Un-leveling the Playing Field: Overcoming Commoditization in a Rapidly Evolving Market

Un-leveling the Playing Field: Overcoming Commoditization in a Rapidly Evolving Market

Like it or not, rapid advances in CAD/CAM technology and material sciences are commoditizing the lab industry more and more every day. With the implementation of these technologies, quality restorations are now produced more quickly, accurately and cost-effectively than ever before. The changes in operational workflows have resulted in significantly lower barriers to entry for the lab industry as a whole. Although there are half as many dental labs in the industry as a decade ago, large production labs and outsourcing to overseas providers have captured the increase in demand for restorations from more dentists in the industry.

OVERCOMING COMMODITIZATION

There are several effective ways to succeed in an industry when commoditization is occurring. Most importantly as a small to medium size lab, don’t try to stand alone. Becoming part of a dental lab network is imperative. A strong network can provide resources and services, technology support, specialized products, and even marketing assistance. Most small labs don’t have the human, financial, technical or time resources to fulfill the demands that are required to overcome the challenges of commoditization. Being part of a larger network provides purchasing power, allowing products to be purchased in larger quantity passing savings along to network partners.

SETTING YOUR LAB APART

BE EASY TO WORK WITH

Labs should strive to be as easy to work with as possible. One way to achieve this is through responsive customer service. Be sure to respond to your doctors as quickly as possible. Where possible, labs should strive to make sure that they can take as much work from their dentists as possible.

OFFER CONSISTENT AND FLEXIBLE COMMUNICATION

A consistent dialogue with the dentist through various communication channels is important. There are multiple media avenues to do this. A strong website, emails, direct mail, voice calls, etc. Although it must be done discreetly, studies show the most direct ways to communicate a message is through text messaging. AmericaSmiles, dental lab marketing services, provides dental labs the ability to implement these communication tools.

OPTIMIZE YOUR DENTISTS’ WORKFLOWS BY DIVERSIFYING YOUR SERVICES

According to the NADL business survey, 63% of labs provide multiple services. The 37% that provide one service are likely to be small labs that limit themselves to removables or crown and bridge restorations. Labs that are not full service should make efforts to become full service. This is no longer a slow, cumbersome process. Outsourcing, to a greater degree, has become seamless with technology. Continue to expand services whenever possible. The more you can provide your dentist the less he will need to turn to competitors. You want to be their first and most trusted option.

PROPERLY COMMUNICATE THE BREADTH OF YOUR SERVICES

To stay competitive in the US market, labs should make sure their dentists are aware of all their available services. Most small labs undersell what they offer. They may be known for crown and bridge, but they may provide other services as well. Because their dentists may assume that is all they do, he may use a different lab for other services. Small labs need to do a better job of communicating what they provide, so at least there is a consideration for additional services. The ultimate objective is to be the first point of reference for the dentist.

LEVERAGE THE FACT THAT YOUR RESTORATIONS ARE MADE IN THE US

Transparency is a crucial piece of the puzzle. Many dentists decide to work with a laboratory partner under the assumption that restorations are produced in the US when, in fact, they are made in an unfair trade country overseas. Some states require certain levels of disclosure, but many do not, and requirements are inconsistent from state to state. Be able to provide documentation or easy to access sources that your restorations are produced in the US, and the raw materials you are using are meeting high-quality standards. AmericaSmiles Network partners can provide their dentist with this information through the network’s ACDLA website. When a dentist knows that your lab is part of a larger self-policing network, it provides peace of mind. The website also provides dentists with a platform to register each restoration with the lab and offer a warranty. If something happens with a case, the dentist should know that their lab has systems in place and has done what is required to stand behind their product and services.

BECOME A KNOWLEDGEABLE ASSET AND PARTNER TO YOUR DENTISTS

Consistent education on material science and clinical dentistry is critical. This positions the dental lab as an asset in providing a more robust, flexible or solid treatment plan. This also means staying up-to-date on equipment and evolving/innovative workflows. For larger and more complex cases, dentists are seeking a concierge experience, including digital services and customized workflows. Be able to discuss industry trends with your doctors. Intra Oral scanners are slowly integrating into the market. Are you able to provide your dentist with insight into the pros and cons of a scanning device?

PROVIDE OPPORTUNITIES FOR YOUR DENTISTS TO GROW THEIR PRACTICE

AmericaSmiles labs have the unique position of optimizing their dentist visibility on the nation’s largest network of patient referral websites. AMS hosts and manages the largest network of patient referral websites in the country. Network labs can place their dentist on these patient referral websites providing each dental office a full profile of their practice as well as products and services. Most importantly, network labs dentist profiles are optimized so their dentists are the first to be seen first seen when potential patients are searching for a doctor in their area. This is an added value that few can offer.

OFFER CERTAIN PRODUCTS AT LOSS OR BREAK-EVEN

Many businesses strengthen their customer’s relationship by providing a product or benefit to their loyal customers at a loss or break-even cost point. It is best if the item requires very limited storage, has a reasonably long shelf life and requires minimum operational processing. Primarily, the item should raise fixed cost very little or not at all. Try to offer a consumable product that your dentists use on a consistent basis. Any product that meets the criteria above will serve the purpose of bringing added value to your customer while strengthening your position against the competition and overcoming commoditization. Most dentists have not gone the route of digital impressions and still use traditional impression material. America Smiles cooperatively purchases impression material so network labs can supply their dentist with a quality impression material at discounted prices. Even if the lab sells it to the dentist at a break-even point or a reasonable loss, this is a benefit that the dentist will not receive from competitors. Since we work exclusively with dental labs, the dentists are unable to purchase this product direct but exclusively through a network lab. This is something a dentist would have to consider when a competitor gives them their sales pitch.

THE PLAYING FIELD:

When a competitor is trying to take your account, they are going to sell three primary elements of their product and services: quality, service, and price. Most likely in that order. Every lab claims they have the greatest quality and service. If they didn’t, they wouldn’t be in the game. No one trumpets they can sell for less because they have lower quality and don’t stand behind what they represent. When your lab fails to bring added value, the playing field is level. When the playing field is level, the only differing factor is price. When the only differing factor is price, the result is commoditization.

Unlevel the playing field. Leverage your added values. Make the dentists consider more than quality, service, and price. When you trumpet added value, your customer is forced to consider what the competition doesn’t provide. Doing so will keep the playing field tilted in your favor.
It is projected the lab industry will continue to evolve at a rapid rate. Labs that don’t adapt will die. Stay ahead of the curve by increasing flexibility and providing as many added value-added services as possible. This is crucial in keeping your business in an advantaged position.