By Roger P. Levin, DDS
There is no question that the current economy is putting the squeeze on many dental practices. While most dentists aren’t in danger of going bankrupt, there is heightened anxiety throughout the industry as doctors grapple with flat or falling production and rising costs. You, too, are probably feeling the effects of the economic downturn, as dental practices look for ways to cut costs.
You can still be very successful in today’s economy, but you have to be willing to do things differently.
Dentists in a down economy
During tough economic times, a familiar pattern occurs in general dental practices. As production drops, profits drop even faster. Even a slight drop in income sets off alarm bells in the minds of many dentists. To stave off a practice decline, dentists will:
- Extract more single teeth rather than refer patients to oral surgeons.
- Perform more root canals and make fewer referrals to endodontists.
- Refer less periodontal treatment
- Cut overhead
This last point has a direct impact on your livelihood. General dentists tighten their belts, and they may not necessarily do this in a logical manner. They may procrastinate by stalling on purchases or putting purchases on hold indefinitely. They may buy smaller quantities of supplies, even if this means ordering much more frequently.
These types of behaviors can be very frustrating for a sales rep. If several of your normal accounts cut back, your income will be affected. The real question is what can you do to protect yourself if this happens?
Action steps in a down economy
¤ Offer your customers the best possible deals. Many sales representatives have some latitude in extending discounts and specials since their companies offer incentives to keep business strong. While many sales representatives characterize dentists as frugal, the fact is they behave like most small business owners in order to keep an eye on their expenditures – even more so when the economy is slow. You have a real opportunity to shine if you can procure the right deals for your customers. These dentists will appreciate you now as well as when the economy gets better.
¤ Find ways to combine purchases. It may not make sense for dentists to buy a one-year supply of something now even if it’s a special deal. See if you can offer dentists a combination package that will help them keep their overhead under control. Explain how the combination package reduces costs in the short-term while keeping their practices well stocked over time. This way you can ensure that they will continue to purchase from you on a regular basis.
¤ Look for new opportunities. If certain practices were struggling, would they be better off with a less expensive product, assuming one is available? Or is there another way for them to continue with the current product in some less expensive form?
Will your practices view you as an asset or a liability? Now is the time to take care of your customers by offering them different options and opportunities. Look for ways you can help your customers save money. The sales representative who figures this out will sell more overall. Even if you are selling a little less to each of your customers now, the beauty is that as the economy improves you will retain these customers and your sales will multiply exponentially.
Roger P. Levin, DDS, is founder and CEO of Levin Group, a leading dental management consulting firm that is dedicated to improving the lives of dentists through a diverse portfolio of lifetime services and solutions. Since the company’s inception in 1985, Dr. Levin has worked to bring the business world to dentistry. Levin Group may be reached at (888) 973-0000, or at www.levingroup.com.