Climbing the Value-Offering Ladder

Dec. 1, 2000
Remember the old television ads for Folger`s instant coffee? In one of these ads, a wealthy couple is shown sipping coffee after a gourmet meal in a five-star restaurant. When someone asks them how they like the coffee, they enthusiastically reply, "We love it! It`s so rich and flavorful."

Don`t just treat patients - give them an experience!

Nate Booth, DDS

Remember the old television ads for Folger`s instant coffee? In one of these ads, a wealthy couple is shown sipping coffee after a gourmet meal in a five-star restaurant. When someone asks them how they like the coffee, they enthusiastically reply, "We love it! It`s so rich and flavorful."

When it is revealed that the coffee is Folger`s crystals, the couple is astonished. "You must be kidding," they reply. "This is the best coffee we`ve ever tasted! Who would think instant coffee could be so good?"

The message that Procter & Gamble (the company that makes Folger`s coffee) was trying to convey was that discriminating coffee drinkers enjoy their beverage. Yet, there is much more to the ad than meets the eye. There is an underlying message here that you can put to good use in your dental practice.

No doubt, the coffee was good. But, perhaps, it was the surroundings - and not the beverage itself -that made the coffee taste so delicious. Would the couple have said the same thing if they drank the Folger`s coffee at a fast-food chain? Probably not! It was the experience of the five-star restaurant that made the difference.

Experiences are magical. They enhance the value of every product and service. People flock to businesses that provide superior experiences ... and gladly pay more for the privilege!

Las Vegas is an example of a city that provides tourists with one unforgettable experience after another. The tourists return time and again because of it.

Experiences form the fourth step on what I call the "Value-Offering Ladder," following commodities, products, and services. To see how experiences fit into this equation, it helps to first look at the other steps.

The Value-Offering Ladder

Commodities are the first step on the Value-Offering Ladder. A commodity is extracted from nature and sold to the market. For example, coffee beans are a commodity. The value of the beans used to make a cup of coffee is about two cents.

Products are the second step on the Value-Offering Ladder. A product is made and sold to users. For example, Procter & Gamble takes coffee beans, grinds them, and sells them under the Folger`s label for about 10 cents a cup. The company can charge more because it adds "value" to the commodity. Procter & Gamble turns it into a product people can use.

Services are the third step on the Value-Offering Ladder. A service is created and delivered to clients. (These clients are called patients in a dental setting.) Restaurants are a type of service business. They purchase ground coffee, brew it, and then sell it to their customers. A fast-food restaurant may sell coffee for 95 cents a cup. The fast-food restaurant can charge more because it adds value to the product in the form of service.

Experiences are the fourth step on the Value-Offering Ladder. Experiences are staged and revealed to guests over time. Starbucks knows the value of staging experiences. That`s why the restaurant can charge several dollars a cup for its "gourmet" coffee, while McDonald`s can charge only a dollar. Starbucks can charge more because it adds value to the service by providing an upscale atmosphere and attentive staff.

A shift toward experiences

The commodity economy peaked in the United States about 1880. The product economy peaked about 1950. The service economy is peaking right now. But it is the experience economy that is gaining momentum now ... and that`s where you want to position yourself in the years ahead!

Disney knows this. Its theme parks and cruise ships are practically pure experience. Major league baseball also has recognized the value of experience. In every city - Baltimore, Cleveland, and San Francisco, to name a few - where a fan-friendly, baseball-only field has been constructed, attendance is up and the amount of money spent per person has soared. Oddly enough, the product itself (the team`s win/loss record) actually went down in some cases, but it doesn`t seem to matter. Why? The experience is what brings in the fans!

At this point, you may be thinking, "This is all quite interesting, but what does it have to do with me?" The answer is everything! Ninety-nine percent of the dental offices I visit rise only to the service level. The problem is that all products begin to look the same after a while. Likewise, all services appear the same over time.

It`s this sameness that managed care encourages. After all, if one office is identical to another, then commodity-like fees are acceptable. Patients won`t demand a higher level of care because they don`t even know one exists!

Now, more than ever, the practice that differentiates itself stands to gain. You can differentiate yourself by going up a rung on the Value-Offering Ladder. Give your patients an experience. They will not only remain in your practice for life, but will recommend you to everyone they know.

The final step

Transformations is the fifth and final step on the Value-Offering Ladder. Transformations are as distinct from experiences as experiences are from services. Transformations change peoples` lives.

A growing number of people are asking for transformations these days. That`s why plastic surgeons are doing so well, while many physician groups are struggling. Plastic surgeons are not only in the medical business; they`re in the transformation business. You can be, too, by becoming a master cosmetic dentist, positioning your office correctly, and offering cosmetic services to the growing group of patients who want to look younger or more attractive.

I realize when I write an article like this one that many readers will think this level of success is not possible. Only about 5 percent of dentists will see the power of experiences and transformations and climb the Value-Offering Ladder by making significant changes in their practices. Are you going to be one of that5 percent? I certainly hope so! The view is more exhilarating and rewarding from the top!

Points to consider

- The words you use every day reveal a great deal about your practice and the kind of value offering you provide. Do you treat patients ... or serve guests? Do you fix teeth ... or improve lives?

- As mentioned above, people gladly will pay more for good experiences. They will even believe the same product or service is better based on how it is delivered. What are you doing in your office to create an experience your patients will remember? Sometimes - even small touches, such as mouth rinse in elegant decanters in the restrooms or updated reception-area reading material - go a long way toward making a good impression

- Think about what you and your team would do differently if you charged patients an "admission fee." What kind of "experience" would you stage for your guests? I`m not suggesting you do so, of course. Just consider the changes you would make. Maybe your reception-area furniture needs a facelift. Or the front door needs painting. Maybe it`s a general attitude that needs adjustment. Has your team become complacent? Take a good look around and try to imagine how your practice appears to a first-time visitor.

- Consider the types of experiences that are best for the kind of dentistry you want to provide. Do you want to do more cosmetic dentistry? Perhaps the Ritz-Carlton experience is best. Do you like family dentistry? Then go for a Disney experience. Do you want to attract a certain ethnic group? Consider adding touches to your office that will appeal to that group of patients.