In this Ortho Marketing episode, Dean Steinman is joined by Carl Stoddard, President of Doctors CFO. They discuss how your pricing strategy could be holding your practice back. They dive into the true cost of undercharging, how to evaluate your current pricing, and proven strategies to increase profitability without sacrificing patient satisfaction. If you're looking to boost your bottom line, this is an episode you won't want to miss.
Ready to elevate your practice? Contact us!
https://orthomarketing.com/contact-us/
About Carl Stoddard
Carl Stoddard is an accomplished senior executive, board member, and the President of Doctors CFO, with over 20 years of success across medical, financial, insurance, technology, and software industries. His expertise in corporate finance, financial analysis, and strategic planning has made him a trusted advisor to companies navigating profit and loss management, business model development, and accounting system implementation. Since founding Doctors CFO in 2009, Carl has specialized in providing financial guidance to physician-owned practices, helping clients achieve stability, growth, and expansion in both single-practice and multi-practice settings. His extensive experience in business development, budgeting, and financial planning positions him as a key resource for healthcare professionals seeking sustainable success. Carl holds a Bachelor’s degree in Accounting from Idaho State University and an MBA from Arizona State University. A Certified QuickBooks Advanced Online ProAdvisor with Diamond Status, he is committed to professional development and has gained significant experience in board leadership throughout his career. Outside of his professional life, Carl enjoys spending time with his wife, Stacey, their five children, and three dogs. An avid audiobook listener and music enthusiast, he values creative outlets as a way to relax and recharge.
Ready to elevate your practice? Contact us!
https://orthomarketing.com/contact-us/
About Carl Stoddard
Carl Stoddard is an accomplished senior executive, board member, and the President of Doctors CFO, with over 20 years of success across medical, financial, insurance, technology, and software industries. His expertise in corporate finance, financial analysis, and strategic planning has made him a trusted advisor to companies navigating profit and loss management, business model development, and accounting system implementation. Since founding Doctors CFO in 2009, Carl has specialized in providing financial guidance to physician-owned practices, helping clients achieve stability, growth, and expansion in both single-practice and multi-practice settings. His extensive experience in business development, budgeting, and financial planning positions him as a key resource for healthcare professionals seeking sustainable success. Carl holds a Bachelor’s degree in Accounting from Idaho State University and an MBA from Arizona State University. A Certified QuickBooks Advanced Online ProAdvisor with Diamond Status, he is committed to professional development and has gained significant experience in board leadership throughout his career. Outside of his professional life, Carl enjoys spending time with his wife, Stacey, their five children, and three dogs. An avid audiobook listener and music enthusiast, he values creative outlets as a way to relax and recharge.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hi, I'm Carl's daughter, doctor CFO. Today in this podcast,
we're going to talk about pricing and profits and some
ideas on how to move you into a higher pricing
model and some simple things that you can do to
increase your profit.
Speaker 2 (00:14):
Today orthomarketing dot com three hundred and sixty degree digital
marketing solutions for your practice.
Speaker 3 (00:28):
Well, everybody out there on podcast land, it's Dean Steinmann
and guess what. We are back with another podcast for
guess who you and where. It's now almost March already.
If you could believe that twenty twenty five springs right
around the corner. I can't wait. It's been a long, cold,
(00:50):
lonely winner, as the Beatles said, so now it's time
to hopefully spring will come soon and with that comes
turnal optimism, baseball, nice weather. So all good. And you
know we're also now gonna talk a little bit about
bottom line and pricing via practice. And I've got a
special guest with me today who is going to going
(01:11):
to go over you know, different ways to position your
practice and how and how to price it there. And
I've got call started with me. Carlo is the founder
of doctor CFO and Carl welcome man. How are you
doing today.
Speaker 4 (01:25):
I'm doing fantastic.
Speaker 1 (01:26):
Thanks so much for having me on your show, Dan,
I really appreciate appreciate it.
Speaker 4 (01:29):
My pleasure.
Speaker 3 (01:30):
So let's back up. Tell us a little bit about Carl.
What's who you are and what you do?
Speaker 1 (01:37):
Okay, Well, I found a doctor CFO back in two
thousand and ninety ten. Basically what we are as a
fractional CFO service for doctors and Dennis. Maybe a little
bit before that, I was doing a similar type of
business for actually a big, you know, fortune five hundred
semiconductor company, and I just thought that what we do
(01:59):
there would have value in the doctor dentist world as well,
and so I started doing on the side and then
it kind of turned into a full time thing. So
I have an accounting degree from Ido State University. I
have an NBA from Arizona State University. I also have
a lot of music education in my background, so you'll
(02:19):
see a lot of the stuff I do. Maybe it's
a little bit different or creative. I would say that's
because of the music the musician in me. So I'd
love to do that full time, but you know, it's
hard to make.
Speaker 3 (02:32):
You know, Unfortunately, I can't carry a tune, but I
would love to. You know, I'm playing I been playing
music my whole life, and I'm tone deaf. I can't
sing for anything, but I would love to. You know,
nothing better than a couple of bourbons and getting up
in karaoke. So you know that's I love that. So
let's kind of jump into it. So for a practice,
(02:55):
but you know, if the don't practice, what is there
is basically the right way for them to figure out
how to price themselves for their services.
Speaker 1 (03:05):
Well, it kind of depends. So like if you're so,
dental is interesting for a couple of reasons. Number one
is if they accept insurance, then the price is pretty
much already set for them, right, so it's not a
matter of a price on an individual line item, So
there's not maybe not a lot of negotiation in that.
(03:28):
Especially if you're like a pediatric dental place, then you're
you're getting the rate that they decide to give you
in the state, that's the rate you're getting. And then
there's a lot of auditing as well, so they kind
of do what's called the chart audit, and so you're
kind of limited in what you can do, okay, and
so now if we go to more general dentistry, then they.
Speaker 4 (03:50):
Have a little bit more flexibility.
