ve worked with dentists who were undercharging their patients by about 6%. Most didn’t think this was a big deal – until I told them that seemingly small percentage was translating into thousands of dollars in lost revenue every year. I’ve also worked with dentists undercharging by as much as 50%. That’s right, I said 50%. If your practice falls into that category, you’re really taking a beating financially, and it’s keeping you from meeting your full potential.
OK, now that I’ve convinced you to start raising your fees, you’re probably wondering what is the best way to do it. The key is to make adjustments based on logic, and put together a fee structure that’s fair to both you and your patients.
My suggestion? Establish a solid fee for each service and then make adjustments twice a year. Increase by 2% the first time and then 3% the second time, for a total of 5%. You’ll have a much healthier bottom line, and patients will barely even notice the rise in prices.
You pride yourself on having the lowest fees in your area. Sorry, but that isn’t actually a good thing. Your fees send patients (both current and new) a message about your practice. If your office is the least expensive in the community, patients might think it doesn’t have the most up-to-date technology or the best environment. You also run the risk of attracting price shoppers who have no intention of becoming loyal patients – they’re just looking for a deal.
Not sure where prices fall in your area? Do a little research to find out. You can get this information online or through your local dental society. If you determine your fees are indeed the lowest, consider starting the New Year with new pricing.
Your fees are all over the place. I know dentists who purposely set their fees too low for certain services and too high for others. They might discount their hygiene fees, but charge more for crowns, for example. Unfortunately, this structure only annoys and confuses patients, which is a good way to lose them. It’s much better to base your fees on your personal and financial goals, as well as data from the community you serve.
Adjusting fees is part of running a business. To be successful, you have to make sure your rates align with the demographics you serve and the quality of care you offer. While undercharging might seem like a good way to attract and keep patients, it will only hurt your practice. Making the necessary fee adjustments will help keep your bottom line robust while also enabling you to offer patients even better care.
Next week: Take these steps to ensure you’re not undercharging patients.
For additional information on this topic and more, visit my blog: The Lighter Side
Interested in speaking to me about your practice concerns? Email firstname.lastname@example.org
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