Session 4 – Intro to Psychographics – Podcast

Session 4 – Intro to Psychographics 

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Session 4: Another Fond Look at Market Segmentation for Dentists

By Scott McDonald of (Article for Industry Publication by Sally McKenzie, April 2015).

A rather breathless call came to our office from a dental consultant on the East Coast.  “Scott, all the good places for practice are gone!  What are we going to do?”

Without meaning to offend an otherwise wise and experienced professional, the question is foolish on its face.  Are there really no places left to practice?  Of course, there are great places to choose from!  Unfortunately, if you maintain that there is a fixed type of practice location with a limited set of variables, you might have reason to be concerned.  Due to several factors, dentists don’t have the luxury to assume that the “traditional” places to practice will continue to spring up.  In the last four years, the birth rate in the United States has declined significantly.  Many communities are aging rapidly (meaning that their median age is going up) because younger families are not moving into their neighborhoods to purchase their homes.  Additionally, younger adults (those in their 20s and early 30s) are delaying family formation.  When they do, they are opting for apartment dwelling rather than home ownership.

Unless these trends turn around, in 20 years there are going to be long-term sociological changes that are going to be tough to reverse.  Most demographers set the point-of-no-return at 2050 (for birthrates).  But until that time arrives, there will continue to be many opportunities for new practices to be created and for finding patients who will desire dental services however. It is true that the standard practice model of “low-hanging fruit” with an area showing 1.5% annual growth rate, having two parent homes, and all covered by indemnity dental insurance is disappearing.  But if one still holds out hope that this situation is the only answer to success, they may want to hide under their front desk and have a good cry.  Of course, they could also move to Texas.


We are recommending to our clients that the best place to set-up practice, open a satellite, or consider expansion in the practice will have five characteristics that will be more valuable that the traditional model:

  1. Look for employment, not big upward swings in population. There are many parts of the U.S. and in most metropolitan areas that boast strong employment statistics.  No, they don’t have to be earning a huge amount.  The fact that they have gainful employment means many people in a favorable situation to utilize dental services.
  2. Churning is still the buzzword for the decade. New housing is the past.  Churning is the future.  This is a situation where people move in- and out-of an area.  The fact is, people are not living in the same place for nearly as long as they once did.  They are more prone to move within three years than stay in the same place for seven years as they once did.
  3. The sheer number of teeth available to treat will continue to be an attraction. In short, finding a practice that is located in or near a large population center, even one that is not increasing in size, allows for more options in setting up a practice.  If there are not sufficient numbers of potential patients, nothing will make a low-population “sow’s ear” into a “silk purse.”
  4. Stop being an economic snob! There are too many doctors looking for only the upscale populations to serve.  Demographers and Economists divide the population up into “quintiles.”  The Middle Class has traditionally been the middle quintile.  Oddly, many dentists believe that their success will depend only upon the upper two quintiles.  In fact, most dental need resides in the third (middle) and second (just below the third) quintiles.  Granted, they may have poor insurance and less disposable income that the rich but they are in need and can be motivated to appreciate a good dentist.
  5. You may have to move. There seems to be a reluctance for many dentists to consider locations in other parts of the U.S. I mentioned Texas.  Well, the truth is, the Mid-West, South, and Intermountain regions are growing and developing. Even near traditionally successful and prosperous metropolitan areas there is a resurgence of new employment and development.  Some of these have popped upon the radar screen as recently as three years ago.  This will require you to keep an open mind, even if your goal is merely to open a satellite office.

When we discuss market segmentation, there is a tendency to think of everyone as fitting narrow demographic categories.  Often, inexperienced doctors will consider there are only two: good patients and bad patients.  Professionals miss wonderful opportunities by thinking too narrowly or limiting themselves to clichés of the past.

Scott McDonald owns, a firm devoted to finding and evaluating practice locations, practice promotion and marketing.  Scott’s Reports can be obtained through their web site and directly from Sally McKenzie Associates.