Speaker 1 (03:51):
So I would say, one thing that's a little bit
different between a dentist and say a doctor, is a
dentist sells more than a doctor.
Speaker 4 (03:58):
Right now, I think that's going to change.
Speaker 1 (04:00):
But at the moment, a dentist is selling because they
you know, the person that they're working with may have
an insurance package that says, okay, we'll give you two
thousand dollars a year per person, but most dental stuff
costs a lot more than two thousand dollars a year. Right,
You get a couple, a couple of crowns, maybe a
couple implants like you're going to be way more than that,
(04:21):
and as you get older, your teeth start falling apart,
and so you need more and more of that kind
of stuff done.
Speaker 4 (04:27):
Right.
Speaker 1 (04:27):
So, I think that the way that the dentists really
a prices themselves is.
Speaker 4 (04:33):
By by offering more and more services.
Speaker 1 (04:39):
Okay, okay, maybe not necessarily the price on a specific thing,
but they offer more and more services to that to
that particular patient. Now you see within this world, you
see some dentists go into it like a pure cosmetic thing.
Speaker 4 (04:54):
So I haven't got plenty right now, he does huge cases.
Speaker 1 (04:56):
He might do you know that in the different quadrants,
and it might cost four thousand dollars or fifty thousand
dollars to get your whole mouth redone.
Speaker 4 (05:04):
Right, Not everybody can afford that.
Speaker 1 (05:07):
Not everybody wants to afford that, I would say in
his business though, there's a lot of risk on.
Speaker 4 (05:11):
The cost side as well.
Speaker 1 (05:12):
So, but the cosmetic dentistry, if you want to be
a pure pricing person, it would have to be in
the cosmetic dentistry world. But then there's but then dentistry
kind of reminds me a lot of like this spaw environment.
Because people get fillers like boattox and that kind of stuff.
There is kind of a market price. So if somebody
(05:34):
wants to get botox, they're going to go and look
at what everybody else charges for boatox. So it's hard
to charge more for that particular boatox item. So the
way you differentiate, you can might could charge a little
bit more. Like if you're a both a dermatologist doing botox,
you could charge a little bit more. Right, So if
you're a dentist that has upgraded their client tele and
(05:58):
can move into cash pricing. That would be that would
be a way to do it. So you're so, I
have a thought for you. Just a second, I'm gonna
pull something up here. I think this will kind of
answer your question more generally. I don't know if I'm
allowed to share on my screen, but.
Speaker 3 (06:14):
It's available on here. If not, we could always put
a link up afterwards.
Speaker 4 (06:18):
Okay.
Speaker 1 (06:19):
So basically we have this little model, okay, And so
I'm gonna use my hands to visualize, so when a
dentist starts out, they might see they'll just take like
your brand new dentists.
Speaker 4 (06:29):
You're just gonna take.
Speaker 1 (06:30):
Whoever, right, You're just gonna take whoever. So you're gonna
take the insurance patients. You're gonna take the government insurance patients.
They don't pay very well. Well, hopefully over time you
need to you need to start filling your schedule with
let you know you first you get your schedule full,
and then the second phase would be Okay, now we're
going to replace.
Speaker 4 (06:49):
Our bad payers with our better payers.
Speaker 1 (06:52):
So like we're gonna replace our government insurance, Medicare and
Medicaid with you know, the blue crosses, the you know
the better, the better insurance in there. Okay, So within
insurres they're not all created equal. So then you want
to start replacing the poorer insurans with the better insurers.
And then eventually you want to move in from from
(07:13):
to self pay. Once you move into the self paid world,
now you have a lot more control over your pricing.
Speaker 4 (07:20):
Okay, and you have the ability to price differently.
Speaker 3 (07:24):
But what do you do there? Do you like, you know, say,
for example, just use basic you know, aligners and visalign
what have you? And a authodor store or a dentist
is now offering aligners. Really just feel like a dart
against the wall to find like how much to charge?
Do they try to you know, do they do market research?
Like what would you suggest somebody to do?
Speaker 4 (07:44):
In order?
Speaker 1 (07:45):
They do market research in their area. So they need
to have somebody maybe be a silent shopper. They need
to go find out, you know, maybe their top four
or five competitors in their area find out. Now, these
guys might even share their price if you're friends with them, right,
they might say, yeah, I'm offering this service. And if
you're far enough away from that person, say an hour
or two, if you're in a group, they're going to
share their prices. So if you're part of a group
(08:07):
that talks, they'll share their prices. And so you should
be able to get those prices by talking to people
in the group to kind of get you know, with
the high rate and maybe the middle rate and the
low rate is and then but it's more than just
the price, right, It's like, well, what do you like
to get that price with? How do you differentiate yourself
to deserve more of the price. So so in this
(08:30):
little in this little thing that we have, when you're
kind of the high end price, you need to you know,
everybody needs.
Speaker 4 (08:39):
To look the part.
Speaker 1 (08:40):
So like if I go into like a Walmart, let's say,
and I'm going to buy a bicycle, I don't expect
the person anybody in Walmart to be able to tell
me about that bicycle, right, But if I go into
the bike store, I expect everybody in that bike store
to at least be a little bit smart about the
bicycles all the right. So when I go into a
(09:02):
dental practice or orthopractice I and it's a high end one, right,
I'm going to expect everybody to look the part. And
I'm going to expect everybody to be knowledgeable about all
of the major services that they offer. And the reason
why they need to be knowledgeable is because they're actually
part of the sales process. They're actually helping either set
(09:23):
up the sell or close the cell. Right, they're either
going to set it up or they're going to close it.
But you go to a lot of offices, and this
is the problem with turnover, where you get somebody that's new,
they're not going to help set up or close the cell, right, Okay,
So it's it's it's really salesmanship is how you increase
your price, I think, and how you set the mood
(09:47):
of going after higher, higher end clients.
Speaker 4 (09:50):
Okay.
Speaker 1 (09:50):
So when you start going after highering clients, it's like
the marketing to hire end clients is so different than
lower end clients because it's more directed because where do
they shop, where do they eat.
