GROUPON is making dentistry CHEAP!

Cold Front said:

So the dental office's cut is $24.50 for Dental-Exam Package with Cleaning, X-rays, and Comprehensive Exam?

What's the business model behind this?

These deals are more common than most people think.

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And the best part is that the people that come in with these groupons usually suck as patients. I just don't see the model behind it... at least for "normal" non-corporate offices.

Some dentists are willing to give away free exams/ cleanings to generate new patient flow.
These guys think that if they can get a patient in the practice they will win them over & convince them to pay for restorative, bleaching, ortho etc..
The problem is that you attract the wrong clientele w/ discount adds. The people that show up for free/ cheap exams are the same ones that don't want to pay a dime for dentistry.
The will be a waste of your time. Let them plug up the Groupon Dentist's schedule.

Cold Front said:

This link / deal will expire in about 48 hours:

http://www.groupon.com/deals/americ...eferral&utm_medium=email&utm_source=anonymous

$49 for Dental-Exam Package with Cleaning, X-rays, and Comprehensive Exam ($278 Value).

Plus Groupon takes 50% of the deal.

So the dental office's cut is $24.50 for Dental-Exam Package with Cleaning, X-rays, and Comprehensive Exam?

What's the business model behind this?

These deals are more common than most people think.

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The only practical use for something like this that I can see is if you are opening a practice cold turkey. I could see how it could be beneficial as a way to get your name out there while getting some foot traffic in the door, and hopefully keeping some of those patients.

I don't see how this is a viable model for established practices though, esp when you consider the 'grouponer' phenomena (where people only go to places for the deal with no intention of brand loyalty) .

I think groupon in general is a bad idea for most business. Let other dentists do it and learn the hard way that its a waste of time and money.


Im just a pre-dent though, so what do I know

I've read articles about how groupon has destroyed small businesses who have made the mistake to participate in them. Like someone else pointed out you get patients who sniped the groupon because they dont want to pay anything for dentistry.

The ethos behind groupon alarms me too. I dislike any busniess model that is built off of discounting other peoples work then taking a cut. I hope they fail.

yappy said:

I've read articles about how groupon has destroyed small businesses who have made the mistake to participate in them. Like someone else pointed out you get patients who sniped the groupon because they dont want to pay anything for dentistry.

The ethos behind groupon alarms me too. I dislike any busniess model that is built off of discounting other peoples work then taking a cut. I hope they fail.

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The biggest mistake they could've made was to not accept Google's buyout offer. Then again, you never know where they are going but I am doubtful it's s going to be as big as $6billion .

yappy said:

I dislike any busniess model that is built off of discounting other peoples work then taking a cut. I hope they fail.

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Why? Groupon isn't forcing anyone to discount a product or service. Businesses are rolling the dice, hoping to make up the difference in volume and additional business from the new customers. Groupon is simply funneling people to their front door in a way that the businesses couldn't do on their own.

Where did I say they were forcing anyone to do anything? I dont respect middle man / no value added business models. We have enough of that in this country - more and more instead of creating something or doing something of value people are looking for ways to siphon money away from people actually developing or providing a product or service.

I've seen Invisilign on Groupon for $2000 bucks. Groupon takes $1000; office take $1000 but pays out $1500 to Invisign for a $500 loss, not including other overheads. How do they make money?

Demeter said:

Some dentists are willing to give away free exams/ cleanings to generate new patient flow.
These guys think that if they can get a patient in the practice they will win them over & convince them to pay for restorative, bleaching, ortho etc..
The problem is that you attract the wrong clientele w/ discount adds. The people that show up for free/ cheap exams are the same ones that don't want to pay a dime for dentistry.
The will be a waste of your time. Let them plug up the Groupon Dentist's schedule.

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My friend works for an office that tried Groupon and that's exactly what happened.

Daurang said:

I've seen Invisilign on Groupon for $2000 bucks. Groupon takes $1000; office take $1000 but pays out $1500 to Invisign for a $500 loss, not including other overheads. How do they make money?

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This boggles my mind. How can you expect to recuperate a $500+ loss? I can see how getting a pt in the door for a discount cleaning and/or whitening MIGHT work, but this is extreme. Are you sure the coupon was 2k for treatment or a $2k discount on tx?

