When was the last time you reviewed your fee structure?
How long has it been since you actually raised your fees?
Is readjusting your fee structure something you’ve even built in to the business plan for your practice?
Here are four signs it’s time you re-evaluate your practice’s fee structure:
1. You can’t remember the last time you raised your fees.
One sure sign you’re not charging enough is that you honestly can’t remember the last time you increased your fees. It’s killing your bottom line.
We’ve worked with dental practices who typically undercharge their patients by as much as 6%. That doesn’t seem like much, until they realize that 6% can add up to thousands of dollars in lost revenue every year.
We’ve also worked with practices who undercharge by up to 50%. Imagine the financial beating those practices are taking every year.
If you’re like many dental practitioners, you might hesitate to raise your fees, especially for your long-term patients. You might worry that increasing your prices might make them unhappy enough to leave your practice.
As a matter of fact, patients actually expect you to raise your fees from time to time. Unless they’re already considering leaving your practice, raising your fees a few dollars higher isn’t going to compel them to start looking for a new dentist.
What raising your prices does, however, is allow you to patients them with more advanced technology and equipment, and better care. That’s what makes them more likely to stay with your practice and refer their family and friends.
2. You’re falling short of your financial goals.
When you’re at risk of losing thousands of dollars in potential revenue, it can add a tremendous amount of stress on you, both personally and professionally. You’re unable to make the necessary investments in your office, equipment, and technology that will keep you competitive. You’re also not living the lifestyle you envision when you first started your career.
If you’re falling short of your financial goals, now is the time to develop a vision for your practice. Create clear personal and professional goals and give some thought to how much time you’re willing to work to meet those goals. From that vision, work backward to determine how much money you need to bring in each week, each month, and each year. That should be what dictates your fees.
3. You take pride in being the “most affordable” dentist in your community.
A reputation as the most affordable, least expensive dentist in your community is not necessarily a good thing. The fees you charge send a powerful subliminal message about the quality of your practice, and if your community reputation is “cut-rate dentist,” current and potential patients will assume you don’t have the most up-to-date technology, equipment, staff, or environment.
You’ll also attract bargain hunters who are looking for a deal rather than looking to establish a long-term relationship with your practice. Not sure of the price range in your community? All it takes is a little research. You can find this information online or through your local dental society. Establish a solid fee for each service and then make adjustments twice a year. Increase fees by 2% and then 3%, for a total of 5% for the year. Your patients will hardly notice, and your bottom line will be much healthier.
4. Your pricing structure is incoherent or confusing.
Some dentists purposely set their fees too low for some services and too high for others. For example, they might overcharge for crowns and undercharge for hygiene treatments. Unfortunately, an incoherent structure like this only serves to confuse and annoy patients, which might justify their leaving the practice. It’s much better to base your fees on your personal and financial goals, as well as data from the community you serve.
It makes much more business sense to base your fees on your personal, professional, and financial goals, as well as on data from the community you serve. The key is to adjust your fees based on research and logic, establishing a fair fee structure for both you and your patients.
The thought of raising your fees might be intimidating, but if you put off doing it, your practice will suffer in the long run. It’s all part of running a successful business. To ensure success and meet your goals, you must make sure to align your fees with the demographics you serve and the quality of care you offer. We’d be delighted to talk with you to determine whether your current fee structure is aligned with your personal and professional goals, and offer suggestions as to how you might change your approach.
Schedule a complimentary Discovery Call today.
Because of the high demand for our consulting services, call times are limited. If even one idea — one tiny shift in the way you do business — could make your practice more satisfying and profitable, why wouldn’t you take advantage of this complimentary opportunity?
We’d love to help you reach your goals. We look forward to your call.