Speaker 4 (10:05):
Who are their friends? What do they do? Right?
Speaker 1 (10:09):
So you need to get into that that venue with
those people. And so if you're saying, Okay, I'm a dentist,
I can see two thousand patients and I want to
move into this high end, Okay, then you need to
find out where those two thousand patients are and you
need to slowly start building your clientele for those two
thousand patients and they have friends, you can do referrals,
(10:30):
but I think, you know, before you start changing your prices,
you kind of got to like set your clientele up.
And then the other thing too is you got to
do like a lot of you got to like, you know,
I'm going to go back to a music analogy. You
can't just be like an ordinary pianist. You got to
be a fantastic pianist.
Speaker 4 (10:48):
Right.
Speaker 1 (10:48):
So if you're a dentist, it's not just an ordinary dentist.
You got to be the best dentist, right the Michelangelo,
if you will, of a dentist free And so if
you're that good and people will see the difference, they
will pay you whatever price they want, you know, because
you're moving into a higher and higher end, a higher
(11:10):
and higher end clientele all the time. So that's kind
of the goal. Not every dentist is going to be
able to do it. It's just going to be one
or two in a market that's going to capture that
high end.
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(11:41):
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Speaker 4 (12:00):
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Speaker 3 (12:25):
So if you give somebody advice and they're starting, you
know they're moving into a new area of new practice,
and you get to compare apples and apples, not apples
and oranges. So say they're offering.
Speaker 4 (12:36):
You know, in Visiligne.
Speaker 3 (12:39):
Aligners, would you consult with somebody and would you have
them come in at the lower end, the middle or
the high end as their pricing. Say, they do the
research and they see somebody in the market's on there
for four thousand, somebody's on there for seven thousand. Where
would you tell them as a new practice to come in.
Speaker 4 (12:58):
Okay, that's a really good question.
Speaker 1 (13:00):
And so so I actually had a guy ask me
this question a few years back. Okay, Now he happens
to have a couple pediatric medicaid dental practices and so
he's making money from those, and he says, Carl, I
kind of maybe want to do something different, like a
cash only practice and only go after the high end.
How would I approach that? And I gave him an
(13:21):
approach for that. So, if you just want to go
straight into the high end, it's going to be a
slower process. I think it's long term a better process.
But but you're gonna have to have some savings to
do that, right. Otherwise, if you don't have money and
you don't have savings, then you're gonna have to kind
(13:41):
of chase like everybody else. So then you're gonna have,
you're gonna have to pay, You're gonna have to price
yourself competitively. To be honest with you, and then as
you get more experienced, then you can start kind of
weeding out your your bad payers with your better payers
and move up. And that might be a five or
ten year process, depending on how good a marketer you
are and how good of of kind of like your
(14:06):
personal brand. If you will you know, I mean to
be honest with you. I mean this gets really this
gets really about the doctor.
Speaker 5 (14:15):
Right.
Speaker 1 (14:15):
The more professional the doctor looks, the more professional they act, uh,
They're going to attract a different client to them and
and be able to charge more. So there's there is
some charisma to this in my opinion, right, I mean
it's it's it's showmanship. And so the person that has
the showmanship we'll be able to get into the market
(14:36):
faster and be able to raise their prices. You see
this with dermatologists all the time. Dentists I don't really
necessarily see them try to to to do this. Now,
there I have found actually an exception to this that
is is unique in the market. So I have found
that sometimes if a dentist moves to like an underprivileged,
(14:56):
underserved area, right, they can be they can do more
with their pricing. If they move to an underserved area.
They there might not be fancy restaurants, there might not
be all that fancy lifestyle stuff. But if they move
to an underserved rest area, they will have demand and
they can charge more. But but that's not top of mind.
(15:18):
I've seen that with the numbers, because sometimes people move
to the LAS think they're going to kill it. There's
so much competition there. It's way harder than you think.
And your staff costs more and your rent costs more,
and so it's harder.
Speaker 4 (15:30):
It's not easier, it's harder.
Speaker 3 (15:31):
Right, all right, So now you know the scenario. So
people are afraid to increase their pricing it's free, they're
going to lose customers or what have you. So what
advice would you give somebody who is apprehensive about increasing
their their costs because you know, people like I don't
want to lose customers, and you know, and they're used
(15:52):
to spending this. So what advice would you give somebody
to embrace the thought that they have no choice but
to the keep.
Speaker 1 (16:01):
Yeah, okay, so we've had we've dealt with this question before,
and so I have put together this pricing tool that
helps people understand if they're making margin.
Speaker 4 (16:11):
On their whatever it is.
Speaker 1 (16:13):
Okay, whatever it is, whether it's an implant, whether it's
the invisil line, whether it's it doesn't matter what it is.
And so in the pricing model you put in, you
you put in your cost, okay, so that there might
be a you know, the cost of the of the implant,
the cost of material, and then you put in the
labor associated if there's a machine involved. We did with
(16:34):
the machine, and it will compute a margin, okay, And
so the margin, and there's something I call it. I
call it a pricing margin. So I'm just going to
use a general number. So let's say that your cost
before you pay a doctor and all that stuff is
fifty percent. Okay, So let's so that'll be our threshold
(16:55):
is fifty percent. And I might say, well, I know
that I need my margin to be at least sixty
maybe seventy percent on each individual item, so that I
have enough to cover that fifty percent, right, So I'm
hoping I'm going to go for a bench mark of
say sixty or seventy percent well, this this pricing model
will help you compute all of the trees, if you will,
in your in your forest, to see if you're actually
(17:17):
making money on those. And so what you'll find is
sometimes you might have one that's forty percent okay, or
thirty percent, and you're doing the market price on that.
So say it's a visil line or whatever, and you're
only making thirty percent on it, okay, Well that that's bad.
And so you got a couple options. You can quit
you in Visiligne in this example, you could raise your price,
(17:40):
but if you raise your price, you might not get
as many okay. Or there's another option where I can take,
say a visil line and something else that I invented
or some other visilign plus okay, and I create a package.
