Dental supplies are typically the second or third-highest dental practice expense, next to staff wages and laboratory. Do you have a thorough understanding of your dental suppliers’ services and skills? Do you know what aspects of dental practice your suppliers are most suited to help you manage? What areas of your practice are they not fully trained to advise upon? This article is about specialization and why nobody should attempt to be a master of all trades.
In the 1960s, dental suppliers were fighting a fierce price war and most companies were developing new services to offer their clients. The objective was to capture a greater share of the dental market and to preserve profit margins. It became necessary for the owners and managers of dental supply companies to supervise and direct their sales force to focus upon the many strengths related to their firm’s core business, namely supplies and equipment.
In an effort to discourage salespeople from providing advice to dentists in areas they knew little about, a list was prepared and circulated at the Associated Dentists Cooperative (ADC). This trend continues today in the dental industry and in many other businesses I have studied. I’ve reproduced the original list here (Table 1).
Table 1. Strengths and weaknesses of dental suppliers
SERVICES WHICH DENTAL DEALERS BEST QUALIFIED TO OFFER
Advise on locations, practice opportunities, associateships, etc.
Draw preliminary plans and final detailed dental plans.
Supply manufacturers literature and equipment specifications.
Spot chair, centre units, supply plumber and electricians with information.
Assist in selecting equipment and supplies.
Demonstrate products, equipment, and how to use.
New product information, and supply availability.
Information, ideas, practices and customs gleemed from field.
Deliver, install and repair needed supplies and equipment.
Extend reasonable credit, and terms.
Support, assist conventions, clinics, advertisement.
SERVICES WHICH MANUFACTURERS BEST QUALIFIED TO OFFER
Knowledge, in depth on their companies products and services.
SERVICES WHICH DENTAL DEALERS AND MANUFACTURERS NOT QUALIFIED TO OFFER
Professional advice on long range plans, goals. Type of practice, facilities, build or rent.
I believe the list was first typed in 1961 or 1962 by my father, Roy Brown, and distributed to the dozens of salespeople reporting to him. He created it as part of his duty as the General Manager of the ADC. Like most other dealers at the time, he discovered that his employees were extending themselves into areas of dental practice in which they had limited experience.
Commissions on dental equipment and supplies were dwindling due to the extensive competition of the day, and the salespeople were concerned about losing their regular clients if they did not appear to have complete knowledge of a dental practice and all its workings. Sales managers were concerned that legal action could be the result of advice being administered to dentists by unqualified or untrained salespeople.
I have not changed a word in the list you see. It’s typed exactly as it was then. My father found it in his archives, and we possess hundreds of original documents similar to this one. You may recall that I have written about how things never really change, and I suggest that this list proves the theory correct, yet again.
Once you have read the list, consider the climate in the dental industry today. Have times changed that much? My father’s comments were made about 40 years ago, but I think they could easily have been written yesterday.
Many developments in training and product support have increased the ability of your supplier to advise you and to assist your practice. In my opinion, the best advances have been made in those aspects that are closely related to the “core” products of the supplier. The same observations can be made of dental practice. Those general dentists who focus upon strengthening their core business, preventive and restorative, seem to gain a more thorough competency and then prosper the most. Research indicates that dentists who switch from one new procedure to another, trying to be all things to their patients, lose their focus and may “drop the ball” on the fundamentals.
In the cycle of any small business such as dentistry, the business will occasionally enter a downturn and the owner will attempt new procedures to increase client traffic and income. We continually uncover these cycles when gathering the data necessary to appraise general dental practices. Specifically, we ask dentists to identify which services they perform in their practice and which services generate the highest income. We concluded that sub-specialty services are growing as a percentage of total income, as many dentists are taking extensive continuing education courses. The effect of this emerging trend is that dentists now refer out fewer cases that, in the past, were typically sent to a specialist.
This is the same trend now occurring in the dental supply industry, namely the expanding of services to increase income. Sometimes, the expansion is more than the business can handle, and the dental suppliers may find themselves spread too thin.
This is not a criticism of progressive business people who expand their business. To be fair, appraisal companies have developed new services in the last five years. However, the most success is being achieved by those firms whose strategy is to focus on their core business (appraisals and brokerage) while they design new services centred around them.
Specialization is a time-proven method for owning and operating a profitable business, including a dental practice. Our advice for the general dentist is to focus on your core business, preventive and restorative.
Once we learn to manage our own core business, we can learn to manage our suppliers.
Ontario Dentist – December 2002