There are several tips for DSO leaders to pivot their operations and prepare for an economic downturn or other negative event that could impact their practices.
Dental Care Team Group President Ibrahim Jarjoura, DDS, and Catrise Austin, DDS, owner of VIP Smiles Cosmetic Dentistry, recently joined the Becker's Dental + DSO Virtual Event to discuss the best strategies for DSOs to persevere during tough economic times.
Editor's note: Responses were lightly edited for length and clarity.
Question: What are some early warning signs DSOs should watch for that signal the need for adjustments in strategy or operations ahead of a potential economic downturn?
Dr. Ibrahim Jarjoura: The main thing is for you to stay on track with observing your statistics or KPIs. We have so many different things we follow, the number of new patients, our collection [and] production, and there are certain KPIs that are forward-looking ... so there are certain things that will tell you what's happening in the future and one is, how many new patients are you getting? Is that going up? Is that going down? What is the trend for that? If it's going down, I better do something to increase that amount in terms of marketing and so on.
[Marketing is] the easiest thing to cut when things are not going as well as you want them to and your bottom line is not where it needs to be, but what you're doing is reducing the amount of patients who are coming through the organization. So you're really shooting yourself in the foot. Marketing can be a million different things. It doesn't have to be something that costs you $20,000 a month. There's a term that I coined, and it's "outbound communication." Outbound communication equals inbound attention. The more you outbound communicate, the more attention you get, and that could be just sending letters to your patients, sending emails to your patients, sending newsletters for your existing patients. There are really two populations that you need to care about. One is your inside population, and the other one is your outside population. So the outside population is definitely marketing, social media, and then don't ignore your existing patients.
Dr. Catrise Austin: [If] you see fewer patients coming through the door, it's time to make a change. You see a lot of cancellations at the last minute or in advance, it's time to make a change. You see a change in the staff morale [or] you're starting to get staff turnover, these are all warning signs that it's time to make an adjustment. Of course, we've talked about looking at those operational costs and making those adjustments, and I would hope doctors and DSO owners are doing daily or weekly meetings with your staff so that they understand, because a lot of times they'll ask, "Why haven't I gotten a raise?" Well, if you understood the numbers, you would understand why that raise hasn't come. I think involving them in your daily, weekly or monthly meetings is critical to the whole team being on board with how the practice is performing, and they are invested in the practice growing. Hopefully, there are ultimately some bonuses set in place, and incentives for everybody to work together as a team. Those are the key warning signs that we have to look at and adjust in the future.