I've said it in a different thread, but I don't agree with the Groupon-dentistry combination. It works great for movie tickets and new restaurants though,

yappy said:

Where did I say they were forcing anyone to do anything? I dont respect middle man / no value added business models. We have enough of that in this country - more and more instead of creating something or doing something of value people are looking for ways to siphon money away from people actually developing or providing a product or service.

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I don't think you understand what Groupon really does.

I do.

8 SNAKE said:

I don't think you understand what Groupon really does.

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I've worked at a clinic where they have very cheap <$50 for exam/xrays. They have a lot of patients, obviously cater to low socio-eco people but do well enough (1+ million, 2 dentist).

yappy said:

I do.

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With all due respect, if you understood you would not claim that Groupon added no value to the equation.

Daurang said:

I've seen Invisilign on Groupon for $2000 bucks. Groupon takes $1000; office take $1000 but pays out $1500 to Invisign for a $500 loss, not including other overheads. How do they make money?

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Invisalign a few weeks ago basically told any of their certified providers that if they want to remain invisalign certified, that groupon discount advertising of their product isn't allowed.

Apparently from what my wife, who is an invisalign certified orthodontist, heard from one of her ortho residency classmates who works for invisalign as a case reviewer, is that the groupon invisalign issue was stemming mainly from GP's who are invisalign trained offering the groupon discount.

If that was the case, then more than likely those GP's would look to make up that invisalign-groupon loss via the selling of ther treatment "needs" BEFORE they would let the patient begin invisalign treatment.

DrJeff said:

Invisalign a few weeks ago basically told any of their certified providers that if they want to remain invisalign certified, that groupon discount advertising of their product isn't allowed.

Apparently from what my wife, who is an invisalign certified orthodontist, heard from one of her ortho residency classmates who works for invisalign as a case reviewer, is that the groupon invisalign issue was stemming mainly from GP's who are invisalign trained offering the groupon discount.

If that was the case, then more than likely those GP's would look to make up that invisalign-groupon loss via the selling of ther treatment "needs" BEFORE they would let the patient begin invisalign treatment.

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Thanks for the insight DrJeff. Is there a difference between invisalign "trained" and "certified"? You mention selling treatment needs, this seems like it can be borderline ethically questionable. Do you think this is/can be a potential problem?

Also, I think I remember hearing that invasilign tx runs about $4-6k. Talk about hugely discounted and large profit margins.

Daurang said:

I've seen Invisilign on Groupon for $2000 bucks. Groupon takes $1000; office take $1000 but pays out $1500 to Invisign for a $500 loss, not including other overheads. How do they make money?

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You don't know what goes on once the patient gets to the office. They may have sold the Groupon by claiming it would be Invisalign treatment, but then actually give the patient some other aligner system that doesn't have a $1500 price tag. All of the aligner systems out there aren't really cheap but you could do a minor crowding case for a $500 lab bill with another company and hope to sell the patient on some regular priced cleanings and whatever other dental needs they have. Invisalign also has a 10 tray option at $900 and a new $600 option for really minor cases.

Also, at the higher tiers of Invisalign, the lab bill does go down but still not enough to make a profit after the $1000 from the Groupon.

Groupon recently approached me to do one for $3000. I told them no. It works for the GP because they have other services which can produce money. The orthodontist is only doing orthodontics to produce money. The hope for the GP is to break even on the Invisalign, gain a new lifetime patient that may spend $3000-5000 over the next 5-10 years and refer a friend.
This is what drives me crazy about GP's doing ortho. There are about 5-6 other things that they could be doing to make more money than ortho. Ortho is really only going to boost their production by about 5-10% and they are going to pay for it in emergency and financing headaches. That 5-10% production increase by the GP is like a 15-20% decrease for the orthodontist. So the GP doesn't get helped much while the orthodontist gets slammed.

Everything is in the eye of the beholder. For my practice, Groupon has actually been a success. I'll be honest, when we were approached to do Groupon, I thought what everyone else is saying with regards to the patient pool brought in. I thought people would come in for the cheap deal and that's it. But what I found is the majority of Groupons has been people who haven't seen the Dentist in a few years and wanted to try us out (most of these people even have Dental insurance). We have converted about 75% of our Groupons into return patients and about the same percentage have had some kind of restorative work done (the percentage goes up if you include people who have needed/come in for SCRP's).

