The massive and sustained growth in private dentistry has been fuelled principally by the provision of high value treatments like implants and adult orthodontics. The vast majority of these new patients originate from a web search. Inevitably, as the market has grown and the number of providers has exploded, competition has increased and in a crowded marketplace, when the competitors start biting at your patient base, the natural defence mechanism to reach for is price.
By reducing the price of an implant from the typical local ‘informal cartel’ price of £2,200 to £1,680 you have a headline price that is compelling and will almost certainly increase your new patient enquiry traffic. In time, your competitors will either align to your new price of £1,680 or more likely drop to £1,595, and so the cycle goes on until you are competing with a headline price of £995 for an implant in your catchment.
But the actual size of the market won’t necessarily grow, in other words, by reducing the price, more people won’t suddenly decide to have an implant. All that’s happening is the consumer gets a lower price, however, often this does not necessarily mean that they receive the same standard of treatment, because there is an understandable drive to reduce the cost base.
Does this mean that private dentistry in the UK and Ireland is doomed to wafer thin margins?
The answers a very definite NO.
In a previous life, when I was tasked with explaining why price is not the only arbiter of consideration for a purchase, I would trot out the following;
…Imagine you are a Martian and have landed on planet Earth only to discover that all the primitive Earthlings rush around in tin boxes called “cars”. You realise you need one of these cars to get around and discover that although they are all essentially the same thing, they require different amounts of Earth pounds to acquire one. In desperation you ask one of the Earthlings to explain the difference between a Ford Mondeo 2.0 and BMW 320 — both have two-litre diesel engines, four doors, carry five Earthlings, and travel 45 Earth miles per gallon of fuel — yet there is a 29% difference in price between the BMW and the Ford…
I would then ask the audience to articulate the difference between the two products for the poor confused Martian. They would end up saying things like “well, the BMW is German, or the BMW is more trendy / aspirational / high status / stylish / feel-good / a driver’s car etc, all of which is meaningless to the poor Martian who, of course, buys the Mondeo and saves himself 29% Earth pounds…
Is dentistry different from all other consumer markets where price is only one of many factors that determine a sale? Buying motivation is complex — why is it that we choose Apple over Dell? Why do we pay five times more to travel business class? We do so happily for lots of perceived reasons that are primarily about brand and positioning, which we articulate as confidence, safety, and aspiration. Ironically, a high price creates the notion of being reassuringly more expensive. And therefore best.
How does your brand perform — is it a Dell or an Apple? Are you a discounter or a John Lewis? If you would like an audit of your current brand please call us, we will be delighted to help.