Many dentists contact me and say “There’s a new practice opening up down the road, how can I differentiate myself from them?” — it’s a great question but the answer, as ever is “it depends!”
The question isn’t actually that simple, what we should really be asking is “How do we compete with the practice down the road?”
In 1980 the business guru Michael Porter wrote a paper which looked at generic strategies of a business, he broadly summarised them into two categories:
This strategy involves winning market share by appealing to cost-conscious or price-sensitive customers. It involves full integration across the entire business to reduce costs. It involves high asset utilisation rates (using assets of the business such as equipment and premises to the maximum), minimising input costs (purchasing at the lowest rate possible), scaling the business to make maximum profit from each unit sold and standardising services, often with no-frills.
Practices often seem to think that using a cost leadership strategy is about simply reducing prices, it isn’t, it’s a full-scale business strategy which penetrates through everything you do.
It’s a very effective and valid strategy and if you get it right can become a real barrier to entry for the competition… They simply can’t scale large enough and compete with your low prices!
The real problem with the cost leadership strategy is that if you pick and choose how you implement it it can become very weak. It then becomes a race to the bottom because you have not blocked your competition by being cheap enough! As a single-handed practitioner or small practice in dentistry playing with a cost leadership strategy is playing with fire as you play with the big boys!
As the name suggests this is where we compete with the practice down the road by being different, differentiation can occur in aspects such as:
Here’s an example: Teeth whitening, is teeth whitening, is teeth whitening, isn’t it? Well no actually. Let’s say, for example, when you see a patient for whitening you have 6 steps:
Let’s now say you decided to give these six steps a name, e.g. The Magi White 6 Step Process* — you could now apply for intellectual property (IP) on that name. Even if you don’t apply for official IP rights, you can still use your newly created name in all of your marketing… It suddenly becomes different to the way the practice down the road do it.
Many practice principles have special interest areas or even specialisms in dentistry such as implantology. Team members go on extended CPD programmes and continue to educate themselves, all of this adds to your differentiation strategy and sets you apart from the competition.
Lots of practices nowadays like buying gadgets at the dental shows, lasers, CEREC, microscopes, intraoral cameras, sedation are becoming more and more common. Again, these all add to your differentiation strategy. The digital age is here and technology is evolving as you read. Although it’s still debated digital dentistry, particularly within implantology, is advancing. Could digital implant dentistry differentiate you from your competition?
Now comes the key part, how do you actually differentiate? Simply ‘layer’ what you do. Layer all those small things you do that are different.
“XYZ dental practice offer you The Magi White 6 Step Process™ (1) laser teeting (2) whitening provided to you by BACD accredited dentists (3) with X years experience in whitening”
Layer your ‘intellectual property’ onto the ‘unique technical experience and talented team members’ onto your ‘innovative processes’ and use this in the marketing of your practice.
What you will find is that when you dig into everything you do that is different and layer it all together then no one else can compete. No one else will have all of these unique things which completely differentiate you from everyone else in the marketplace.
The same principle also works when scaled up to the entire business…
So, over to you… cost or differentiation? It’s your choice!
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