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Declining Fertility and Birth Rates: Planning for fewer teen starts?

Since the Great Recession began in 2008, American fertility rates have continuously declined; in fact, fertility rates hit an all-time low in 2018. Similarly, actual total births in the US have steadily declined and are currently at levels not seen since 1987.

US Birth Rates 2018

While economic downturns historically decrease fertility and birth rates, we are also seeing cultural changes that have contributed to the continued decline even after the Great Recession ended. Millennial women, more so than previous generations, are putting off having children and teen pregnancies have hit record lows each consecutive year since 2009. In fact, teen pregnancies in 2018 are down 58% compared to 2007 and down 72% from the 1991 high.

The orthodontic industry has started to experience the negative impact of these trends and it will become progressively worse over the next 10 years at a minimum. If you haven’t planned for these trends, you need to start immediately.


Competing for Non-Adult Patients

As the non-adult prospective patient pool continues to shrink over the next decade, competition for this coveted patient group will heat up. Practices who deliver a premium customer experience, especially pertaining to practice atmosphere, interactions, convenience, and payment affordability, will likely win within this patient group.

If you are the lowest cost option in your area, you need to offset your lower fees by minimizing appointments and emergencies so you can handle the increased volume by expanding your capacity. Additionally, even though your overall fee is the lowest, you need to make sure you are also the most affordable regarding your minimum down payments and monthly payment amounts. For example, if your overall fee is $4200 but your minimum down payment is $1200, your are immediately cutting out over half of the prospective patient population.

If you are the highest cost option in your area, you will need to deliver a premium experience if you are demanding a premium price. The good news is many consumers today are willing to pay a premium for a superior experience. However, they want to be WOWed from their first interaction with your practice through their last. When evaluating your practice’s Patient Experience, please review our Optimizing Your Customer Experience post for some key areas to review on your customer journey map. Additionally, by offering more affordable minimum down payments and monthly payment amounts (aka extended payments), your premium fees can fit the budgets of more area households. OrthoCatapult® has made this extremely easy to do with our OrthoAccept™ tool. In fact, you can even collect interest on your extended payment options while doing so. See it in action and help more patients “Start Now”.

If you are neither the lowest or highest cost option in your area, you likely need to approach your business and services very similar to the highest cost option described above. For an average to subpar experience, consumers will focus solely on price; since you are not the lowest cost, you will likely lose that battle or be forced to lower your fees. If you offer a premium experience and more affordable pricing and payment options, you can still compete for the top end patients as long as your practice is viewed as a premium brand in your local area. If there is a major discrepancy between the experience, especially in regards to flexibility, office atmosphere and technology, you will likely lose out to the premium branded practice even though they are the highest cost option.

There are several ways to grow your practice, but you need to make sure your customer experience matches your fee structures compared to your competition.

The OrthoCatapult® Team

Rethinking Treatment Affordability

Total Treatment Fee vs. Minimum Payment Amounts


Offering affordable orthodontic treatment is critical to maximizing practice growth, especially for adult consumers who seldom have orthodontic insurance benefits and families with several children who need to be treated. While being competitive with your overall treatment fee is important, it is far more crucial to have affordable down payments and monthly payment fees.

How Consumers Buy

Take a moment to consider how consumers buy homes and automobiles. Their primary concerns are how much they have to come out of pocket initially for the down payment and how much they need to budget each month for their monthly payments.

In the mortgage industry, the market is significantly influenced by the interest rates each buyer can obtain. When interest rates are low, buyers can afford more expensive homes as long as they have enough to cover the minimum down payment required by the mortgage company (or to avoid PMI). When interest rates are high, buyers limit their search to lower-priced homes to fit the monthly payments into their budget. Similarly, while frugal people love 15-year mortgages for their lower interest rates and overall total interest paid, their higher monthly payments are restricting on budgets. It’s no surprise that a majority of mortgages are 30-year loans which offer significantly lower monthly payments even with higher interest rates.

In the automobile industry, we never see the actual price of the car written on the windshield for passersby to see. Instead, we see the monthly payment amount advertised. If we looked at the actual sticker price on the vehicle, we would likely never look at many of the vehicles we buy or lease currently. This payment affordability model is crucial to expanding the orthodontic market and growing your practice.

How Can We Make Orthodontics More Affordable?

