Step back and analyze consumers and the service industry. Witness Walmart, McDonalds, and Motel 6 flourish as do Neiman Marcus, The French Landry, and Ritz-Carlton. Walk through the cabin of a commercial airliner and observe the economic divisions. Do they compete with each other? They do not.
Understanding the Dental Sales Marketplace
Regarding the private practice niche in the dental industry, the Perfect Storm is playing out. Silver hairs are bolting, staffing is presenting challenges, virus-fearing patients are not returning, Delta Dental is flexing its muscle and small DSOs are acquiring private practices.
These dynamics are resulting in reducing the number of private practices in the marketplace. This is occurring as many new dentists are not interested in taking on risk and management and are choosing to seek employment instead.
Private dental practices that have strong brands in their communities are benefitting from those consumers who seek a new dental practice provider. This may happen if their dentist has not stepped up their game per COVID or when patients are dissatisfied with the service that they have been receiving. Spend time studying consumer habits and what leads them to their purchase decisions. As you understand what motivates the various consumer sectors, then you have the information you need to create that platform that can drive them to the dental practice you wish to operate.
Understand this: the private practice herd is being thinned out. For those who wish to be “best-in-class,” who constantly invest in CE to improve their skills and wish to stand behind a brand that makes them proud, their future could not be better positioned to take advantage of this fast-changing landscape. I vividly recall my first CDA Convention listening as two dentists walked by our booth in 1975. One dentist remarked to his colleague, “can you believe an insurance company wants to tell me what I can charge my patients?” That company was Delta Dental.
Choosing the Best Dental Practice Path and Model
As you consider a private dental practice path, do you pursue an insurance dependent or an out-of-network practice model?
The biggest challenge I see the dental industry facing is staffing, as COVID birthed staff mercenaries. Dental personnel now have bargaining power. They are in high demand, and they no longer need to drive long distances to go to work. Loyalty is not that strong when someone offers a better compensation package.
The way tomorrow’s private dental practice will survive successfully is to create an economic model that attracts the best team members. That will only occur by being in a position to provide a superior compensation package along with operating a practice that is highly regarded in its service area. The best auxiliaries and front desk people in the market also wish to align themselves with the best dental practices in their community.
As such, the best way to handle this challenge is to operate the most sustainable economic model possible, which is the out-of-network practice model.