Be Proud of Your Fees

Just how much is a porcelain fused to metal crown really worth?  Or a zirconium? Or pressed to metal? Or any other combination of materials that you can think of really worth?  For the sake of this discussion lets simply look at PFMs for a minute.  Is it $550, $350, $250, $150, $79, or the $29 that I understand we can get shipped to us from oversees.

If your client can get the exact same product, process or service down the street at a lower fee why in the world would they buy it from you if it costs more?  It would make good business sense to lower their cost of operation by seeking the lowest bid, the lowest price, and the lowest appropriate supplier of products processes or services.

In the February Dental Town magazine Jim Glidewell, CDT, is interviewed and he is quoted asking the same question a different way.  He says:

“There are a lot of ranges of quality in our industry, the very high end quality is completely overpriced as far as the GUYS getting $250-$350 per crown, if you ask them what they put in that someone doesn’t put in it is usually ego.  We all buy our porcelain from the same place and we all use the same exact metal.  So you receive a crown back at your office.  Does it have contacts that fit?  Does it have occlusion that fits? Are the shades the correct shades?  Are the materials FDA approved?  What we have done as a large lab is be able to offer the quality of a small lab but with incredible lower prices.  It is the same as if you buy your Panasonic TV from an expensive retailer of if you buy it form Wal-Mart. You are getting the same product.”

Jim Glidewell, CDT, asks an interesting question.  What differentiates a crown frown a crown from a crown?  If it is just the materials used and the manufacturing processes, the quality indistinguishable, and the services aspects so similar that a dentist client cannot tell the difference, then Jim Glidewell's rhetorical question needs no answer.  He would be right.  If quality, artistry, relationship, resource support or educational partner are part of the differentiating aspects of who you are and what you do, he may not.

The title of this article is being proud of your fees.  So I am going to tell you to how to become more proud of your fees.  I challenge anyone who reads this JDT Unbound article to hold a short afternoon workshop with your key employees.  Divide it into three sections.  The total exercise should only take about an hour spread over three meetings

First;

Take 15 minutes and brainstorm with an open piece of paper in front of you, or a whiteboard, or a chalkboard, “What is it that differentiates us as a lab to our client doctors?”  Adhere strictly to the rules of brainstorming, no judgment, all ideas are good ideas, and try to generate as many as you can in 15 minutes.  Hopefully you will fill a few sheets of paper.   You can talk about quality, process, procedure, relationships, trust, support, technical training, helping the doctor grow, solving problems for him, treatment planning, and on and on.  Once you have that list firmly together.  Organize it and type it up alphabetically.

Second;

Come back together for 15 or 20 minutes on a different day.  Distribute copies and have everybody score those items that you brainstormed with prioritization numbers.  You can use 1-5, with 5 being the most important from the entire list.   So, if there are 20 items on the list you can only pick five, and have to assign a priority that YOU feel from 1-5 for each.  (One 1, One 2, One 3, One 4 and One 5).  Have someone reduce the list to just those items that received votes.  List them from highest score to lowest.

Finally;

When we come together the 3rd time, we are going to take a look at but just the items that received the highest number of votes.  That list is going to become the working list that we look at and really analyze how these particular items add value to what we provide to our clients.  It is these things we should focus on.  They are likely, our core competencies.

Two important possibilities;

If the list ends up being all about the quality of the manufacturing process, materials and our training and not about the relationship we have and value added services we that we provide, we may be susceptible to lower price initiatives from disruptive innovators within the industry.

If our list however includes less tangible, less comparable, less competitive, pricing issues like help with treatment planning, clinical education, expertise, consultation on materials products and processes, then we can really be proud of the value added services that we provide and the percentage of the total fee that that makes up. 

Jim Glidewell, CDT, is right when he says we all buy or porcelain from the same places and we use the same exact metal and the doctor does receive a crown back in the office at the end of his story.  And there are minor difference in the porcelains and if somebody is using 5, 7, or 15 powders, that is different than a 2-powder buildup.  But if the contacts fit and the occlusion fits and the shades are correct, how are we different and how do we become different and how do we become proud of our fees.  It has to be more about the relationships than the crowns.

As many of you have heard me say, Krispy Kreme does not sell donuts.  They sell a theater experience that just happens to be about making donuts.  Starbucks sells a café experience and Maxwell House sells coffee.  Harley Davison doesn’t sell motorcycles; they sell a reason for a middle-aged man to get dressed up in leather and scare people.  These products and services have transcended being commodities and moved into being experiences.  Many will pay for and seek experiences over raw materials, products and services alone.  Those attributes, when identified, developed and charged for appropriately, will let us be proud of our professional fees.

Enjoy this little exercise.  I think will provide some insight for you and your key employees as to how you can arrive at a fair free. Dr. Pankey always said, a fair fee was a fee that the patient could pay with gratitude and appreciation.  I paraphrase here, a fair fee is a fee your dentist, your client can pay with gratitude and appreciation, not just because it is a great crown but also because you are a great lab to work with.  Be proud of your fees.