Hidden Dental Practice Marketing Expenses
You are paying for marketing
like it or not
In a recent conversation with a dentist, I asked, “How much do you spend on dental practice marketing each year?” The response was “I don’t’ market or advertise so I have no expense”.
My next question was “How much do you write off each year to the insurance companies?” His response: $85,000.
What this dentist didn’t realize was that an $85K write-off to the insurance company WAS A STEALTH Dental Practice Marketing EXPENSE. In other words, he paid the insurers that amount to participate in their plans and have them send patients his way.
What he was also missing was that in addition to the write-off; his fees were capped for insurance patients meaning he was losing even more than just the write-off. He was subsidizing the insurers to compete against himself by offering lower fees to THEIR clients.
All-in-all, this dentist is paying more than $100,000 annually to get a steady stream of low-profit cases into his office reducing his work to a commodity.
Worst of all, there’s no real equity in the practice since the patients belong to the insurance company and not to him.
Often, dentists in the same situation compound their errors by:
1. Advertising for more insured patients to compete with equally poor practices for the insurance-based business, which they will have to write off. This just adds to their overhead and losses.
2. Taking advanced continuing education courses and learning how to do procedures not covered by the insurance companies. They think that by somehow having additional clinical expertise they will earn more. This is flawed thinking! Despite advanced training, they will continue to get the same insurance patients as before with “payment denied” stamped on all of their requests for advanced procedures.
3. Expanding capacity to cover low fees and big write-offs. Remember the old saw “He loses two dollars on each pair of pants he sews but makes it back on the volume?” Larger volume means more management expenses. The more the dentist expands into the low-profit arena, the more he loses. Unless this dentist wants to grow large enough, pay the upfront costs of developing strong management systems and sign retail leases to compete for volume with the chain operations, he’s a dead duck.
I often speak with dentists who have waited too long; have exhausted their financial reserves and no longer have any real choice except to close shop and get a job. If you are in the same position as the dentist I was speaking with, you need to act now before it is too late! You have two choices:
1. Act like a businessperson and go for the insurance business in a big way as in #3 above.
2. Move away from insurance-based business while there’s still time and start to build a fee-for-service practice within your own practice right now before it’s too late and you have no choice by using my proven dental practice marketing tools and strategies.
Finally, if you haven’t let too much sand run from the hour-glass with changing your course, you can actually do all of this even with the most baby-step of all baby-steps which is upgrading your abilities in case presentation and persuasion to sell better dentistry to the patients you already have. In fact, that’s the first step many dentists take to create revenue to fund their non-insurance, high profit case dental practice marketing……
Are you ready ? Check out the McAnally Selling System here or find my #1 top selling book on Amazon.