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As a dentist, it makes sense to take a serious look at the return on investment (ROI) of becoming (and practising as) a dentist.
Among your colleagues, reasons for becoming a dentist vary enormously including:
- getting the necessary marks to get into the course and feeling you shouldn’t ‘waste’ them
- having a family history of dentistry and loving the science / technology, or
- just wanting to help others.
Whatever your reason for getting into dentistry, you should get a return. Let’s face it, it’s not like there weren’t some sacrifices along the way – at school, at uni, and in setting up your practice.
Before looking at how to market your practice for higher profits, let’s have a look at the fundamental mechanics of turnover and profitability (marketing feeds directly into both).
Boosting your turnover
If your goal is to boost your profits (and let’s face it, why wouldn’t it be), part of the process must involve boosting turnover.
Yes, you could just cut your costs (more on that below), but typically, practices have significant levels of fixed costs. These costs keep coming in whether you’re serving a handful of clients a day or you’re bursting at the seams.
So, to boost turnover, there are, in fact, really only three ways to do so:
- boost the number of clients
- increase the frequency of visits, and
- raise the spend per visit.
Curiously, if you can do all three, you actually get a compounding effect too. i.e. A 10% growth in each of the above categories, generates a total 33% return (not 30%).
Trimming your costs
Of course, boosting turnover alone is just part of the bargain. Apart from that, the other factors to translate increased turnover into higher profits are:
- improving efficiency internally, and
- lowering costs
Master these steps and increased profit will follow you like a lost dog. Ah, but only if it were that simple.
Unleashing your marketing
Now that we’ve covered the fundamentals, it’s time to unleash your marketing. Most dentists I speak to are usually focused on external marketing: “Angus, can you place a few ads here and there and get new clients to start calling”.
Such external marketing can be quite effective at boosting client numbers but most external marketing won’t change the frequency of visits. Similarly, the spend per visit is not affected by most external marketing, unless you specifically target more expensive procedures like implants or orthodontics.
The marketing that fewer clients enquire about is internal marketing and yet it has a key role in achieving many of the factors above.
Effective internal marketing can help your clients visit more frequently, raise the spend per visit, and in doing so, increase efficiency and lower costs.
In reality, a combination of internal and external marketing working together generates the best results.
Summary
At a macro level, there are only a handful of elements that will drive higher profits at your practice. A combination of external and internal marketing is an important part of the process.
Next time, we dig deeper on the specific marketing tactics you can use to boost profitability.
In Case You Missed It
Part 1 of our Profitable Practice Partners Series: The new reality - Dentistry is a business
Angus Pryor is a Practice Growth Marketing Specialist, international speaker and best-selling author.
Check out his Amazon Number One Bestseller book “The Dental Practice Profit System – 5 Steps To More Patients And Higher Profits”. Click HERE to grab your copy NOW.