As stated at the top of this post, here at OrthoCatapult®, we believe your overall treatment fees need to be competitively priced; however, that doesn’t mean you cannot be the premium priced practice in your area if you are offering a premium experience. That said, if you are not offering low minimum down payments and low monthly payment options, you are stifling your growth. This is a rare case where you “can have your cake and eat it too” as long as you are willing to accept slightly more risk and offer extended payment options to your patients. For example, a $6280 18-month treatment plan with a $1500 insurance benefit can be “expensive” or very affordable as shown below:

18-Month Comprehensive Treatment Plan: $6280 

Typical Payment Plan

0% Interest Treatment Length Payment Plan (18 Months)

  • $1500 Insurance (Paid To Practice)
  • $500 Down Payment
  • $237.78/Month x 18 Months
  • $0 Interest Paid                             
  • $6280.00 Total Payments

Extended Payment Scenarios

0% Interest Extended Payment Plan (21 Months)

  • $1500 Insurance (Paid To Practice)
  • $500 Down Payment
  • $203.81/Month x 21 Months (0%)
  • $0 Total Interest Paid                         
  • $6280.00 Total Payments

2.9% Interest Extended Payment Plan (24 Months)

  • $1500 Insurance (Paid To Practice)
  • $500 Down Payment
  • $183.77/Month x 24 Months (2.9%)
  • $130.49 Total Interest Paid                
  • $6410.49 Total Payments 

5.9% Interest Extended Payment Plan (27 Months)

  • $1500 Insurance (Paid To Practice)
  • $500 Down Payment
  • $169.66/Month x 27 Months (5.9%)
  • $300.87 Total Interest Paid                
  • $6580.87 Total Payments

8.9% Interest Extended Payment Plan (30 Months)

  • $1500 Insurance (Paid To Practice)
  • $500 Down Payment
  • $159.65/Month x 30 Months (8.9%)
  • $509.58 Total Interest Paid                
  • $6789.58 Total Payments

If you offered all the above options to 100 patients, how many do you think would choose an extended payment option? How many would actually prefer the 27 Month (5.9% interest) or 30-Month (8.9% interest) payment plans? If we eliminated the frugal families with financial means to pay-in-full in order to receive a 5% – 8% discount, how does that impact your answers?

Understandably, presenting 5 payment plans is not practical or advised; however, for all the scenarios above, you can easily present them, including pay-in-full, with OrthoAccept™, the best orthodontic payment calculator on the market, and allow the patient to pick their ideal plan within your payment parameters. You simply set the guardrails for each patient group, risk category, treatment option and treatment length in your OrthoCatapult settings and OrthoAccept does the rest automatically for you. In-office or at-home, it works wonders in allowing patients to “Start Now!” Click Here to see it in action.

The bottom line is when down payments and monthly payments are affordable, more patients can say yes to treatment and recommend your practice to friends and family members.

 

The OrthoCatapult®  Team

Low-Cost, “Limited” Orthodontic Treatment: Are You In or Out?

As we have discussed in previous posts, many orthodontic practices stifle their growth by having the reigns too tight on their minimum down payments and monthly payment fees. Worse yet, the high initial and monthly costs associated with orthodontics have created the perfect environment for low-cost, at-home treatment to gain a foothold, such as Smile Direct Club, Candid Co. and dozens of others that have appeared over the last few years. With the orthodontic industry’s attractive margins, venture capital will continue to flow into these low-cost, at-home treatment firms. Those companies continue to invest significant money into advertising and digital scan centers (brick & mortar and mobile) that continue to drive consumer demand and improve the patient experience. With Smile Direct Club receiving a $1 Billion valuation earlier this month, we think it is a safe bet that low-cost, at-home treatments services are here to stay – at least as long as this market demand is not being filled by traditional orthodontic practices. Which brings us to an important question for your practice, “Do you want to compete for these patients?”

If you’re fine with relinquishing all adult, low-cost, limited treatments to these at-home treatment services or your local competitors, feel free to skip the rest of this article. On the other hand, if you want to take ownership of all the orthodontics in your area, including adult limited treatments, please read on.


Disclaimer: The OrthoCatapult® team and Practice Catapult LLC do not promote offering limited treatment to adolescents or teenagers. Likewise, we do not promote offering limited treatment to adult patients who clinically require comprehensive treatment. We agree strongly with the professional oath, “Do No Harm”. As the orthodontic specialist, that determination is your responsibility. However, for adult patients who qualify for limited treatment, we encourage you to present both Comprehensive and Limited treatment plans. The following suggestions are regarding those instances.


Always Assume You’re the 2nd Consultation for Adult Patients

Your adult new patient exams (NPE) are comparing your treatment plans and fees to Smile Direct Club, Candid Co. and others. This includes prospective patients who are completely new to your practice as well as the parents of children you are currently treating. If you aren’t hearing it already, you’re simply not asking. Smile Direct Club will spend 3x more on marketing in 2019 than the best known orthodontic brand, Invisalign®.

