Price Erosion: Vident/Nobel Biocare Panel Focuses On Strategies to Compete
Posted Apr 05, 2012 in LAB DAY
The 200 attendees* at How to Control the Future Before the Future Controls You, co-sponsored by Vident and Nobel Biocare, received a digital, handheld device so they could provide instant feedback to questions posed by Moderator Mark Murphy, DDS, FAGD. Their answers were immediately displayed on a large screen at the front of the room.
One striking statistic: 87% of attendees said an undue amount of pressure is keeping them from raising their fees. Given the price erosion trend in our field, this number didn't surprise panelist Richard Harrell, Vice President, DSG. "There is significant pressure across the industry on our average selling price," he said. "From the impact of offshore, new technology and dental group practices, there's a lot of constriction on what we can sell our products for."
Given that reality, the discussion focused on how to diversify in order to boost sales, increase efficiency and client loyalty, and cut costs. In addition to offering in-lab shade-taking services and providing client education, here are some of the ideas shared by the panelists:
Conduct an "internal audit" by looking at your entire cost structure: re-evaluate your disability insurance, negotiate your rental space or lease, or consider partnering up to maximize your buying power.
Evaluate your partners. "Have a report card for each of your vendors. Can they offer you free shipping? Do co-op advertising? All of these value-added things can help keep your costs down," said Warren Rogers, CEO of Knight Dental Group, Oldsmar, FL.
Look for alternative revenue streams. "Within your market, there are alternative markets you can serve--there's an awful lot you don't do that someone else is doing," said Harrell. "This may require that you outsource the product, but outsourcing can be the solution to capture more of the available dollars."
Entice with "upgrades." For instance, on its anterior PFMs, Knight Dental Group now offers color-adapted blending. "It takes just five extra minutes of a skilled cosmetic technician to do the work, but we're able to charge 25% more," says Rogers.
Offer your technical expertise. Vanik Jinoian, MDT, Cera-Tech, Stein, Switzerland, admits he took a risky approach in this area. "We evaluated all of our dentists' preps and impressions and then offered our expertise to those who were lacking; if they took our suggestions, we gave them a free crown," said Jinoian. "They really appreciated our input. It gave them the feeling that we are their partner, and that we can help them if they're in trouble."
Boost your image. Dentalstudios, with locations in Toronto and Burlington, Ontario, is positioned as a very high-end, boutique laboratory and it reinforces that brand by delivering cases with a beautiful, four-color patient brochure about the laboratory. "It's not about information, it's about emotion," said Trevor Laingchild, RDT, AAACD, President. "We want to evoke a feeling of exclusivity--with both the dentist and the patient--and make patients feel they've chosen the right dentist, and make our clients want to work with us."
A look ahead
Attendees are optimistic about business in the coming year: 73% predict sales will be "up markedly" or "up slightly" in 2012. And while the panelists acknowledge the existing challenges such as price erosion, offshore competition and rising fuel costs, many of them are also optimistic about 2012.
"So far this year we're 20% higher than 2011," said Jinoian. "Implant cases have really grown, and I believe offshore business is going to slow down because China is concentrating more on its domestic market. There are 1.5 billion people in China and that's a huge market."
Harrell, on the other hand, is more guarded. "We're in an election cycle and historically that's bad for the economy," he said. "We could have a great spring but the whole thing could fall apart in the second half...we need to be cautious."
*68% of the attendees were laboratory owners and managers; 53% were from full service labs and 38% were from C&B operations
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