Working with dental practices, we see a huge amount of data – of many different types – every day. We analyse profitability, productivity, leads, conversions… But we’ve always said that if we could choose only a single metric to look at, it would be Average Daily Yield (ADY).
We’ve explored ADY in more detail before, but in a nutshell, it’s the average income a clinician generates in a working day. It’s particularly helpful because looking at it provides a steer on a whole range of areas, from profitability and operations to morale.
If you’re considering ADY, you’ll first need to know your running costs and patient numbers, as these will vary from practice to practice. However, as a rule of thumb, an associate in a private practice today should be generating an ADY of around £1,750. This will allow 45% for the associate, the covering of running costs, and an important profit margin for the practice.
However, simply knowing an ADY isn’t helpful in itself. You also need to know what that number is telling you. If you’re seeing bad ADYs, what does this mean?
From the start of their careers – even from the start of their training – it seems dentists are taught that being busy amounts to being profitable. If you’re seeing 30 patients a day and have a nice full diary, you may feel comfortable that your practice is doing well. With this in mind, as economic realities loom large, with the costs increasing in your business, you may have reacted by simply raising your prices. This works while there’s a degree of price elasticity, with patients willing to pay more. However, throughout the industry, we’re now seeing this elastic reaching its snapping point.
If you’re not working on your business behind the scenes, there’s only so far that price increases can take you. Eventually, patients become unwilling to pay what you’re asking – and we’re now seeing accumulating evidence that treatment plans are being refused or deferred, diaries are becoming gappy, and dentists are beginning to panic.
So, if you’re encountering low ADYs, it’s your cue to start looking at what might be lurking beneath the surface. Instead of a knee-jerk price hike, examine the possible reasons.
A gappy diary
Gaps aren’t always bad – they can also represent an opportunity to look at added-value moves for your practice. However, if the flow of patients just isn’t there (for instance, if you have the overheads of a four-surgery practice, but the patient numbers for two), it’s unfair to expect your clinicians to hit a target ADY.
A badly structured diary
Your diary may be full, but if it’s not structured well – if your attention is pulled in many directions – your outcome won’t be as good. Of course, being busy can result in profitability, but if it were this simple, we wouldn’t be seeing so many dentists walking away from their “quantity over quality” NHS contracts.
Sub-optimal service
Communication can make all the difference when it comes to converting and keeping patients. If you’re not getting the numbers you’d like, take a look at how strong your practice’s customer service is. For example, if an enquiry comes in on a Sunday, when do you respond? Regardless of your Monday morning rush, it’s best to react quickly – a fickle future patient won’t care that you were busy, only that they didn’t hear from you. Sadly, if you push your response into Tuesday, there’s a high chance they’ll have gone elsewhere. Should you have responded on Sunday?
Not proposing treatment plans
Ask yourself: are we confidently proposing treatment plans? Routine appointments alone will never generate a huge profit. Instead, proposing treatments and creating a high-quality practice experience will unlock the door to higher-value dentistry.
With a tidal wave of costs on the horizon, you have to be looking at your ADYs to keep your head above water. If you’d like help with improving yours, or think you’d benefit from an outside perspective on your practice’s profitability, do get in touch.