Competing with At-Home Treatment

Adult consumers are attracted to at-home orthodontic treatment options for two main reasons: Cost & Convenience.

Cost

Let’s address the elephant in the room: orthodontics is expensive for most American households. Is it worth it? Absolutely. Those of us working in the profession understand the impact properly aligned teeth have on patient’s long-term dental expenses, overall health and self-esteem. However, 99.9% of consumers think of orthodontics as an elective procedure to simply improve their smile. Their value of orthodontics is almost exclusively based on self-esteem and appearance.  That’s why we see more adults seeking orthodontics after ending a long-term relationship, after being laid-off (especially white collar professionals), or with an upcoming life milestone (wedding, graduations, reunions, etc.).

Do you think most adult consumers are willing to spend $5000-$7000 to fix a malocclusion that they view as a single-tooth aesthetic problem?

When uncovering an adult patient’s chief concern, how often do you hear about a single tooth in photos? Do you think most adult consumers are willing to spend $5000-$7000 to fix a malocclusion that they view as a single-tooth aesthetic problem? The at-home treatment services are targeting these exact consumers to address their specific concerns at a price point that is palatable to them. Smile Direct Club currently costs $1850 (Pay-in-Full) or $250 Down and $80/month for 24 months (Retainers are $99/set). An orthodontist should sell “limited” treatment at a premium compared to at-home treatment services; however, the price point and payment options need to remain attractive. For these consumers, you are selling the value of seeing the orthodontist, but that premium price likely shouldn’t exceed a 50-60% premium to stay competitive ($2800-$3200). Additionally, consider the following flexible payment options as payment guidelines to compete for these consumers:

  • Down Payment: $250
  • Extended Payment Plan: 24 months
    • 0% Interest: $105 to $122 per month
    • 9.9% Interest: $118 to $136 per month
    • 14.9% Interest: $124 to $143 month

CLICK HERE to see Invisalign® Comprehensive and Limited Treatment Options shown in OrthoAccept.

We know your initial response to the Down Payment suggestion above, will be that a $250 down payment is too low given your aligner lab fee and represents too much risk. However, we recommend you discuss this patient segment with your aligner sales representative as some aligners companies offer 0% extended payment options to help you avoid the cash flow issues associated with a $250 down payment. Also, if you have a patient back out of treatment, an aligner manufacturer that truly wants to partner with you will refund your lab fees (some, understandably, require you to return the unused aligners for refund).  In our experience, most patients who default, do so in the first 6 months, so extended payments after the treatment is finished have not been an issue. Additionally, when monthly payments are affordable, the vast majority of patients make their payments, even those in higher risk categories.

Convenience

Modern consumers expect and demand convenience. As a society, we have grown accustomed to efficiencies thanks to modern technology and disruptive innovators such as Amazon, Uber & Apple. Amazon Prime has now conditioned us to expect every online order to arrive at our doorstep within 2 business days. Uber allows us to digitally hail a ride in a cleaner vehicle and at a lower price than traditional taxis.  Apple completely changed the way we buy and consume both music and movies.  Today’s adult consumers expect ease and hate waiting, including any time spent in waiting rooms. At-home treatment meets those expectations, but at the cost of clinical scope and actual doctor oversight of treatment!

When offering limited treatment, you need to focus on aligner treatment with dramatically reduced appointment intervals. Braces require too many visits with wire changes and emergencies to make it profitable at a lower price. The best protocol we have seen is the four-visit aligner treatment plan:

  1. Initial Delivery Appointment (45 Minutes): Bond attachments, hand out the entire set of aligners & provide thorough patient education.
  2. Refinement Scan Appointment (20 Minutes): Refinement Scan at the end of the active series. Hand out passive aligners or temporary retainer
  3. Refinement Delivery & IPR Appointment (45 Minutes): Change any necessary attachments. Perform any IPR. Hand out entire refinement series of aligners.
  4. Debond Appointment (45 Minutes): Remove all attachments. Bond fixed retainers and/or deliver removable retainers.

With this appointment plan, the practice is making $700-800 in production per visit. Even when considering the higher lab bill for a comprehensive aligner order (Reminder: We do not recommend using “Express”, “Lite” or “Limited” aligner products), your resulting profit per visit after removing the overhead on these cases is nearly double the average profit per visit with braces.


Are You In or Out?

As stated earlier, offering a low-cost, limited treatment option to your qualifying adult prospective patients is a choice you need to make for your practice. If you don’t, just accept that many of these adult consumers will start treatment with one of your local competitors or with an At-Home treatment service that are offering them an affordable “limited” treatment option. Either way, you own your practice’s philosophy and growth objectives.

