When discussing dental practice marketing I notice that for dentists focusing on the “insured” middle class–the digging is getting harder.
While the data is sound, this is going to be a bit of a rant…..so get ready….it’s intended as a wake-up call to a few more in the profession who are asleep at the helm unaware of the iceberg ahead that makes the sinking of the Titanic look like like a minor event.
This missive is mostly for the U.S. dentist but it also applies to a fair number of our Western European brethren. If you happen to be in one of those lucky industrialized countries that still has lots of raw materials (Norway, Canada, Australia), things aren’t as dire although of those three, Canada has it’s own real estate bubble currently creating a false sense of prosperity in their middle class.
One reason I subscribe to multiple sources for economic data is to see what the sunny optimists and the dour pessimists are saying about demographic data, wage trends, inflation, job growth, pretty much any of the things that predict what’s happening to that good ole’ fashioned concept of a strong middle class. Why? Well that patient used to provide the average Joe dentist with a pretty good standard of living without the doc needing to be very sophisticated at operating a business or doing much besides playing monkey with a hand-piece.
The jury has deliberated from all camps, left and right, and for those still ignoring the data and not making adjustments like your life depended on it, your future is dim. Adjustments mean fixing things like positioning, promotion, measurement and training of your staff, and being systematic about who you are selling to. At the absolute least, improving your sales system is a must at least for qualifying all patients in your practice and the correct dental practice marketing tools are a must.
Here’s the current trends:
*Domestic price increases for anything produced with commodities set to increase. If it’s made of plastic, metal, wood, silicone, oil, or is something edible (everything at the grocery store), a price increase is on the way.
*Chinese manufacturers also experiencing major jumps in raw materials costs—that means all that crap at Wal-mart that improved the buying power and lot of those in the sinking middle class will also be inching up in price. “Everyday low prices + 10-20% soon”
*Global power shift away from rich BUT stagnating industrialized nations (for those who focused only just science back in “college”—that includes the good ole’ U.S. of A.). Shift headed towards faster-growing emerging economies—meaning Billions of people someplace else.
*U.S. household income, depending on whether it’s a liberal guage or conservative guage, has either barely outpaced inflation since 1975 or has returned to where it was in 1975. Not a much different read from either camp. Both admit that gains were a result of women entering the workforce. In in other words, 2 workers were required to eke out a gain or to stay even over the past 35 years—excellent.
*Median income for the macho breadwinner of the house (that used to be the middle class dude) was higher in 1973 than in 2009.
*The credit boom has come and gone, the house atm has been repo’d, and the bump in standard of living this boom brought is D.O.A.
*Better economic footing requires steady high-wage/high-value job creation and rising wages that outpace inflation BECAUSE of the value of what’s being produced. Yeah, we got the iPhone, but outside of a few other limited heavy equipment niches and war goodies—the rest of the world isn’t interested in our products.
*Intellectual property and mental know how is the key to high wages if you aren’t making physical things others want. Test scores show that our kids are dumber than dirt, but hey, they got real good at hand-eye coordination from mastering the latest version of “Call of Duty.” That should come in very handy for jiggling the change cup in synchronicity with the latest hip-hop or Gaga tune.
*No party, Dem, Rep, or Tea (Like the Brits, a little milk with tea is delicious) has any inclination of how the job conundrum can be fixed as the underlying machine that used to create high value jobs from 1945-75 is all rusted out. In the meantime, we argue over how much of an increase to spend on new swords and losing battles in dusty lands versus innovative plowshares or other more practical items. To say the least, all the arguing, is almost as entertaining as observing tourists get sun burns here on the Beach.
*Globalization of labor is greatly expanding the rest of the world’s middle class— at least someone is be moving up the food chain to be able to afford their dentist.
Combine all of the above and anyone who is outside of that minority of the population who currently can create significant value via their job faces a downward spiral.
What are you doing to boost your value, your spouse’s our your kid’s because, like it or not, outside of the truly rich at the top, this is a equal opportunity issue that’s set to bite all those not paying attention on their keister.
The majority who are NOT at the top or who, because of their value creation are on the rising tide, are the very patients most dentists are pursuing. There the ones with a rapidly shrinking change purse.
This is not simply a weathering of a temporary storm that will go away in the near future.
The solutions include any and all combinations of the following:
*Dental Practice Marketing to the affluent.
*Cut debt service (Personal and business) so you have more breathing room to adapt and this emptying out of the middle class doesn’t take your practice down with it.
*Shift more of your practice to services discounted with payment in cash. Learn about the power of appropriate discounting.
*Get ready to barter. Chickens for implants. (okay this one is more tongue in cheek).
*Cut overhead/get help on how to do it.
*Create a discounted practice within a full fee practice built on the back of cheap labor (associates). Hey if it works in India…….
*Dental Practice Marketing directed specifically to those with severe dental problems. BECAUSE: 10% of those with such problems will buy and buy service with very high margins. This means adapting your marketing for those specific problems and attaching a sales system to the marketing.
Better get with it or……well…you get the point….
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