Last week, in my main blog channel, I wrote a blog about The Idea Virus. It might do good to read that first here because it gives context to this principle of product design, particularly in the world of dentistry, which is where these blogs are generally centred.
In the blog regarding The Idea Virus, I spoke about how ideas can't be kept tight; you can't keep a lid on the idea, it will get out one way or another. And so, some years ago in our business, we were static and stalling. We sat at the top of the pyramid in terms of price, service, and delivery, and we were providing guarantees to patients, but we weren't even telling them we were; we were just being ‘the good guys’.
What started to happen around us (and many places around us) is that people went cheaper, so ostensibly to the patient (the customer), people were cheaper than us providing the same product.
We had not differentiated our product enough.
Product design and product differentiation are crucial in any market, and that leads on to the descriptions of the features and benefits of the products you produce, and so whatever it is you sell, you'd better be able to explain why you sell it and who you sell it to, and justify the price at which you sell (whether it's high or whether it's low).
And so, to share the idea here that you can steal if you like, ‘because ideas can't be kept individual’, then we developed our implant level system. At our practice, they are quite simply called Level 1, Level 2 and Level 3 for our implant products.
To be clear, this is not a new idea, and this was taken from many other practices that were doing this at the time. The practises that we saw, though generally had two levels, so let's, for the sake of argument, call it Level 1 and Level 2.
Level 1 was a premium implant system, for example, the Straumann Dental Implant System.
Level 2 was what they now call a Challenger system, let's say the Neodent System by Straumann.
What was happening, though mostly in practices is the same person was producing Level 1 and Level 2 for patients. So, the only differentiator was the implant system, but in order to create a clear differentiation, there had to be a separation in price. So, the Challenger system was priced at a much lower level than the discount that the practitioner was getting on the implant components themselves.
Let me explain.
If it’s £450 for the components for a Straumann high-end dental implant case, it may only be £250 for a Neodent case (or even less), and so there might be £200 worth of difference in the overall cost, but the dentists were discounting it at £500.
This is mental.
The same person producing the same treatment with slightly different components in the same surgery with the same staff over the same time is markedly reducing their cost to do this. It was not a good differentiator product.
What we did was we took Level 1; we gave a 10-year guarantee if you signed up to Level 1 (as long as you attended for recommended maintenance). We used the best components we could get, Straumann SLActive, custom abutments, all of that stuff, and we use the most experienced clinicians. We began with 3 clinicians and now have 4; these guys are the guys that have placed thousands of implants between them, the guys that have the most experience at navigating cases.
Level 2 was less experienced clinicians, one notch down on the Straumann product pyramid, SLA not SLActive, stock abutments, etc, but with a 5-year guarantee. So still an extraordinary product and an extraordinary guarantee, but clearly differentiated from Level 1, therefore the price can clearly be differentiated.
The third level that we can offer is teaching implants. These are implants (where suitable) that are placed on a course. This is a one-year guarantee, obviously the practitioner is different, and we use the implants that Straumann gives us FOC (perversely, that's the most expensive implants because they're selling them to the delegates).
What this story is designed to show you, by way of metaphor, is that it's really important that you can tell a story about your products. Why they cost what they cost, because then you can offer this out to a wider group and potentially have a better business.
Find out more about this on the business course.
Links are here.
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