 

The OrthoCatapult® Team

Pending Patient Follow-Up: Plugging Your Practice’s Leaky Bucket

Successful sales professionals understand the importance of consistent, continued follow-up with all prospective clients. The sales industry has tracked sales conversion for decades and the statistics below show exactly how important effective follow-up is to closing a sale.

  • Only 2% of sales are made on the 1st contact
  • Only 3% of sales are made on the 2nd contact
  • Only 5% of sales are made on the 3rd contact
  • Only 10% of sales are made on the 4th contact
  • 80% of sales are made between the 5th to 12th contact

Unfortunately, pending patient follow-up in the orthodontic industry falls extremely short when considering these statistics. The OrthoCatapult® team anonymously surveyed 157 treatment coordinators (TC) and found that 89.2% of them only follow-up with pending patients 1-2 times following the New Patient Exam (NPE).† Unfortunately, that wasn’t the worst of it; 7.0% of the TCs acknowledged they never follow-up with patients after the NPE. In fact, only 2.5% of surveyed Treatment Coordinators claimed they consistently follow-up with prospective patients 4+ times before quitting on the lead.

89.2% of TCs only follow-up with pending patients 1-2 times following the NPE and 7.0% never follow-up with patients

Take a moment to absorb these findings. Clearly this is a large contributing factor in why actual close rate percentages for the orthodontic industry averages <50% for actual sales opportunities (all non-adult and adult prospective patients who are ready for treatment and receive a financial presentation).

Let us be clear; we are not throwing the treatment coordinators under the bus here. The typical practice does not provide adequate systems or time for a TC to effectively follow-up with each prospective patient 7 times within 90 days of their NPEs. Traditional follow-up processes are extremely inefficient. Typing engaging letters or emails and leaving voicemails are all very time consuming. On average, the treatment coordinators surveyed stated they had only 15-20 minutes per day to follow-up with pending patients and the average amount of time needed for a single follow-up was 5 minutes. That equates to  only 3-4 follow-ups per day on average. If a TC has 8 NPE per day, then they should be following up with 24 patients per day to reach 7 follow-ups with each patient by 90 days on a rolling calendar. This would take two hours per day using their current systems! It’s no wonder why follow-up is so bad compared to sales industry standards.

Re-Imagined Pending Patient Follow-Up

Now re-imagine the follow-up process. Envision a system that automatically tracks each NPE and prompts the treatment coordinator when they need to follow-up on a proven schedule that is effective, yet not overwhelming or annoying for prospective patients. The system also communicates with the patient in their preferred communication method of email or text with customized templates so each message is unique and well received. Best yet, the system allows the treatment coordinator to follow-up with 24 patients in as little as 3 minutes each workday. Sounds too good to be true, right? It’s not. It’s OrthoMessenger®, a key component of the OrthoCatapult® system and a major reason why OrthoCatapult clients see over 30% growth in pending starts within 6 months of using OrthoCatapult.

Better Return on Investment than Marketing

If you are currently looking to invest in marketing to feed more NPE into the top of the funnel, please do yourself a favor and think about plugging some of the holes in your practice’s leaky bucket first. We are confident your return on investment will be dramatically better, in fact, we guarantee it with our money-back OrthoCatapult Performance Guarantee. Ask any marketing agency to guarantee their marketing campaign’s results!

The OrthoCatapult® Team

Survey Notes: Treatment Coordinators surveyed were non-OrthoCatapult users. Survey responses were gathered July-December 2018. Of the 600 US Treatment Coordinators surveyed, 157 Treatment Coordinators responded.

Rethinking Minimum Down Payments

It shouldn’t be news that Americans, in general, are horrible at saving money. However, a high percentage of orthodontic practices still require significant down payments and it’s stifling their growth. If your practice requires down payments of $500 or more, you owe it to yourself and your practice to re-evaluate your minimum requirements. Below are the results of surveys from the past several years, showing just how bad the financial issues are for most American households:

The Pew Charitable Trust Brief

On November 18, 2015, the Pew Charitable Trust published a brief, “What Resources Do Families Have for Financial Emergencies?”, which highlighted the financial situation of 7,845 US respondents. The findings were striking. Here are three that really jumped out to us:

  • 33% of American families have no savings, including 10% of respondents with more than $100,000 annual income.
  • Typical households with more than $85,000 annual income can only replace 40 days of income from savings.
  • 80 percent of respondents have less savings than they thought similar households should have.

