Dr. Allen Nazeri explains why dentists compete on price instead of value. He argues that underpricing yourself prevents you from investing in better staff, equipment, and skills, which means you can't actually deliver the value patients want. Charge what lets you do good work.
Chapters
Is price and what is value?
This morning I want to distinguish between the price and value definition. And then let's look at why most dentists, they undervalue themselves.
Well, we just completed our second three day MBA in Bangkok and it was just an amazing group of dentists, entrepreneurs, clinic managers that they came. And these guys are highly successful people who already have very good number of dental clinics in their region, in their country.
And at the end of the session I asked them, what do you think after you've gone through all the three days of this program, what do you think this program is worth?
And they pretty much agreed that this program should cost three to four times the amount of what we were already charging for the MBA program.
Now why is that? Well, because.
From the very beginning that they started registering for this course or even contacting my, my team, we started building value for them and created value all the way to the very end and even after they were gone to the airport.
So when you create value.
You start ending up with clients that appreciate it. They want to continue doing business with you. So let's define what is the difference between price and value. Well, price is what customer pays us. Value is what the customer gets from us or have the perception of getting it from us is a huge difference. And somehow most dentists, they're not good at creating value. You know why? Because most dentists and doctors, they don't value themselves. They undervalue their services, their effort, their skills, their ability to be able to change someone's life.
And they only compete on price. They think price is what customers or patients are after. But that is not true. That is absolutely false. We had a gentleman from India, for example, and he was talking about how the Indian dental market, they're always after price. Well, let me tell you this, this is the internal mindset, this is something in your head that you think it's all price driven. Let me ask you this, are there Indians in India.
Or for that matter any other country.
That they're your patients, but they also go to different types of restaurants? Do they go always to the cheapest restaurant? Do they always stay at the cheapest hotel rooms? Do they always buy the least expensive cars in the market? So this, this is an internal mindset that is my mission to get this, you know, these wards shared and distributed across the globe. So I can help you guys see more value in yourself.
I was one of those dentists for many years. I used to do it very small composite filling for very, very little price until I learned.
That my skills are Much more valuable to my patients than they're willing to pay for it. That is why I had one of the most highest premium dental practices and some of the most loyal patients. That would come because of the creation of value. Now, if you're one of those dentists who undervalue yourself.
Meaning that you're afraid, you're scared.
That the patient may say no to you, and they may, the first thing you need to do is value yourself. And how do you do that? Well, the first thing you need to do is upgrade your professional skills.
When you upgrade your professional skills, let's say you are an implant surgery or cosmetic dentist or trying to do more crowns or implants. When you upgrade your skills, you're surrounded by people that also are upgrading their skills. And you become part of that circle that everyone understands, that to do proper, good dentistry, you have to be skilled and provide high level of service and expertise. That automatically will push you, think higher, that I cannot do that crown preparation anymore for $300 or $200, depending on which country you're in, or $500 or if you're in the US maybe 4000 $1200 and I may have to double up my price.
Second is to surround yourself with the winners, with people who do not whine and complain that how bad the economy is, how bad the patients are, the patients are all there to, you know, take advantage of them and take their money away. So these two things will definitely help you start valuing your services more. And you have to charge a good fee in order to be able to deliver the value.
Now, if you charge low fee and compete on that, how are you going to create that value for patients? You're going to just get frustrated, going to resent your profession, you're going to resent the fact that you ever became a dentist. So you need to focus on creating value. And this is what our MBA program teaches from the very beginning to the very end. It's how to create value.
Whether it's in your communication, sales or leadership or team building, not just for your patients, but create value for every stakeholder of your business.
Do you think the employees who are who I like to call them eagles, the star players of your company, do you think they will stay with you if you continue to, to devalue them or do not serve them well and do not provide value?
What about your vendors? The vendors that you think.
Because you're paying them every month you have the upper hand?
Do you think those vendors, if you don't provide value by giving them.
The respect they deserve, pay their invoice on time and so forth. Do you think they will stay with you or they'll try to keep your prices at the very minimum? No. And your customers, anyone you deal with, even in your family, if you're married to someone, if you do not provide enough value to them, things that are important to them, to your spouse, if you don't spend enough time, if you do not, you know, meet their basic needs, what would happen?
The relationship will end. And this is the same thing in dental practices that I see across the world. They do not provide value. They set up a dental office, they set up a boring, ugly dental office and they expect people come in and pay and they try not to change the equipment or instruments for the longest time till it rusts and breaks down. And then they wonder why.
Patients are not doing as much cosmetic dentistry or they're switching or the dentist himself is not valuing dentistry for him and his staff. Most of the dentists, you look in their mouth, they have old type dentistry, they hardly get their teeth cleaned, the tartar shows up.
And they wonder why they cannot.
Get a patient accept a good periodontal treatment or cosmetic dentistry. So value is something you must learn to create.
I hope you can join me for my next MBA training, wherever that ends up being. You can visit my website@www.com. i am on a mission to bring.
Very well consolidate the information about practice management to your groups and help you guys grow, scale and when you're ready, exit from your practices partially or completely. Again, this is Dr. Allen. Thank you so much for your attention. I look forward to your comments and any questions that you may have. Thank you.
