Part of our role in brokering dental practice sales is also marketing existing practices to make them sale worth either now or when the time comes. Below is an extract from our ‘best practice’ marketing manual, available on request. Alternatively, make an appointment with one of our marketing consultants:
Somebody made the observation that the way to success is not by trying to do one thing 100% better, but to do a hundred things 1% better.
That’s very powerful advice. But there’s a more targeted formula that can make you a lot more profit on a much larger turnover. I call this formula the ‘Ten Rule’, and it’s described in many marketing and business building texts. Let me explain how easily it works in Dental practice.
Too many businesses – and this includes Dental practices – rely on only one source of income to build their sales and profits – usually that’s direct sales to clients. They rely on their regular clients coming in through the door every day to provide their income. But what if less of those clients start coming in? Your marketing is probably not geared up to using other forms of marketing to keep sales high and new clients coming in. Referrals, direct mail and advertising are some of the ways to strengthen your revenue stream.
There are just 3 ways to make your practice grow:
1. Get your clients to come in more often (increase the buying frequency)
2. Increase the size of your practice database (more clients)
3. Get your clients to buy more in dollar value each time they visit (increase the average spend per visit)
Let’s illustrate the point with some figures:
Say a practice has sales of $300,000. The practice sees 3000 clients 2 times a year, each with an average spend of $50 each time they come in. That gives sales of $300,000.
If we looked at achieving a 10% improvement in TOTAL sales we would then have a sales figure of $330,000.
So 3000 (clients) x 2 (visits per year) x $50 (average transaction) = $300,000 (total sales)
However, what if we look at improving each of the above 3 areas by 10%?
That would mean: 3300 clients coming in on average 2.2 times per year and spending $55 each time – the sales generated now rises to $399,300, which is a significant increase on an across the board 10% rise in sales.
So 3300 (clients) x 2.2 (visits per year) x $55 (average transaction) = $ 399,300 (total sales)
I can tell you right now that 10% increases in each of these areas is quite possible and the ideas in this Manual will get you well on the way. But if you put in extra effort in each of these areas the possibilities become exponential.
What if we pushed client numbers up by 20%, visits up 30% and with good up-selling and cross-selling techniques (which we’ll teach you in this Manual), pushing up the average transaction to $65?
That’s 3600 clients coming in 2.6 times a year and spending $65. The resulting sales figure is $608,400. That’s a 102% increase!
So 3600 (clients) x 2.6 (visits per year) x $65 (average transaction) = $ 608,400 (total sales)
Those marginal improvements have an amazing compounding effect. So there is truth in doing 100 things 1% better. And it is very achievable.
Can you start to see the power of this principle? It has to be one of the most achievable and dramatic changes you can make to your marketing plan. If you grasp this principle and the techniques to build these three areas, you can dramatically increase your business and profits.