Sales seasonality in dentistry
Sales seasonality is the technical term for the fact that some months, from a business revenue perspective, are better than others, all other things being equal. Sales seasonality explains why a whopping 15.3 per cent of national chain department stores sales are in December.
Dentists should know that general dentistry and orthodontics may be similarly affected by sales seasonality. Unlike retail, however, the high and low months in dentistry aren’t as apparent as the Christmas season in retail.
Why is knowing your industry’s seasonality useful?
Seasonality directly affects revenue and has an outsized effect on profit margin. If you’re going to run your business effectively, you need to be able to project what your practice’s revenue will be in the coming months. Knowledge about seasonality informs whether the uptick in your income that you saw this month will be there next month, or whether your revenues are likely to revert to the mean in a month. This knowledge, in turn, enables you to make smarter decisions about when to undertake hiring or capital improvements to your practice and will also inform you as to when to up the budget spend on areas such as Google ads and dental seo.
What is the sales seasonality cycle for orthodontic and dental practices?
Orthodontics:
Although adult orthodontics is a growing market in the orthodontic practices referenced in our data set, the practices’ revenues were still primarily driven by adolescent patients. And that means that the seasonality of the sales tended to follow the school calendar.
Summer is Hot!
May and June may be slow. That’s because students are finishing up the school year and parents are reticent to schedule orthodontic appointments not to mention new exams. And as soon as summer hits, however, watch out, because business may pick up dramatically. Based on our data, July and August are the most significant months in the orthodontic revenue calendar, with a 100 per cent increase in business over the May and June figures, and up 50 per cent over an average month.
End of Year Bump
Orthodontic revenues then seem to settle down until December and January when there’s another significant uptick. December ends up looking like an average month from an overall revenue perspective because most offices we reviewed are closed for at least a week. Still, there’s a definite increase in new patient starts per day. That carries through to January. Practices are typically open all month, and it ends up about 25 per cent over an average month.
General Dentistry:
For general dentistry sales it appears, based on our limited data set, that seasonality is a bit more muddled than in orthodontics, insofar as there may be different seasons for different types of patients.
The Summer of New Patients
According to our data, new patients are most likely to join the practice at the end of summer. As families get settled in for the next school year large numbers make check-up and cleaning appointments with general dentists and many end up joining the practice for the long term. This is offset by a slow month in September as families start their school year. Finally, there is also a notable uptick in production in April, although the explanation isn’t as clear.
End of Year for Bridges and Crowns
In general dentistry, unlike in orthodontics, revenues do not directly mirror new patient flow, but more closely track the production of significant ticket procedures such as crowns and bridges, according to our findings. Here, insurance benefits dominate seasonality. With these high-ticket items, patients cluster around December (for those looking to use expiring benefits), January and February (for those looking to use new insurance benefits). Thus, while August is a big month for cleanings and check-ups, it is December and January which based on our limited data set delivered the highest revenue.
How do I use this seasonality data?
Understanding sales seasonality has implications on every part of your dental or orthodontic practice. On the sales and marketing side, knowing that a big August is likely to be followed by a slow September might dictate that you should hold off on hiring a new dental assistant in late August to cope with your newfound additional patient flow. Or on the expense side, knowing that December and January are likely to be your most significant months might encourage you to save up capital expenses like new equipment for those months. And on the psychological side, knowing that it’s not just your practice that is having a bad September may help ease some anxiety.
Is this data going to match my practice?
The short answer is that we don’t know. Every individual dental practice is unique. So, if there are unique characteristics to your practice that dramatically affect the patient flow, the seasonality of the sales modelled here will not perfectly match. For example, a practice located in a summer vacation area may see a spike, in business related to the fact that the population surrounding the practice swells dramatically during summer each year. Similarly, unique dominating characteristics about the finances of the area can affect sales seasonality in a way not captured in the data above.