Stepping up to tiered pricing

March 21, 2012
Richard Palmer

dlpmagazine.com-2010-09-01, Issue 9

It's often said that you can please all of the people some of the time, or some of the people all of the time; but you can't please all of the people all of the time. Or can you?

It's often said that you can please all of the people some of the time, or some of the people all of the time; but you can't please all of the people all of the time. Or can you?

When it comes to creating dental restorations, there are myriad differences between posterior and anterior teeth in terms of esthetic expectations, functional requirements, strength needs, material indications, build times, and so on. Yet, your carefully planned fee schedule most likely charges the same for a posterior unit as an anterior. And not every case will require the same precision and esthetic detail, regardless of tooth number.

"Most people on their posterior teeth, all they want is something simple and fast. They just want it to be close. And, they don't want to pay an arm and a leg for it," said Rob Teachout, CDT, LVI, BSc, owner of Patriot Dental Lab in South Branch, Mich. "For your anterior teeth, they're willing to pay for that extra color, to put  that internal stain in there and go with those 9, 10, 11, 12, 13 different porcelain powders to make it really stand out. And, they're willing to pay more for it."

Teachout added that a conversation he had with well-known and respected dental technician Buddy Shafer centered on the benefits of establishing different price structures for different levels of service. Shafer told him that large, multi-department labs could actually establish a mini-lab within the overall business structure of the existing laboratory to handle high-end casework, primarily cosmetic anterior cases, at a higher fee. "They could charge $250-$300 a unit, and the doctors would pay for it without a doubt," Teachout recalls of the advice.

On the levels

It's not unusual for larger, established laboratories to create spinoff business focused on specific areas to bring in new business or expand options for existing clientele. Pittsburgh-area Albensi Laboratories began outsourcing CAD/CAM work to an offshore milling center through the separate Innovative Dental Arts business to provide clients with a lower-priced alternative.

Teachout setup a simple 2-tiered price schedule within Patriot Dental Lab-Basic and Premium-complete with different prescription forms and workflow schedules on which of his three technicians works on which cases, though all cases remain in-house. "I'm the only one who touches a Premium case when it comes in," he said, though he has started training one of the other technicians on the model work for the Premium cases.

Once the case is identified as a Premium prescription-and placed on Teachout's bench-it is handled in an appropriately higher level from start to finish. "I use a different stone than I normally do with the Basic, I mount them on Stratos articulators, I use Adesso plates, and I package it differently. It would be like sending it to two different labs."

He commented on other labs that have gone even further with a tiered system, saying, "They broke it down into different powder porcelains, different materials, and different technicians, too. When you get into the larger labs, you've got a little more room to play with."
Makes a difference

Teachout estimates that of Patriot's total business, his Premium case load is between 10% and 20%, most of which is single anterior units with an occasional multi-unit case. Only about 3% of the Premium cases involve posterior restorations for patients (and the dentists) who want and pay for the extra work involved. "Sure, I'll charge them Premium for a second molar," if that's what they want. Some cases even mix Basic on the posteriors and Premium on the anteriors, and are priced accordingly.

Teachout said that "once or twice" a client has commented about the price difference between the tiers, but he is able to easily appease them by explaining the experience, skill, and time involved with creating a Premium as opposed to a Basic crown.

And, indeed, a picture is worth 1,000 words. "I show them the difference between a 1-body layered Basic technique vs. a 15-powderPremium technique," said Teachout. "They're like, 'OK, I want to do Premium.'"

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