Posted Apr 28, 2011 in Marketing
BEFORE: It was 1992 and Nelson Rego, CDT, knew he had to make some changes. Sure, the 12-person Downey, California laboratory he co-owned with his brother, Juan, was growing. With an average sales volume of $700,000, 12-year-old Rego Dental Lab was experiencing its largest increase in sales and client base in its history.
But Rego knew that in order to sustain its growth, the laboratory needed to have a more organized sales approach--especially in light of its location in the highly competitive Southern California marketplace. "We had tried marketing--and we came up with some brilliant ideas that weren't so brilliant in the end," says Rego. "In order to continue growing, we knew we needed a strategy."
He approached Bill Neal, CDT, founder and president of Almaden Marketing Group, for help. Neal's first step was to do a complete analysis of the laboratory's operations. "Before focusing on sales and marketing efforts, we needed to turn attention to the internal structure of the laboratory. Marketing won't fix something that's broken. In fact, it makes it worse," says Neal, who, along with Rego, shared details of the "rags-to-riches" makeover at LMT Live! presentations in Chicago and Irvine, California in May 2002.
THE MAKEOVER: Neal's analysis--contained in a 15-page report--assessed five main areas of the laboratory: production, profits, organizational development, personnel and sales and marketing and even itemized the strengths and weaknesses of the cases the laboratory produced. Although he found that the laboratory had a talented management and technical staff that could handle the ramifications of growth, he also noted some problems that plague many dental laboratories: inconsistent work quality, unfulfilled production capacity, lack of defined responsibilities and a manager--Nelson--who was wearing too many hats. Therefore, Neal suggested that the laboratory first concentrate on implementing defined production goals, a quality assurance system, a targeted training program, job descriptions for supervisory personnel and a definitive laboratory manager.
With regard to marketing, Neal recommended that the laboratory do an account analysis to determine which clients were using which services--something he recommends to all laboratories. "Being armed with this information allows you to target promotions to specific clients," he says. "For example, if you find there are a significant number of accounts who just don't prescribe a particular restoration, you can hold a clinic to help them use it to build their practices." Neal also worked with Rego to develop a long-term, strategic marketing plan that defined specific actions and materials and to establish a target list of 100 prospective accounts to whom they could concentrate the sales efforts.
During the next two years, the laboratory worked on accomplishing the goals for its internal operations and, with Neal's help, developed a new logo, corporate image brochure and direct mail campaign that involved sending 1,000 pieces to the same dentists at six-week intervals--eight different times. They were on the right track: by 1994, sales hit $930,000--a 33% increase in two years.
In 1995, Rego made a decision that set the laboratory on course for explosive growth. "The marketing was really working--and when we'd get too busy, we'd just raise prices. But at one point, we couldn't raise prices any more. It was an $85 crown," he says. "So I knew we had to take the next step--we had to be able to produce a crown that was worth more." The laboratory decided that additional esthetic training was required and, over a two-year period, invested a substantial amount of time and money in all-ceramic training with Lee Culp, Matt Roberts, Gerald Ubassy and others.
"These kinds of high-level training programs are like a religious experience! You leave there and you're so excited and committed to applying what you've learned," he says. "And we demonstrated that commitment to our employees by stopping production on Fridays and paying them for a full day of training." Over time, Rego also got several of his clients to attend these programs with him and now they're his top producers--15 of these dentists account for 60% of his business. (The laboratory has 45 regular clients and 100 occasional clients.)
Meanwhile, Neal and Rego continued on their steadfast marketing track. In 1996, the laboratory hosted a high-profile clinician and promoted the seminar by mailing 6,000 brochures--twice. One hundred dentists attended, 70 of whom were current clients. While the laboratory spent $30,000 and only made back $20,000, the clients who attended increased their laboratory bills by an average of 20%. "They started prescribing more expensive restorations," says Rego. "A seminar is a good way to get your customers 'revved up' and it's invaluable to affiliate your laboratory with someone with a recognizable name."
Less than a year later, Neal and Rego launched an eight-month national advertising campaign; they produced brochures and ran journal ads on products like Captek, In-Ceram, Targis, Empress and Procera. "Our goal was to give the laboratory a consistent and unique visual identity in its target markets through constant mailings and exposure," says Neal. "We also wanted to focus on the lab's ability to deliver various products and services that local laboratories might not provide because they can't afford the technology."
They also developed a marketing package--including an image brochure, prep guides, fee schedule, bur block, golf shirt and mailing labels--and designed a logo to reflect the laboratory's new name: Smile Designs by Rego. "I was never crazy about the word 'laboratory' and I thought the new name emphasized the fact that we specialize in full mouth reconstructions," says Rego.
AFTER: In 2002, with a staff of 12 technicians (that's the same number of technicians as in 1992!) and two student pre-waxers, Smile Designs by Rego achieved $2.5 million in sales. Rego attributes this dramatic increase to better training, enhanced productivity and especially to a significant increase in fees. For example, the laboratory's average price for a PFM has increased 600% in 10 years--from $50 to $300.
Management and staff are paid well and the laboratory offers benefits including a 401(k) plan. And, just as importantly, Nelson and Juan Rego are doing the type of work they set out to do.
"This is an example of going from one extreme to another; it demonstrates that it is possible for you to do more with your business if you truly want to," says Neal.
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