One of the concerns most often expressed by our potential buyers is “I am afraid the patients will leave the practice after the seller is gone.” While there may be a small amount of patient attrition following a dental practice sale, the vast majority of patients will remain with the practice so long as the transition is handled properly (the average attrition rate is less than 10%). In order to understand why the attrition rate is so low, let’s examine a practice transition from the patient’s perspective:
The patient receives a letter from their dentist announcing the sale of the practice, introducing/endorsing the new practice owner, and thanking/asking patients for their continued support. The patient then has two options: (1) give the new doctor a chance and continue being treated at the dental office where they are accustomed to the location, operating hours, staff, collection/insurance policies, etc. OR (2) begin the process of locating a new dental office where they are unfamiliar with all aspects of the practice. While a handful of the seller’s close friends, family members, and long-time patients who have been traveling a significant distance to see the seller may decide to find another dental office that has a more convenient location, the vast majority of patients will heed the seller’s advice, give the new doctor an opportunity, and continue their loyalty to the practice. As long as the patient has a positive experience during their first visit following the sale, the likelihood of retaining the patient is very high.
While the average patient attrition rate following a dental practice sale is relatively low, there are a few proven strategies that can be employed by new practice owners to maximize patient retention and provide a smooth transition of ownership.
Strategy #1: Transition Letter & Staff Training
Immediately following a dental practice sale, the selling doctor should mail a letter to all active patients introducing and endorsing the new owner. The doctors should also consider sending an email announcement to all active patients just in case the mailer is overlooked. We also encourage our doctors to give the letter/email a more personal touch by including a picture of the buyer and his or her family. In addition to the transition letter, the staff should be trained on how to answer the office phone, effectively communicate the transition, and instill confidence in patients during their initial interaction with the practice following the sale.
Strategy #2: Retain Staff
Keep in mind that patients often spend more time and have a closer relationship with the staff members (especially the hygienist) of the practice than they do with the dentist. Therefore, it is in the buyer’s best interest to retain the staff for at least 90-180 days following a dental practice sale. It is also wise to initially maintain staff compensation/benefits to ensure the staff has a positive attitude and supports the buyer during the transition. This strategy will allow the new practice owner to preserve goodwill and trust through leveraging existing patient/staff relationships while providing them with the opportunity to establish/build their own relationships with patients and analyze the efficiency/effectiveness of the current staff before making any changes.
Strategy #3: Maintain/Increase Office Hours
The buyer should focus on maintaining the current operating schedule of the practice for at least three months following a dental practice sale to provide continuity for existing patients and allow the new practice owner to determine if adding days/hours is necessary to better meet patient demand. Any changes to the operating schedule should be done gradually and be perceived as a benefit to patients. While offering extended hours or adding additional days to the schedule can have a positive impact on patient retention, new patient flow, and practice revenue, the additional cost in overhead expenses must also be considered.
Strategy #4: Consistent Branding
The selling dentist has likely worked very hard to establish a positive reputation and promote their practice within the local community (both of which are key components of goodwill). It is crucial for the new practice owner to preserve this goodwill and make the change in ownership as seamless as possible for the existing patient base by maintaining the name/branding of the office for as long as possible following a dental practice sale. While the branding of the practice can be enhanced by establishing a website, sending out direct mail, sponsoring community events, etc., it can also easily be damaged by immediately altering the practice name/image and potentially giving patients the impression that the office has undergone a significant change or been acquired by a corporate owner. Therefore, rebranding is a decision that should not be taken lightly and be analyzed in regards to each specific practice, its perception in the community, and the long-term goals of the buyer.
By implementing these four strategies and being mindful of how changes to the practice will impact the patients and staff, buyers can ensure maximum patient retention and a smooth transition of ownership following a dental practice sale.