MagnifyMoney Survey

On December 28, 2015, MagnifyMoney published their results of their nationwide, only survey of US adults between December 24-26, 2015. The results, calculated by the 532 responsdents, were concerning; especially the fact that 48.6% of respondents had less than $500 available in their checking and savings accounts combined. Here are some the survey results in more detail:

No Spending Plan or Budgets

  • 50.7% set no budget. Instead, they “just spent.”
  • 34.2% set a budget and followed the budget.
  • 15.1% set a budget, but ignored the budget and spent more.

A Majority of Americans are “Broke”

  • 24.8% have less than $100 in their accounts.
  • 23.8% have between $101 and $500 in their accounts.
  • 7.7% have between $501 and $1,000 in their accounts.
  • 16.4% have between $1,001 and $5,000 in their accounts.
  • 27.3% have more than $5,000 in their accounts.

Federal Reserve Board Data

According to the Federal Reserve Board in 2018, only 40% of Americans have access to $400 in emergency funds. “The finding that four-in-ten adults couldn’t cover an unexpected $400 expense without selling something or borrowing money is troubling,” said Greg McBride, chief financial analyst at Bankrate.com. “Nothing is more fundamental to achieving financial stability than having savings that can be drawn upon when the unexpected occurs.”

Bankrate Financial Security Index

According to Bankrate’s Financial Security Index from June 2018, 63% of American’s can cover 5 months of expenses or less from emergency savings.


Are Your Minimum Down Payments Limiting Your Practice Growth?

The moral of this story is Americans are horrendous savers and if you want exponential growth in your orthodontic practice, you need to meet these families where they are at.

Over the past several years, the orthodontic industry’s consultants have almost universally recommended presenting financial plans with a maximum of $500 Down Payment and $200/month or less. Given the data listed above, we agree 100% with those maximum guidelines for orthodontic practices that are looking to grow significantly. However, to help offset some of the cash flow issues that can occur, especially with higher aligner lab fees, we also encourage practices to entertain increasing their Pay-In-Full discount to 6-8% and offer a 50% Down Payment discount of 3-4% to help encourage larger down payments from families with the financial means to do so. By increasing the number of Pay-In-Full and large down payment starts, practices can offset cash flow issues proactively when offering low down payments and extended payments to all your patients.

OrthoCatapult® users can easily set the discounts for Pay-In-Full and  Large Down Payment Discounts for each practice location. Additionally, OrthoCatapult allows orthodontists to set the maximum extended payment terms, including the number of extended months and progressive interest rates they want to offer to each responsible party Risk Category (A /B/C) for each patient group, treatment length and treatment modality offered. Making the complex, extremely easy!

The OrthoCatapult® Team

Optimize Your Customer Experience

As the orthodontic industry becomes more competitive each year, it is crucial for every independent orthodontist to become an excellent business owner and leader in order for the practice to thrive let alone survive. Being a great clinician is no longer enough. Beating Dental Service Organizations (DSOs) and At-Home Treatments on price is simply not feasible; however, your premium price still needs to be affordable when it comes to down payments and monthly payment affordability. That said, you cannot charge a premium price without providing a premium experience. Unfortunately, many orthodontists do not understand what today’s consumers are looking for in an optimal experience. This post will highlight several key areas you need to evaluate when mapping your customers’ journey to make sure your fees and experience are in sync with one another.

 


  • ONLINE PRESENCE
    • Practice Website
      • Custom Content – Not Generic
      • Responsive Design for Mobile
      • Online scheduling
    • Social Media authentic engagement
  • PATIENT INTERACTIONS
    • Communications
      • Pre New Patient Exam (NPE)
        • NPE Appointment Summary & Online Health History Forms
        • NPE Appointment Reminder and Appointment Summary (Email)
        • Doctor Introductory Video Message (Text/Email)
      • Post NPE Follow-Up
        • New Patient Digital Welcome Kit (Sent to New Starts)
        • “Pending” Patient Follow-Up Campaigns (OrthoMessenger® is the GOAT at this)
      • Appointment Scheduling
    • In-Person Interactions
      • Appointments
        • Minimal Visits
        • Short Appointments
        • On Schedule – No Wait Times
        • Convenient Office Hours
      • Practice Atmosphere
        • Upscale Décor
        • Positive Energy
        • Technology On Display
          • Digital Scans & X-Rays
          • CBCT
        • Financial Plans (OrthoAccept™ is the perfect solution here)
          • Flexibility
          • Affordability
          • Convenience

While the list above is not exhaustive, it is adequate to help you kick off a Customer Journey Map exercise in your practice. Remember the goal is to exceed, not meet, customers’ expectations if you are a premium priced practice.

The OrthoCatapult® Team