Are You Giving Away Your Profit?

This has been a hot topic since time immemorial.  While fee guides exist, there is often pressure to discount based on other low-ballers in the neighborhood and also pressure from the patients themselves.

Dartboard approach to fee setting

While provincial fee guides may not be perfect, they are far better than using a dartboard to determine fees and/or discounts.  Provincial fee guides are based on economic studies done by outside accounting firms who consider cost of materials, time involved and responsibility of the denturist.  These factors are then used to determine what the appropriate fees should be for dentures in your province.  Once the study is completed, most associations increase the prices according to cost of living index.

In other words, the fees are not completely arbitrary.  They are fair prices for value for the services provided.  This approach is used for all the healthcare professions.

So stick to the fee guide or you are automatically giving a discount.

Confidence and competence

Discounts arise when the practitioner is not totally confident in his work.  The practices charging top fees are often led by a confident and technically competent individual.  So if you are not the best that you can be, then take some continuing education courses to improve your skills and confidence. We have run into denturists unable to make a fully equilibrated denture.  They either never learned how or have forgotten what they learned years ago.

The first thing is to become confident and competent.

Quality care = quality fees

You are probably providing good quality care and service and using materials appropriate for the quality of denture that the patient is purchasing.  If this is not true, then this is the first area that needs to be improved.

While there are some patients who want the cheapest, they are typically also the most difficult to please.  You want to attract patients who want the best and are willing to pay for it.  Some of the most productive offices have discounters next door working their fingers to the bone making dentures for peanuts, while our clients are producing a top-of-the-line product and charging fair fees, thus reaping the true rewards of being a good denturist — pride in work well done and appropriate remuneration.

Undercutting yourself

Often, denturists offer discounts without even being asked and then fail to tell the patient that they are giving a discount.  This eliminates any possible public relations value as the patient doesn’t even know that they are getting a discount and creates an impression that your practice is cheap or the cheapest in town.  Neither of these images are what you want.

Create a discount-free practice

The following is an outline of what needs to be done to eliminate or significantly reduce discounts in your practice.

  1. Eliminate all references to discounts in office policy, patient handouts, advertising, signs, etc.
  2. Clearly state that you follow the fee guide issued by your association.  This includes conversations with patients as well as any written material.
  3. Never offer a discount.  The most common is a discount for seniors, the bulk of the wealth in Canada resides in the hands of seniors, so this offers a discount to those who need it least.  This is not to say that you shouldn’t do some charity work for those who truly cannot afford it.  Charity work can be done, but be sure that the candidate really does qualify and keep the amount of charity work within reason as you need to earn a living too.
  4. When asked for a discount, tell the patient that you only use the highest quality materials and that you do not use any shortcuts in making dentures.  Politely ask the patient if they want you to reduce the quality of material or if they want you to use shortcuts.  Explain the fee for a high quality denture.
  5. Should the patient persist, it’s best to tell them that they may have to seek out someone else.  Don’t be afraid to turn a patient away, especially if they want a discount or want it done their way.  These are usually early signs of problems to come.
  6. Often, the problem patients are the same ones who want a discount (and usually a significant one).  And guess what?  They refer more patients to you who are the same as they are!  This is not a healthy way to build a practice.
    Train your staff to be able to deal with patients concerning this matter.  Answer any questions from your staff that they run into and then role-play them through handling the various situations.  Do this until they are completely at ease.  The role-playing will most likely need to be done more than once.
  7. When transitioning away from discounts, existing patients of the practice will often remember that they got a discount the last time they were in for service.   Let them know that in order to keep your fees reasonable despite rising costs of quality materials, you have had to eliminate discounts.  Tell them that you are sure that they want the best and that you are doing everything possible to provide it to them.In some instances, you may wish to continue the discount policy with a FEW long-term patients who are very good.  This should only be a few and you should let them know that this is a very special arrangement for them.  Make sure that they know that this will not be offered to anyone that they refer although you will definitely provide their friends with the best possible care and service.  You can also obligate them to send in some of their friends by saying that since you are continuing to offer them the special discount, you would really appreciate it if they send some of their friends to you.

The choice is yours

You can make a good living by doing everything right or you can subsist and spend your life in your lab making lower end dentures for discounted prices.  Don’t make your financial life harder by giving away your profit.
Creative Commons Attribution: Permission is granted to repost this article in its entirety with credit to The Art Of Management Inc. and a clickable link back to this page.

Photo credit: almagami, Thinkstock.com

 

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