And so maybe a visil line's at thirty percent and
this other thing maybe is at ninety percent, and then
as they average together, I get vision lined up to
(18:02):
say fifty percent, and I can live with that, okay.
So so if you package things together and and and
you're given the customer or the patient more than they
originally asked for, and you've packaged it in a very
unique creative way, I don't know. I don't know exactly
what that is, you know, but that's how you increase
(18:25):
your margin. It's by packaging things together. Okay, you know,
you because the because the market has a price on
in visiligned, but they don't have a price on a
Visilign plus.
Speaker 4 (18:33):
Well what's in visilign plus? I don't know.
Speaker 1 (18:35):
Well, I do all these extra things and that and
it costs us much.
Speaker 4 (18:38):
Okay, smart, And that's.
Speaker 3 (18:40):
How you look and that's you know. Something that we
do in all the market is we come up with
strategies for you too, come to think outside the box
and to differentiate yourself and offer a full smile makeover
instead of just offering one little piece ready to be
to be able to come in and if somebody do
get the fee the lined and then get in whitened
and then do implants of veneers and be able to
charge out twenty thousand dollars versus four thousand and five thousand.
(19:04):
You know.
Speaker 1 (19:04):
So yeah, you know, yeah, it's a complete concept. Now
it's not just in visial line. It's like we're going
to make you look beautiful again right with the teeth.
Speaker 4 (19:13):
And I think.
Speaker 1 (19:13):
People underestimate just the value of the teeth, you know
when they just have those makeover shows and they change
people from you know, had to toe right, but it
was it was I always fold interesting that when they smiled,
like you didn't look at anything else, You only looked
at the smile, right, And that's the power of the smile.
They're not selling they're not selling healthy teeth, They're selling
(19:37):
a smile. They're selling something different, right, exactly.
Speaker 3 (19:41):
It's twenty with the practice. And I go in and
meet with the staff and we trained them. I say,
what business that we en? What business are you win?
And they're like, we're in no business. Worry this, You're
in this file business.
Speaker 4 (19:53):
That's exactly right.
Speaker 3 (19:54):
Your job is to change people's lives. And if you
just walk down the street today, if you're in a
busy you know, if you're in a busy town, busy
area and you just look at somebody and just walking
towards you, and if they're smiling and feeling better about themselves,
you feel better about that person. You even know who
they are. You just smile back because you see them happen.
So the more that somebody smiles, the more better they
feel about themselves more and the better other people feel
(20:14):
about them, you know, so you so think outside the box. Guys.
I called one last bit. So if you give somebody
who's listening to this one bit of advice is something
to do today in order to potentially be more profitable
or be able to increase that pricing. What would you
suggest they do today internally that can make a little
bit of a difference for them.
Speaker 1 (20:35):
Well, I think the thing that they could do today
is they need to price their I mean they need
to go through like I mean I have obviously I
have a pricing model they can use. But to be
honest with you, if you go through the pricing model
and you put in your top five or ten sellers,
you will know if you're profitable on.
Speaker 4 (20:55):
Each one of those items.
Speaker 1 (20:56):
Okay, so you need to know if you're profitable on
your main items because you might find out. Like in dental,
this might not be so obvious, but let's say that
you have a hygenis doing the work. When you're going
to have an assistant doing the work, your price is
going to be the same, but your costs are surely.
Speaker 4 (21:13):
Going to be different, right, because you're not Annigenois.
Speaker 1 (21:16):
Right, So if you can get somebody to do the
work that doesn't cost as much. That's a way to
increase your profitability as well. And let me add one
more thing, because we're seeing this a lot, and so
I'm going to kind of change it just to teeny bit.
So I guess, to be honest with you, the one
thing I'd probably do today is I would to increase profitability.
As I would I would start replacing staff with technology
(21:39):
as much as possible and think about what do I
really need to do to get this delivered, and how
can I use technology to help me deliver the product
and service. Because staff is just going to get more
and more expensive. There's probably going to be less people
to work in the future just because of the birth
rates and all that kind of stuff. Technology, you're going
(22:01):
to have to embrace technology and figure out how to
leverage it.
Speaker 4 (22:07):
You know, we have a small staff.
Speaker 1 (22:08):
I only have like three or four people, but we
do two or three times the work that we did
a few years ago just because we're using technology to
help us so much.
Speaker 4 (22:17):
So I would say, use.
Speaker 1 (22:18):
Figure out a way to use technology in your practice
before hiring someone.
Speaker 4 (22:23):
That's a great way to save money.
Speaker 3 (22:25):
Awesome, great, great tip. So well, thanks so much for joining.
And I've got two more questions for you. One one
question is I'm going to give you a gift. I'm
going to give you the ability to have dinner with
anybody in history.
Speaker 1 (22:41):
Okay, who you're meeting? All right, that's a good question. Religiously,
I might choose the Savior. If I was going to
be non religious, Well, that's a tough question.
Speaker 4 (22:53):
I might choose. Well, that's a good, good question.
Speaker 1 (22:57):
I mean, my gut tells me I want to talk
to Beto in our box or something.
Speaker 3 (23:02):
If you're gonna say music before so okay, they told
wal be kind of tough considering news death there, so
you have to learn sign language from there.
Speaker 4 (23:12):
Let's go with back.
Speaker 1 (23:13):
I think he was a great composer ever, so uh,
there you go.
Speaker 4 (23:17):
Good.
Speaker 3 (23:18):
And where you're gonna go?
Speaker 4 (23:20):
Where are we going to go?
Speaker 1 (23:21):
Probably the best take place we can find, all.
Speaker 3 (23:26):
Right, Carl. And if somebody wants to learn more, talk
to you, learn about how you can help them. What's
the best way for somebody to reach you?
Speaker 4 (23:33):
A couple of ways.
Speaker 1 (23:34):
One is obviously our website www dot d R c
f O dot com, or you can email me at
Carl C. Carl to c at d R c f
O dot com and we're happy to talk to you great.
