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Inside Dental Technology
May 2011
Volume 2, Issue 5

The Price is Right

Six successful strategies to maintain higher fees while still retaining clients and attracting new business.

By Alan Barnes

In a down economy, dental laboratory owners are often tempted to lower fees in order to maintain business or gain new market share. Before you adopt this business strategy, you might want to familiarize yourself with a study conducted by imaging giant Kodak. The study concluded that for every dollar cut from the price of a product, the seller had to make 10 additional dollars to retain the same profit percentage prior to the fee cut.

The Kodak study found one exception—if the seller has integrated new, automated technologies that increase productivity. However, even then, it is important that you know all of the costs associated with operating the new technology and set your fees accordingly. Remember to add in everything, including all consumables, software updates and maintenance, training for your staff, marketing costs, structural changes, and possible increases in utilities. Do not forget increased shipping costs if you are depending on outside support services.

Many laboratory owners who have lowered their fees to attract new business have found that it does not bring in the huge influx of work they had anticipated. When they market low-fee products to a new area hoping to bring in additional work, they often find the price competition is so fierce that the lower fee is usually not enough to land a new client unless it is a practice that shops only for price. Then, it becomes a "how low is low" game.

Before you think about engaging in price warfare, address the most important aspects of your current business. Maintaining the quality of the products and services you provide should be first and foremost. If either slips, you could lose business. You should also concentrate on maintaining communication with your present accounts on a regular basis.

1. Develop a realistic mailing list for marketing.

Do not market to more clients than you can reasonably serve. If you are a small operation currently serving 20 accounts, include them in your marketing program and target 100 new clients that you would like to do business with in the next few years. Ensure that you or your marketing/sales team make follow-up calls or visits to every name on the mailing list or at the very least, send a follow-up mailing. Track these follow-ups and the responses you receive with a business management software system that organizes your calls, mailings, visits, etc. Sometimes these programs are referred to as customer retention management (CRM) software. Avoid the temptation to send 4,000 to 5,000 direct-mail pieces. You may be highly disappointed in the results. Because the key to marketing is repetition, a mass-mailing approach can also prove to be cost-prohibitive.

2. Teach clients something that will save them time or enhance their practice.

Be prepared to support clients with lunch-and-learns, presentations at clinical study clubs, seminars, webinars, etc. Become their expert—whether it concerns digital implant planning, oral appliances for sleep apnea, high-end removables, ortho, cosmetics, digital impressions, cosmetic treatment planning, or partial-denture designs. Position yourself as a knowledge center that they can turn to for support. This will separate you from your competitors. 

Stay ahead of the curve and develop new markets. For example, in the sleep apnea arena, new computer chips will be introduced that can be imbedded in an appliance to record how long it is worn each night. Compliance in sleep is becoming an important aspect of practice management. Being the first to master this and bring it to your dentists and the sleep centers they work with positions you as a leader.

3. Provide CE credits for your seminars.

You can contact the American Dental Association (ADA), the Academy of General Dentistry (AGD), or the National Association of Dental Laboratories (NADL) for applications to become a CE sponsor. Check with your state dental boards for requirements. Find out the amount of CE required and the renewal dates. Make sure you are not sponsoring a program that is in conflict with dental societies, study clubs, universities, or your competitors. Planning is key. If you work with a manufacturer, carefully work out all the details as to who is doing what.

4. Communicate, communicate, communicate.

Send out well-written newsletters. For practices that are digitally aware, a one-page e-newsletter can be quite effective. Give your clients useful information, and be careful about special offerings and discounts. It is hard to maintain high fees when your marketing pieces look like a weekly shopper's special. All pieces must be carefully written and contain high-quality images. Convey the message that your laboratory services will make them look good.

5. Include your staff in marketing and sales planning.

The more you collaborate as a team, the better your results will be. Everyone should be on the same page and be supportive of the sales effort, making client contact as personal as possible.

Visits to practices are essential. Encourage your sales people to stay out and end the day on a good note. They need the freedom to be creative, without having to spend each moment of the day accounting for their time. You will know if they are doing well by the new business generated. 

6. Familiarize yourself with the science behind charging higher fees. 

Examine how you address technical products and training in your laboratory. Now ask yourself if you apply the same amount of time and effort to your marketing and sales initiatives. Rest assured, the science and art of sales are as important as your technical directions. Make your sales calls as scientific as your technology. The authors of How to Sell at Margins Higher Than Your Competitors: Winning Every Sale at Full Price, Rate, or Fee provide examples of "scientific" methods to overcoming price objections.

Rather than engaging in price haggling, the authors suggest practicing the "Feel Felt Found" technique. Your conversation may sound like this: "I know how you feel, Dr. Jones; we have had other doctors that felt the same way when they first started with us. Within 1 month, they found that the time they saved on seating our work more than made up for the slight price difference. I know we can provide you with the same experience." 


1. Steinmetz L, Brooks WT. How to Sell at Margins Higher Than Your Competitors: Winning Every Sale at Full Price, Rate, or Fee. Hoboken, NJ: John Wiley & Sons, Inc.; 2006.

About the Author

Alan Barnes facilitates The Barnes Group as well as the Detroit Dental Sleep Network, a think tank of dental practices in the Metro Detroit Area.

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