Pricing your lab with confidence. By Ashley Byrne

PRICING YOUR LAB WITH CONFIDENCE

By Ashley Byrne Editorial Board Member and Director of Byrnes Dental Laboratory

Lab pricing is always a tricky one to tackle. For many of my early years as a lab owner, I was nervous when sending price lists with a rise of more than a few percent. This year I raised my prices by over 20% on average which, several years ago, I would have lost sleep over, yet this time I felt utterly relaxed and confident in sending out that price rise.

Lab owners have notoriously been nervous about raising prices and when labs do call me, I’d say that’s probably the most common question I get asked - even more so when labs switch to digital.

Having confidence in putting your prices up is a little easier when you reverse the thought process and take it out of dental. Let’s take a service you use regularly - so you become the buyer - and consider what happens when the seller raises the prices. A common one would be a hairdresser you use regularly, or for me, it’s my local pub. Let’s take the hairdresser as an example. You walk in and they always make you feel welcome, maybe you get a cup of tea, maybe a beer, but they cut your hair the same way you like it every time. When you leave there, you just feel happy and despite having 5 other hairdressers in the town, you always go back. Now if that hairdresser suddenly jumps 10%, do you risk trying another hairdresser? OK, some will, but the vast majority of people won’t switch. You’ve bought into that hairdresser; you know what you get and you’re never disappointed.

Running a lab is like being a hairdresser (go with me on this). Your clients, the dentists, actually like you, they use you because you are reliable, they use you because you have a relationship. If you raise your prices 20%, are they going to risk switching and then having unhappy patients? They know that you know what they like, and for the sake of 20%, I’d be very surprised that you would lose any of your regular clients, as I didn’t lose a single one.

Never forget the 80/20 rule in business. Chances are, 80% of your revenue, is generated by your top 20% of clients. When you confidentially put up your prices by 20%, those top 20 are the key people to talk to. If they don’t leave you, it doesn’t matter what happens to the bottom 80% as they are generating around 20% of your sales.

Dental technology has never been in a better place for demand. The number of labs is dropping, the number of technicians is plummeting*, and yet the market for lab work is growing at just under 10% per year** in the UK market. That puts us all in a strong position for pricing but it’s also a scary position as who will satisfy the demand? Digitisation is now considered more the norm in Crown and Bridge and Implants labs, with denture labs starting to show digital entry to market. If we have too much work, we can use price to reduce volume but ultimately, as this problem of technician numbers worsens and volume increases, we need to run smarter labs, which is most likely around milling and printing. This is an exciting development but a costly investment, and to ensure we protect our labs, we must remember that capital expenditure is going up, not down. Just because a digital printer can spit out 20 splints a day and a technician can only do 10, that doesn’t mean we have to reduce the costs. The printer will wear out, the material cost will rise, but more importantly, it is your skill set that people are paying for. Development and training is also a cost and that is a price. On several occasions in my early printing days, l had nearly thrown those printers out the window after a 12-hour print run produced nothing but carnage and failure. Though many burnt fingers, I now know how to scale my printers but those failures and triumphs of experience are what makes your lab the great lab that it is.

For years we have grumbled of poor pay and working conditions, and this has partially driven the crisis of lack of technicians, with little or no new technicians coming into the marketplace. We are skilled registered professionals and using our extensive skills, we are a vital part of the dental team – now more than ever before. Well run labs are key service providers in dentistry and we must charge appropriately for that skill set and services if our industry is to remain strong and buoyant and attract new talent. The race to the bottom is firmly over. As an industry we are now here to support each other. Pricing with confidence is a challenge but once you’ve pushed your worth, it allows us to re-invest in our businesses, pay the salaries that are due, and run the high tech labs that we are all heading towards. It’s an exciting time to be a technician and together, we can make Dental Technology the incredible industry it should be.

*GDC Official figures of technician's **European Dental Implant Market Insights, 2019-2025