Speaker 3 (23:48):
Thanks so much. I appreciate it.
Speaker 4 (23:50):
Guys.
Speaker 3 (23:50):
You have to know your numbers, plain as simple. Everybody
watches Shark Tank. First thing I say is you know
your numbers, and everybody's watched Shark Tank. So you have
to know what it is and how much it costs
and realize to it, adapt to technology, adapt to change,
and you know, figure out a differentiator. And if you
could position yourself the right way in the market, you
can charge more, plain and simple. Somebody, you know, why
(24:11):
did somebody go into a portion dealership and drop one
hundred and fifty grand when they could get a car
for forty Okay, it's because of the way it's perceived
and the results. So if you could show people that
you have great results and your perception in the market,
you could get more. So Carl, thanks again for joining
to appreciate it. Everybody in podcast land, thanks so much
for listening. Thanks so much for all of your insight
(24:32):
and questions following us on social media. Look forward to
helping you learn more down the road. Everybody out there
and podcast land, thank you so much and don't forget smile, smile, smile,
Bye everybody. Thanks Carl
Speaker 2 (24:51):
WORTHO marketing dot com three hundred and sixty degree digital
marketing solutions for your practice
Hi, I'm Carl's daughter, doctor CFO. Today in this podcast,
we're going to talk about pricing and profits and some
ideas on how to move you into a higher pricing
model and some simple things that you can do to
increase your profit.
Speaker 2 (00:14):
Today orthomarketing dot com three hundred and sixty degree digital
marketing solutions for your practice.
Speaker 3 (00:28):
Well, everybody out there on podcast land, it's Dean Steinmann
and guess what. We are back with another podcast for
guess who you and where. It's now almost March already.
If you could believe that twenty twenty five springs right
around the corner. I can't wait. It's been a long, cold,
(00:50):
lonely winner, as the Beatles said, so now it's time
to hopefully spring will come soon and with that comes
turnal optimism, baseball, nice weather. So all good. And you
know we're also now gonna talk a little bit about
bottom line and pricing via practice. And I've got a
special guest with me today who is going to going
(01:11):
to go over you know, different ways to position your
practice and how and how to price it there. And
I've got call started with me. Carlo is the founder
of doctor CFO and Carl welcome man. How are you
doing today.
Speaker 4 (01:25):
I'm doing fantastic.
Speaker 1 (01:26):
Thanks so much for having me on your show, Dan,
I really appreciate appreciate it.
Speaker 4 (01:29):
My pleasure.
Speaker 3 (01:30):
So let's back up. Tell us a little bit about Carl.
What's who you are and what you do?
Speaker 1 (01:37):
Okay, Well, I found a doctor CFO back in two
thousand and ninety ten. Basically what we are as a
fractional CFO service for doctors and Dennis. Maybe a little
bit before that, I was doing a similar type of
business for actually a big, you know, fortune five hundred
semiconductor company, and I just thought that what we do
(01:59):
there would have value in the doctor dentist world as well,
and so I started doing on the side and then
it kind of turned into a full time thing. So
I have an accounting degree from Ido State University. I
have an NBA from Arizona State University. I also have
a lot of music education in my background, so you'll
(02:19):
see a lot of the stuff I do. Maybe it's
a little bit different or creative. I would say that's
because of the music the musician in me. So I'd
love to do that full time, but you know, it's
hard to make.
Speaker 3 (02:32):
You know, Unfortunately, I can't carry a tune, but I
would love to. You know, I'm playing I been playing
music my whole life, and I'm tone deaf. I can't
sing for anything, but I would love to. You know,
nothing better than a couple of bourbons and getting up
in karaoke. So you know that's I love that. So
let's kind of jump into it. So for a practice,
(02:55):
but you know, if the don't practice, what is there
is basically the right way for them to figure out
how to price themselves for their services.
Speaker 1 (03:05):
Well, it kind of depends. So like if you're so,
dental is interesting for a couple of reasons. Number one
is if they accept insurance, then the price is pretty
much already set for them, right, so it's not a
matter of a price on an individual line item, So
there's not maybe not a lot of negotiation in that.
(03:28):
Especially if you're like a pediatric dental place, then you're
you're getting the rate that they decide to give you
in the state, that's the rate you're getting. And then
there's a lot of auditing as well, so they kind
of do what's called the chart audit, and so you're
kind of limited in what you can do, okay, and
so now if we go to more general dentistry, then they.
Speaker 4 (03:50):
Have a little bit more flexibility.
Speaker 1 (03:51):
So I would say, one thing that's a little bit
different between a dentist and say a doctor, is a
dentist sells more than a doctor.
Speaker 4 (03:58):
Right now, I think that's going to change.
Speaker 1 (04:00):
But at the moment, a dentist is selling because they
you know, the person that they're working with may have
an insurance package that says, okay, we'll give you two
thousand dollars a year per person, but most dental stuff
costs a lot more than two thousand dollars a year. Right,
You get a couple, a couple of crowns, maybe a
couple implants like you're going to be way more than that,
(04:21):
and as you get older, your teeth start falling apart,
and so you need more and more of that kind
of stuff done.
Speaker 4 (04:27):
Right.
Speaker 1 (04:27):
So, I think that the way that the dentists really
a prices themselves is.
Speaker 4 (04:33):
By by offering more and more services.
Speaker 1 (04:39):
Okay, okay, maybe not necessarily the price on a specific thing,
but they offer more and more services to that to
that particular patient. Now you see within this world, you
see some dentists go into it like a pure cosmetic thing.
Speaker 4 (04:54):
So I haven't got plenty right now, he does huge cases.
Speaker 1 (04:56):
He might do you know that in the different quadrants,
and it might cost four thousand dollars or fifty thousand
dollars to get your whole mouth redone.
Speaker 4 (05:04):
Right, Not everybody can afford that.
Speaker 1 (05:07):
Not everybody wants to afford that, I would say in
his business though, there's a lot of risk on.
