As the dental industry continues to expand in 2023, many practices are considering building new locations or adding new offices to their group. When consulting with these practices on their marketing strategies, we are often asked two questions: “Should we expand, and if so, where?”
The practice should research data that shows their current demand, potential future demand, and competitor analysis. Once established that there is enough demand in the area for another dental office, look at specific locations.
We recently worked with a rapidly growing dental practice in Omaha, Nebraska. They had outgrown their current location and needed to find either a new space to lease, build a new office, or buy the strip mall they were in. Based on their marketing data, we estimated that they had a demand for 55 to 70 new patients. We calculated this by analyzing their web traffic, number of phone conversions from their website, number of inbound phone calls, and how far out they were scheduling appointments.
Then, we validated these data points to determine their current and future demand. This information allowed them to make data-driven decisions about their expansion plans, including how many operating rooms to build and how many staff to hire. We often use this approach to help practices determine when to hire an associate doctor.
Here is the data we found:
- Website: The practice receives 550 to 700 web visits per month, and typically 10% of that traffic are new patients. This equals 55 to 70 possible new patients.
- Inbound phone calls: The practice receives around 700 to 850 inbound calls per month, and typically 8% of those calls are from new patients. This equals 56 to 68 possible new patients.
- Scheduling/capacity: The practice is currently scheduling new patients out over 6 weeks. They currently receive around 30 to 40 new patients per month, which means they could potentially double their new patient numbers to 60 to 80 per month. If this is the case, we would recommend adding at least one or two more hygienists and hiring an associate doctor.
After assessing whether expansion is a worthwhile investment, the next question to answer is “where should they expand?” This is a complex question, but we suggest that owning real estate is often a great option as long as the time horizon is more than seven years. While each case is different, we highly recommend discussing owning versus renting with an investment advisor to ensure that it aligns with your timeline and goals.
As you evaluate potential new locations, we suggest creating a scorecard that includes the following metrics:
- Visibility such as storefront, medical plaza, or standalone office.
- Ease of entry/exit from the location.
- Demographics in the 1, 3, and 5 mile radius around the location.
- Competitor analysis: How many competitors are there and how similar are they to your practice?
- Vehicle and foot traffic near the site.
As you consider expanding to a new location, look for a location that meets all of these criteria and pair strong operational efficiencies with your marketing strategies to ensure that your new location is a success.
P.S. If you want more tips like this check out the Marketing group on DSN. And if you want to work with CMOShare to expand your practice, join DSN!