It looks like we might just be moving out of a Covid world into a post-Covid world. What does that mean for your business? We can learn something from how businesses fared during and after recessions of the past. That’s not to say this is the same (there are important differences that haven’t all been bad for dentists), but some things do seem similar such as: a rise in unemployment when furlough stops; a corresponding fall in income among people who live on income rather than assets; a corresponding squeeze on spending on non-essentials. Competition for the dental pound, it follows, is going to heat up.
The past year has been novel for dental practice owners. Many of our clients saw revenue increase to record levels after they adapted to Covid protocols and received a bump in new patients migrating from NHS practices which, frankly, let them down. Many of these patients had more free time and more disposable income than usual because they weren’t working but were still being paid. They suddenly had the time and cash to sort out those big ticket treatments they had been meaning to do for years.
What these switched on practice owners are doing now is preparing for the return to a more competitive market. They realise more practices are catching up in terms of service delivery. Everyone knows that all those customers that were free and easy through 2020 and early 2021 are getting harder to reach because they are socialising at the pub again, and spending their money on restaurants and holidays again. And they’ll be back at work soon (if they have jobs to go to) if they aren’t already.
So while practices benefitted from a limited burst in demand for high value treatments, things are going to get more challenging as we move into the next phase. There is a debate over whether there is a recession coming, and we don’t need to get into that here. We just need to accept that we are moving out of the first phase of Covid and into what looks like a longer phase of post-Covid adaptation by businesses. In this phase consumer markets will get more competitive to create more choice for consumers, and dentistry is no different.
This means that if you haven’t increased your marketing spend during lockdown, now is the time. Practice owners who maintained their marketing budgets through 2020 did well. Some reduced their budgets and still did well. But now there is a strategic opportunity to invest in long term growth. We know that investing in marketing during a recession is a long term growth catalyst. A study by Meldrum & Fewsmith of the US recession of 1974-75 and the post-recession years, for example, found that companies that didn’t cut their ad spend experienced higher growth afterwards.
You may not get an immediate uplift but the pay off will be sustained when it kicks in. Recessions can be short lived, and lockdown was just a year (so far), so the opportunity here is time limited. If you leave this period with a bigger market share, it’s going to pay dividends for many years into the future. Think of a cargo ship changing its course by a fraction of a degree. Over thousands of open ocean miles that small course correction compounds and the ship eventually arrives at a different country or maybe a different continent.
If you are looking for immediate ROI, that’s fine, there are marketing activities that can deliver this (and some that won’t and might actually undermine your business). But what I am talking about here is your long term strategy to improve your financial performance. All of your marketing must cohere around this objective.
Here is a case in point. Mark Durnall, the owner of Pure Dental in Truro, Cornwall, grew his revenue from £500k to £2m by investing 10 times more in marketing. This gave him more market share which pays off exponentially. He got through 2020 very well. What he did years ago continues to yield more and more, and he is seeing phenomenal year on year growth. Watch our video with him explaining his approach here.
- He mentions marketing investment at 7.24 mins
- Revenue growth at 11.04 mins
- Competition at 15.55 mins
You will have heard people say that the new normal is going to be a different way of life, and the media and marketing landscape will change unrecognisably. But the world doesn’t change that quickly. People build their cognitive systems for decades, and these don’t change because of one year of lockdown. So everything Mark is talking about, in my view, still holds true today.
Let’s move out of the emergency footing that got you through 2020 and shift to a longer term plan for what your revenue over the next three to five years needs to be and how we get there. It’s the perfect time to revisit your strategy. Give me a call if you’d like to discuss how we can support your marketing planning activities.