Speaker 4 (05:11):
The cost side as well.
Speaker 1 (05:12):
So, but the cosmetic dentistry, if you want to be
a pure pricing person, it would have to be in
the cosmetic dentistry world. But then there's but then dentistry
kind of reminds me a lot of like this spaw environment.
Because people get fillers like boattox and that kind of stuff.
There is kind of a market price. So if somebody
(05:34):
wants to get botox, they're going to go and look
at what everybody else charges for boatox. So it's hard
to charge more for that particular boatox item. So the
way you differentiate, you can might could charge a little
bit more. Like if you're a both a dermatologist doing botox,
you could charge a little bit more. Right, So if
you're a dentist that has upgraded their client tele and
(05:58):
can move into cash pricing. That would be that would
be a way to do it. So you're so, I
have a thought for you. Just a second, I'm gonna
pull something up here. I think this will kind of
answer your question more generally. I don't know if I'm
allowed to share on my screen, but.
Speaker 3 (06:14):
It's available on here. If not, we could always put
a link up afterwards.
Speaker 4 (06:18):
Okay.
Speaker 1 (06:19):
So basically we have this little model, okay, And so
I'm gonna use my hands to visualize, so when a
dentist starts out, they might see they'll just take like
your brand new dentists.
Speaker 4 (06:29):
You're just gonna take.
Speaker 1 (06:30):
Whoever, right, You're just gonna take whoever. So you're gonna
take the insurance patients. You're gonna take the government insurance patients.
They don't pay very well. Well, hopefully over time you
need to you need to start filling your schedule with
let you know you first you get your schedule full,
and then the second phase would be Okay, now we're
going to replace.
Speaker 4 (06:49):
Our bad payers with our better payers.
Speaker 1 (06:52):
So like we're gonna replace our government insurance, Medicare and
Medicaid with you know, the blue crosses, the you know
the better, the better insurance in there. Okay, So within
insurres they're not all created equal. So then you want
to start replacing the poorer insurans with the better insurers.
And then eventually you want to move in from from
(07:13):
to self pay. Once you move into the self paid world,
now you have a lot more control over your pricing.
Speaker 4 (07:20):
Okay, and you have the ability to price differently.
Speaker 3 (07:24):
But what do you do there? Do you like, you know, say,
for example, just use basic you know, aligners and visalign
what have you? And a authodor store or a dentist
is now offering aligners. Really just feel like a dart
against the wall to find like how much to charge?
Do they try to you know, do they do market research?
Like what would you suggest somebody to do?
Speaker 4 (07:44):
In order?
Speaker 1 (07:45):
They do market research in their area. So they need
to have somebody maybe be a silent shopper. They need
to go find out, you know, maybe their top four
or five competitors in their area find out. Now, these
guys might even share their price if you're friends with them, right,
they might say, yeah, I'm offering this service. And if
you're far enough away from that person, say an hour
or two, if you're in a group, they're going to
share their prices. So if you're part of a group
(08:07):
that talks, they'll share their prices. And so you should
be able to get those prices by talking to people
in the group to kind of get you know, with
the high rate and maybe the middle rate and the
low rate is and then but it's more than just
the price, right, It's like, well, what do you like
to get that price with? How do you differentiate yourself
to deserve more of the price. So so in this
(08:30):
little in this little thing that we have, when you're
kind of the high end price, you need to you know,
everybody needs.
Speaker 4 (08:39):
To look the part.
Speaker 1 (08:40):
So like if I go into like a Walmart, let's say,
and I'm going to buy a bicycle, I don't expect
the person anybody in Walmart to be able to tell
me about that bicycle, right, But if I go into
the bike store, I expect everybody in that bike store
to at least be a little bit smart about the
bicycles all the right. So when I go into a
(09:02):
dental practice or orthopractice I and it's a high end one, right,
I'm going to expect everybody to look the part. And
I'm going to expect everybody to be knowledgeable about all
of the major services that they offer. And the reason
why they need to be knowledgeable is because they're actually
part of the sales process. They're actually helping either set
(09:23):
up the sell or close the cell. Right, they're either
going to set it up or they're going to close it.
But you go to a lot of offices, and this
is the problem with turnover, where you get somebody that's new,
they're not going to help set up or close the cell, right, Okay,
So it's it's it's really salesmanship is how you increase
your price, I think, and how you set the mood
(09:47):
of going after higher, higher end clients.
Speaker 4 (09:50):
Okay.
Speaker 1 (09:50):
So when you start going after highering clients, it's like
the marketing to hire end clients is so different than
lower end clients because it's more directed because where do
they shop, where do they eat.
Speaker 4 (10:05):
Who are their friends? What do they do? Right?
Speaker 1 (10:09):
So you need to get into that that venue with
those people. And so if you're saying, Okay, I'm a dentist,
I can see two thousand patients and I want to
move into this high end, Okay, then you need to
find out where those two thousand patients are and you
need to slowly start building your clientele for those two
thousand patients and they have friends, you can do referrals,
(10:30):
but I think, you know, before you start changing your prices,
you kind of got to like set your clientele up.
And then the other thing too is you got to
do like a lot of you got to like, you know,
I'm going to go back to a music analogy. You
can't just be like an ordinary pianist. You got to
be a fantastic pianist.
Speaker 4 (10:48):
Right.
Speaker 1 (10:48):
So if you're a dentist, it's not just an ordinary dentist.
You got to be the best dentist, right the Michelangelo,
if you will, of a dentist free And so if
you're that good and people will see the difference, they
will pay you whatever price they want, you know, because
you're moving into a higher and higher end, a higher
(11:10):
and higher end clientele all the time. So that's kind
of the goal. Not every dentist is going to be
able to do it. It's just going to be one
or two in a market that's going to capture that
high end.
