One of the greatest fears buyers of dental practices have is that they will pay significant money for goodwill and there will be a mass exodus of patients when they take over. To mitigate this risk, any buyer needs to seriously look at the reasons why a patient frequents the practice, and give them no reason to want to change their behaviour.
The first thing to realise is that (with the exception of an owner’s family) most patients don’t give much thought or care about who owns equity in the practice they frequent. Do you as a consumer know or really care who owns the business where you buy your coffee? Or shoes?
Patients usually come to a practice for one or more of the following three reasons:
1. The Location. Many patients obviously go to their dentist because it is convenient to do so. The practice is near their home, work, kids school, etc. A practice that moves significantly will lose patients, regardless of whether the practice has new ownership or not. This is why it is paramount that a practice has strong security of tenure, by way of a long lease, when a purchaser takes over.
2. The Price. Some patients are going to their practice because they are price-sensitive, and the fees of the practice are low. As tempting as it may be, the purchaser of a low-fee practice would be unwise to raise the fees significantly in the first year of owning a practice. A new owner-dentist should give their patients a chance to get to know them first, build up their relationships, and realise the value that they represent.
3. The Personality. Many patients go to a practice because they have built a familiarity, rapport and trust with their dentist and team. Often they have been going to the same place for many years, where the team knows them and their family, and they are loyal to them. The incoming dentist needs to respect this relationship and work on ways to leverage off, rather than sever, it. If you are buying a practice that you feel has a lot of patient loyalty, due to the personality of the dentist and the team, a series of implied and explicit endorsements can help maximise a transference of trust.
Implied Endorsement
Have the vendor work in the practice post-sale. If the patients can walk into the same premises, see the same person/s behind the front desk and see their long time clinician still working there, even in a reduced capacity, it reduces patient attrition dramatically. Seeing the dentist that they trust work side-by-side with the new owner is an implied endorsement.
It also means that patients that won’t transfer easily (like the family of the previous owner) will stay in the practice post-sale.
Most post-sale commitments by owners start off as being for a short period of time (6 -12 months), and thereafter by compatibility and negotiation.
Explicit Endorsement: Dentist
Explicit Endorsements can be done verbally one-on-one or, even better, by way of a letter, newsletter or flyer from the selling dentist in the waiting room, introducing the new dentist:
- It really doesn’t have to outline the sale/transaction that has happened.
- It can mention that, after many decades of working hard, you have decided that you will be scaling back your days/hours at the practice and may take a sabbatical in the near future.
- It can say that you will be introducing a new dentist to the practice, and highlight the new dentist’s education, background and any clinical specialty (implants, ortho, TMJ, etc.) or patient specialty (e.g., children) or other skills (e.g., speaking another language) that they will be adding to the practice’s services.
- It should say that you (the vendor) take their trust and loyalty seriously, and wouldn’t introduce them to a dentist who you didn’t feel was up to the job. It would ask the patients to join you in welcoming the new dentist to the practice, and encourage them to see the new dentist when your availability is limited.
Explicit Endorsement: Staff
When there is a new dentist at a practice, the patients will often ask the front desk for their opinion. Don’t leave their answer to chance; help them out by:
1. Preparing a cheat sheet of bullet points for them about your age, experience, background, history, clinical strengths, etc.
2. It is best if they can speak from experience, telling patients that they have seen them personally, and ‘sat in your chair’. You could offer to do a scale and clean on their teeth, or whiten them at no cost, so they can give a first-hand recommendation.
If the incoming dentist leverages off the existing trust that a patient-base has with the practice, the vast majority of patients will at least give the new dentist a try. It is then the responsibility of the new dentist to make a good first impression and win over the patients. You may only get one opportunity to win over each patient, so make it count.
A good broker should be able to help you with a transition plan for your practice.
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