“I don’t need to look at my demographics. I already know my area pretty well.”
If only it were true!
People are a moving target. The patient base upon which all practices draw, changes far faster than most dentists assume. Many professionals with whom we work find that their new patient count is dropping with no explanation. Their tried and true marketing program doesn’t deliver any more. The basic assumptions of patient behavior seem to have shifted. Why?
“Demographics” is a dynamic science. In short, because people are changing the way they live and where they live and HOW they live. If one does not take a serious peek outside the operatory to see what forces are affecting their local practices, they may wind up with a nasty surprise.
So what do dentists need to keep track of from time-to-time in their communities? There are three facts about EVERY practice area we believe need to be watched:
Let’s look at each separately:
Most dentists have some vague notion of how many households there are within one mile of their practice. What they often ignore is the ratio of renters-to-owners, apartments-to-single family homes, and the cost of housing. When we see the percentage (and number) of renters increasing relative to the number of owners, there is often a dual change in the credit worthiness of the population (decrease) with an increase in the population. This usually goes along with a drop in the median age of the community. The cost of housing is a significant factor as it will likely effect the demographic character of a patient base more than anything, including the Employment/Economy of a practice area at least in the short term.
If the Dow Jones has a bad day, it will mean nothing to your practice area. If a company that employs 20% of your patients is threatening to close or move, it should get your attention. Nevertheless, we see remarkably few dentists know what the major employers in their area are doing. If an employer that has 2% of the available workers in a five mile area closes, every dental practice in that five miles will be affected, if only indirectly. To put it another way, a community with 25,000 workers would lose only 500 workers (2%). But we know that those 500 workers have a DIRECT impact upon 5,000 businesses and an indirect impact upon another 7,500 or more. While a dentist may have no patients who have lost their jobs, a mere 2% loss of jobs can greatly affect the practice. Where communities are dependent upon a single segment of the economy (agriculture, energy, manufacturing), a down-turn or an up-tick will directly affect the practice.
If demographics are what people ARE (gender, age, income, education, etc.), psychographics are what people DO. Their values and consuming habits will change based upon many real and imagined factors. As an example, if a once vibrant community has little new growth and local residents remain in their current dwellings, the median age of the population will grow older. Where once an orthodontic practice was greatly in demand, it may soon have a hard time filling chairs. The size of the population and the local economy may be stable but the lifestyles of the patient base has shifted.
Of all the most ignored changes, Psychographics may be the most dangerous if not monitored every five years or so.
If you are interested in a Community Overview Report that will help explain what your practice area is like NOW and what it is becoming IN THE FUTURE, go here. Community Overview Report
Forward this article to a friend.