This is a true story.

In the early days of the 1990s after purchasing my own practice in downtown Parramatta, the local dentists heard rumours that two health insurance companies were each about to set up multi-chair dental clinics in town.

And start treating patients. And become direct competitors of the dentists who had been treating their members.

It didn’t seem fair.

These dental insurance companies had by virtue of their membership programme been able to amass data on these patients already, because of the patients’ claim records, and it was obvious the companies were now going to use this data to establish their own dental clinics in a suitable location that would target these patients’ needs.

The local dentists were infuriated.

The local dentists believed this course of action to be unfair.

The local dentists believed that the insurance companies were going to take all their patients. These dentists believed that if the insurance companies weren’t stopped, then their private dental practices would go out of business.

A committee of these dentists was formed to lobby the government.

Members of this committee met with the State Minister for Health, who laughed at them when he was told that these insurers’ actions would result in the funds’ members receiving dental services at a lower cost than they currently were paying private dentists for those services.

The Minister didn’t seem too concerned that the dentists were going to possibly go out of business as a result of this new competition in their marketplace.

The committee didn’t know what to do.

Three members of that committee stood for and were elected to the NSW ADA, in an effort to get the ADA [Australian Dental Association] to champion their cause.

But the ADA was torn, because it also had members who were going to be employed dentists working for the insurers.

And so, as I said, two of these insurance clinics came to town…

Here’s what happened…

Two things happened.

Those local dentists who chose to compete on price with the insurance companies struggled to compete.

Because the insurance companies had the ability to market aggressively to their members about their dental clinics.

The insurance companies also had the ability, because of their size, to offer dental services at a lower price. It was an economy of scale thing…

But here’s what also happened…

One dental practice that was located one block away from these insurance clinics chose to differentiate itself by offering dental services to its patients wrapped up in an Ultimate Patient Experience.

Dentistry with Five Stars of Customer Service Excellence.

And that practice grew its turnover dramatically…

Because the owner of that practice realised that no matter what, there would always be a certain percentage of the population who would seek out quality, and an experience, rather than simply just “best price” for the dentistry they needed.

This dentist’s practice grew.

It TRIPLED its turnover in a six year period.

And then it DOUBLED its turnover again in the following five years.

And in the four years after that, this dental practice added another ONE MILLION DOLLARS to its turnover.

In a fifteen year period, this dental practice grew it’s turnover by $3Million, despite having these insurers operating on a less than level playing field, right around the corner.

The owner of this practice chose a lane, and he ran with it.

And his choice paid off.

It’s simple really….

This dentist set about building a practice to service the 20-25% of the population who choose quality and service and RELATIONSHIPS, rather than choose on price.

His practice was known for not being cheap.

But his practice was known for being worth it.

People who came to town and asked where they were should go to the dentist were told:

“You’ll pay a little more there, but IT’S WORTH IT….”

What actually happened….

The insurance companies actually did take patients away from all the local dentists… but they took that percentage of the population who use price as their primary driver when choosing their dentist.

And this dentist I mentioned above worked out that looking after those price conscious patients was a more stressful way of trying to survive compared to going the extra mile and offering a world class experience to all of his patients each and every time they attended his practice.

And the reason I know that this dentist was so successful, is because this dentist was me.

The lesson here is…

The lesson here is simple.

There will always be competitors who think they can take a piece of your action, by trying to duplicate what you do.

But in reality, all they will do, by undercutting you on price, is to take away those customers who can be quite painful to deal with.

Ultimately, if your clients and customers and patients have a relationship with your business based on the quality and the service that your business provides, you will always be successful.

There will always be competitors who come along and compete on price.

But they won’t be you…at best they’ll be a cardboard cut-out of you. Your customers choose you because you are you, and not some fly in blow hard out to make a quick buck.

In closing…

In closing, years ago there was a hairdresser who was concerned that a barber was setting up next door to him offering $5 haircuts, and that this was going to be the end of his hairdressing business… he couldn’t compete on price.

So here’s what he did in an attempt to survive…. he put a sign in his window, and business got better… a lot better!!

That sign said this:

“We fix five dollar haircuts”

When your business becomes known for the way it makes its customers feel special, rather than for having a low price… that’s when you’ve created a truly successful business.

Anything else is just a cardboard cut out…


Dr. David Moffet BDS FPFA CSP is a certified CX Experience coach. David works with his wife Jayne Bandy to help SME businesses improve their Customer Service Systems to create memorable World Class experiences for their valued clients and customers. Click here to find out how David and Jayne can help your business