Speaker 5 (11:20):
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(11:41):
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Speaker 4 (12:00):
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Speaker 6 (12:02):
Say goodbye to empty chairs and say hello to a
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Speaker 3 (12:25):
So if you give somebody advice and they're starting, you
know they're moving into a new area of new practice,
and you get to compare apples and apples, not apples
and oranges. So say they're offering.
Speaker 4 (12:36):
You know, in Visiligne.
Speaker 3 (12:39):
Aligners, would you consult with somebody and would you have
them come in at the lower end, the middle or
the high end as their pricing. Say, they do the
research and they see somebody in the market's on there
for four thousand, somebody's on there for seven thousand. Where
would you tell them as a new practice to come in.
Speaker 4 (12:58):
Okay, that's a really good question.
Speaker 1 (13:00):
And so so I actually had a guy ask me
this question a few years back. Okay, Now he happens
to have a couple pediatric medicaid dental practices and so
he's making money from those, and he says, Carl, I
kind of maybe want to do something different, like a
cash only practice and only go after the high end.
How would I approach that? And I gave him an
(13:21):
approach for that. So, if you just want to go
straight into the high end, it's going to be a
slower process. I think it's long term a better process.
But but you're gonna have to have some savings to
do that, right. Otherwise, if you don't have money and
you don't have savings, then you're gonna have to kind
(13:41):
of chase like everybody else. So then you're gonna have,
you're gonna have to pay, You're gonna have to price
yourself competitively. To be honest with you, and then as
you get more experienced, then you can start kind of
weeding out your your bad payers with your better payers
and move up. And that might be a five or
ten year process, depending on how good a marketer you
are and how good of of kind of like your
(14:06):
personal brand. If you will you know, I mean to
be honest with you. I mean this gets really this
gets really about the doctor.
Speaker 5 (14:15):
Right.
Speaker 1 (14:15):
The more professional the doctor looks, the more professional they act, uh,
They're going to attract a different client to them and
and be able to charge more. So there's there is
some charisma to this in my opinion, right, I mean
it's it's it's showmanship. And so the person that has
the showmanship we'll be able to get into the market
(14:36):
faster and be able to raise their prices. You see
this with dermatologists all the time. Dentists I don't really
necessarily see them try to to to do this. Now,
there I have found actually an exception to this that
is is unique in the market. So I have found
that sometimes if a dentist moves to like an underprivileged,
(14:56):
underserved area, right, they can be they can do more
with their pricing. If they move to an underserved area.
They there might not be fancy restaurants, there might not
be all that fancy lifestyle stuff. But if they move
to an underserved rest area, they will have demand and
they can charge more. But but that's not top of mind.
(15:18):
I've seen that with the numbers, because sometimes people move
to the LAS think they're going to kill it. There's
so much competition there. It's way harder than you think.
And your staff costs more and your rent costs more,
and so it's harder.
Speaker 4 (15:30):
It's not easier, it's harder.
Speaker 3 (15:31):
Right, all right, So now you know the scenario. So
people are afraid to increase their pricing it's free, they're
going to lose customers or what have you. So what
advice would you give somebody who is apprehensive about increasing
their their costs because you know, people like I don't
want to lose customers, and you know, and they're used
(15:52):
to spending this. So what advice would you give somebody
to embrace the thought that they have no choice but
to the keep.
Speaker 1 (16:01):
Yeah, okay, so we've had we've dealt with this question before,
and so I have put together this pricing tool that
helps people understand if they're making margin.
Speaker 4 (16:11):
On their whatever it is.
Speaker 1 (16:13):
Okay, whatever it is, whether it's an implant, whether it's
the invisil line, whether it's it doesn't matter what it is.
And so in the pricing model you put in, you
you put in your cost, okay, so that there might
be a you know, the cost of the of the implant,
the cost of material, and then you put in the
labor associated if there's a machine involved. We did with
(16:34):
the machine, and it will compute a margin, okay, And
so the margin, and there's something I call it. I
call it a pricing margin. So I'm just going to
use a general number. So let's say that your cost
before you pay a doctor and all that stuff is
fifty percent. Okay, So let's so that'll be our threshold
(16:55):
is fifty percent. And I might say, well, I know
that I need my margin to be at least sixty
maybe seventy percent on each individual item, so that I
have enough to cover that fifty percent, right, So I'm
hoping I'm going to go for a bench mark of
say sixty or seventy percent well, this this pricing model
will help you compute all of the trees, if you will,
in your in your forest, to see if you're actually
(17:17):
making money on those. And so what you'll find is
sometimes you might have one that's forty percent okay, or
thirty percent, and you're doing the market price on that.
So say it's a visil line or whatever, and you're
only making thirty percent on it, okay, Well that that's bad.
And so you got a couple options. You can quit
you in Visiligne in this example, you could raise your price,
(17:40):
but if you raise your price, you might not get
as many okay. Or there's another option where I can take,
say a visil line and something else that I invented
or some other visilign plus okay, and I create a package.
And so maybe a visil line's at thirty percent and
this other thing maybe is at ninety percent, and then
as they average together, I get vision lined up to
(18:02):
say fifty percent, and I can live with that, okay.
So so if you package things together and and and
you're given the customer or the patient more than they
originally asked for, and you've packaged it in a very
unique creative way, I don't know. I don't know exactly
what that is, you know, but that's how you increase
(18:25):
your margin. It's by packaging things together. Okay, you know,
you because the because the market has a price on
in visiligned, but they don't have a price on a
Visilign plus.
Speaker 4 (18:33):
Well what's in visilign plus? I don't know.
Speaker 1 (18:35):
Well, I do all these extra things and that and
it costs us much.
Speaker 4 (18:38):
Okay, smart, And that's.
Speaker 3 (18:40):
How you look and that's you know. Something that we
do in all the market is we come up with
strategies for you too, come to think outside the box
and to differentiate yourself and offer a full smile makeover
instead of just offering one little piece ready to be
to be able to come in and if somebody do
get the fee the lined and then get in whitened
and then do implants of veneers and be able to
charge out twenty thousand dollars versus four thousand and five thousand.
(19:04):
You know.