To me, Groupon is all about marketing. You loose money on the initial visit, but Dentistry is special in that people come back in the future. Paid marketing is the same concept, you have to put in something to get something out.

Once again, we treat a Groupon patient just as any new or current patient. By building up our office and staff, the patient will find value in your service provided. I believe that once a person walks into our office, our staff and the appearance of our office really wins the patient over. We just had our second Groupon feature and the response has been very similar, so I'm happy with the turnout.

BUT, I do agree there are a few people who come in for the "cheap" cleaning, and at times that can be very frustrating. That's life

A little side note, we did an exam, X-rays, cleaning and $1000 off Invisalign for our promotion.

Cold Front said:

Groupon = Ponzi scheme.

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Are you doing Groupon at your new practice Coldfront?

Is $48 pre-determined? Can a dentist negotiate with Groupon to raise the price? Or can you limit the numbers of promotions?

I can't remember where (I think it is MSNBC??) anyways, there was a tv show like a business report how a skin-care, hair removal high-end salon lost tons of money due to Groupon. Not only most of new patients never returned, but also, they caused the business to lose existing customers. Due to the high volume of phone calls and emails, employees were stuck answering and replying. (I wanna say the salon had to even hire someone for part time to accommodate the calls and emails, but I'm not exactly sure). What happened was that existing customers were upset with the salon not being responsive and unable to schedule them in time (b/c of high volumes from Groupon) and went to a different place.

But I guess success of Groupon promotions largely depends on location (city, state), demographic, and numbers of competitors. If u can limit numbers of sales, it will be golden.

PS
just because 99% times Groupon is profitable, that doesn't mean you should do it. and vice versa. I think that one should make a decision based on a lot of deliberation, crunching numbers, and considering your practice model (fast vs slow, new vs established, gross, expenses etc). You can't just hop on Groupon wagon and expect it to bring you more profits.
Again, it goes back to the principles of microeconomics. There is no free lunch

TheClutch-

The $ depends on the service you provide. Typically there is a 50-50 split between groupon and the client.

DrDDSman said:

TheClutch-

The $ depends on the service you provide. Typically there is a 50-50 split between groupon and the client.

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Sure sounds like fee splitting to me.

Found this "case study" on the groupon website. Looks like this was a struggling practice that decided to go for broke

http://www.grouponworks.com/case-st...e-teeth-cleaning-smile-fitness-dental-centers

I wonder what a "simple cleaning" is. Or is he trying to use that to pitch SRP to patients?

.

Cold Front said:

Businesses which participate with GROUPON are making dentistry CHEAP!

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Fixed it!


PPO insurance: The oldest form of groupon.

.

Mike3kgt is correct: Groupon and other online group coupon deals are starting to attract the notice of state boards as constituting fee splitting, which is illegal. In most states or all states, I don't know, but I bet it's all.
So, even though the marketing and financial side of Groupon deals can be evaluated and argued extensively, (is the money lost worth it in the long term, or do these new patients rarely stay, leading to financial loss?), the whole point is probably going to become moot because the practice gets judged illegal.

DentinBond said:

Mike3kgt is correct: Groupon and other online group coupon deals are starting to attract the notice of state boards as constituting fee splitting, which is illegal. In most states or all states, I don't know, but I bet it's all.
So, even though the marketing and financial side of Groupon deals can be evaluated and argued extensively, (is the money lost worth it in the long term, or do these new patients rarely stay, leading to financial loss?), the whole point is probably going to become moot because the practice gets judged illegal.

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Interesting point. What if groupon (or X marketing company) takes a lower rate? Say 10-20%? Does that still constitute fee splitting? The dentist still sees a majority of the income. Not sure how this would be different from other marketing tools.

DrDDSman said:

Interesting point. What if groupon (or X marketing company) takes a lower rate? Say 10-20%? Does that still constitute fee splitting? The dentist still sees a majority of the income. Not sure how this would be different from other marketing tools.

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I'm terribly afraid that for this one, I shall have to paraphrase one Dr. Leonard McCoy: "I'm a dentist, not a lawyer."

Or bricklayer.

We'd need someone qualified to give a legal opinion on the 10-20%, and also to compare to other marketing tools.