Speaker 1 (19:04):
So yeah, you know, yeah, it's a complete concept. Now
it's not just in visial line. It's like we're going
to make you look beautiful again right with the teeth.
Speaker 4 (19:13):
And I think.
Speaker 1 (19:13):
People underestimate just the value of the teeth, you know
when they just have those makeover shows and they change
people from you know, had to toe right, but it
was it was I always fold interesting that when they smiled,
like you didn't look at anything else, You only looked
at the smile, right, And that's the power of the smile.
They're not selling they're not selling healthy teeth, They're selling
(19:37):
a smile. They're selling something different, right, exactly.
Speaker 3 (19:41):
It's twenty with the practice. And I go in and
meet with the staff and we trained them. I say,
what business that we en? What business are you win?
And they're like, we're in no business. Worry this, You're
in this file business.
Speaker 4 (19:53):
That's exactly right.
Speaker 3 (19:54):
Your job is to change people's lives. And if you
just walk down the street today, if you're in a
busy you know, if you're in a busy town, busy
area and you just look at somebody and just walking
towards you, and if they're smiling and feeling better about themselves,
you feel better about that person. You even know who
they are. You just smile back because you see them happen.
So the more that somebody smiles, the more better they
feel about themselves more and the better other people feel
(20:14):
about them, you know, so you so think outside the box. Guys.
I called one last bit. So if you give somebody
who's listening to this one bit of advice is something
to do today in order to potentially be more profitable
or be able to increase that pricing. What would you
suggest they do today internally that can make a little
bit of a difference for them.
Speaker 1 (20:35):
Well, I think the thing that they could do today
is they need to price their I mean they need
to go through like I mean I have obviously I
have a pricing model they can use. But to be
honest with you, if you go through the pricing model
and you put in your top five or ten sellers,
you will know if you're profitable on.
Speaker 4 (20:55):
Each one of those items.
Speaker 1 (20:56):
Okay, so you need to know if you're profitable on
your main items because you might find out. Like in dental,
this might not be so obvious, but let's say that
you have a hygenis doing the work. When you're going
to have an assistant doing the work, your price is
going to be the same, but your costs are surely.
Speaker 4 (21:13):
Going to be different, right, because you're not Annigenois.
Speaker 1 (21:16):
Right, So if you can get somebody to do the
work that doesn't cost as much. That's a way to
increase your profitability as well. And let me add one
more thing, because we're seeing this a lot, and so
I'm going to kind of change it just to teeny bit.
So I guess, to be honest with you, the one
thing I'd probably do today is I would to increase profitability.
As I would I would start replacing staff with technology
(21:39):
as much as possible and think about what do I
really need to do to get this delivered, and how
can I use technology to help me deliver the product
and service. Because staff is just going to get more
and more expensive. There's probably going to be less people
to work in the future just because of the birth
rates and all that kind of stuff. Technology, you're going
(22:01):
to have to embrace technology and figure out how to
leverage it.
Speaker 4 (22:07):
You know, we have a small staff.
Speaker 1 (22:08):
I only have like three or four people, but we
do two or three times the work that we did
a few years ago just because we're using technology to
help us so much.
Speaker 4 (22:17):
So I would say, use.
Speaker 1 (22:18):
Figure out a way to use technology in your practice
before hiring someone.
Speaker 4 (22:23):
That's a great way to save money.
Speaker 3 (22:25):
Awesome, great, great tip. So well, thanks so much for joining.
And I've got two more questions for you. One one
question is I'm going to give you a gift. I'm
going to give you the ability to have dinner with
anybody in history.
Speaker 1 (22:41):
Okay, who you're meeting? All right, that's a good question. Religiously,
I might choose the Savior. If I was going to
be non religious, Well, that's a tough question.
Speaker 4 (22:53):
I might choose. Well, that's a good, good question.
Speaker 1 (22:57):
I mean, my gut tells me I want to talk
to Beto in our box or something.
Speaker 3 (23:02):
If you're gonna say music before so okay, they told
wal be kind of tough considering news death there, so
you have to learn sign language from there.
Speaker 4 (23:12):
Let's go with back.
Speaker 1 (23:13):
I think he was a great composer ever, so uh,
there you go.
Speaker 4 (23:17):
Good.
Speaker 3 (23:18):
And where you're gonna go?
Speaker 4 (23:20):
Where are we going to go?
Speaker 1 (23:21):
Probably the best take place we can find, all.
Speaker 3 (23:26):
Right, Carl. And if somebody wants to learn more, talk
to you, learn about how you can help them. What's
the best way for somebody to reach you?
Speaker 4 (23:33):
A couple of ways.
Speaker 1 (23:34):
One is obviously our website www dot d R c
f O dot com, or you can email me at
Carl C. Carl to c at d R c f
O dot com and we're happy to talk to you great.
Speaker 3 (23:48):
Thanks so much. I appreciate it.
Speaker 4 (23:50):
Guys.
Speaker 3 (23:50):
You have to know your numbers, plain as simple. Everybody
watches Shark Tank. First thing I say is you know
your numbers, and everybody's watched Shark Tank. So you have
to know what it is and how much it costs
and realize to it, adapt to technology, adapt to change,
and you know, figure out a differentiator. And if you
could position yourself the right way in the market, you
can charge more, plain and simple. Somebody, you know, why
(24:11):
did somebody go into a portion dealership and drop one
hundred and fifty grand when they could get a car
for forty Okay, it's because of the way it's perceived
and the results. So if you could show people that
you have great results and your perception in the market,
you could get more. So Carl, thanks again for joining
to appreciate it. Everybody in podcast land, thanks so much
for listening. Thanks so much for all of your insight
(24:32):
and questions following us on social media. Look forward to
helping you learn more down the road. Everybody out there
and podcast land, thank you so much and don't forget smile, smile, smile,
Bye everybody. Thanks Carl
Speaker 2 (24:51):
WORTHO marketing dot com three hundred and sixty degree digital
marketing solutions for your practice
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