Orthodontics for the millennial generation

The millenials are here! How will orthodontists thrive in an era when the millennial generation, the first generation of true digital natives, constitute the majority of the adult workforce. You first need to understand them. Richards Jones’ talk to BOC ”Orthodontics for the millennial generation: Keys for survival in a new age” is an important first step to building a picture of this cohort. Richard will be speaking in the Mountbatten Auditorium at 2-00 on Friday 28th September as part of the practice development day for the whole team.

You may have heard a lot about millennials in a business context of late. Why? The reason is that 2018 is the year that the last of the millennial generation hits adulthood. The term “millennial generation” refers to those born between 1980 and 2000, as distinct from the previous generations- the “baby boomers” (born 1945-1965) and “Generation X” (born 1965 to 1980). In various circles the millennials are also referred to as the “selfie” generation.

From a business perspective, this development is highly relevant because they:

* are the largest generational group in history, numbering 17 million in the UK

* constitute over 25% of the population

* hold the largest generational buying power in history

* by the early 2020’s they will constitute 75% of the adult workforce in the UK

From an orthodontic perspective, it is clear that this group will now form the vast majority of our adult orthodontic market for the foreseeable future. With this in mind, it is easy to understand why there has been so much market research into this generation as businesses look to understand the consumer habits of this group.

Within orthodontics there is currently widespread orthodontic procurement of NHS contracts taking place which will dramatically change the business landscape. Many existing NHS providers will no longer hold NHS contracts and there will be many new market entrants. Even for those successful in securing NHS contracts, they are likely to be delivering such services at significantly reduced UOA values which brings economic and operational challenges.

Industry studies show that profits of dental and orthodontic practices have been on the wane for same years, even without imminent lower UOA values. The most recent NHS Digital accountancy report (published Sept 2017 for practices with NHS only or mixed NHS/private income) showed that for all providers, profits were down 1.9%, a trend that has continued since 2006/7.

Analysis suggests that for a practice successful in securing a contract with a similar volume of UOA’s at the lower end of the new scale compared to the current national average, profits will be significantly dented. Without either a reduction in costs or an increase in other revenue streams, the potential reduction in UOA value will reduce profits by up to

25%. Further analysis suggests that to counteract this as well as rising costs, private income streams would need to rise by 20% just to stand still!

This stark analysis demonstrates that for all practices, with or without NHS contracts, development of private practice is of paramount importance 

With this in mind and the increasing influence of the millennial generation it is obvious that we need to understand this group as best we can. Are they any different to previous generation? Market reports across a variety of industries would suggest they are, with differing trends in terms of their financial priorities, decision making, how they digest and share information as well as how they respond to different marketing media. Some of their behaviours will come as no surprise but I suspect some will shock you and it is vital to understand these trends in order to thrive as a business. Even though as a group they possess the greatest buying power, at an individual level this generation is on average less wealthy than previous generations at the same age. Employment is high but generally in lower paid jobs. House and car ownership is dropping and it appears this is not just an affordability issue with many millennials simply not seeing these as priorities. Fortunately, millennials seem to place great importance on health, well-being and beauty and as such seem increasingly willing to invest in areas such as orthodontics.

However, the way that this generation is influenced by marketing and how they make decisions differs dramatically from previous generations. Research shows that millennials have the lowest recall of any generation when it comes to advertising with only 1% suggesting that their purchasing decision would be influenced by a traditional advertisement. Moving forwards, it would appear that investing in traditional methods of advertising is essentially a complete waste of money.

So, what marketing strategies do work and what attracts the millennials? The millennial generation is the first generation of true digital natives with 98.6% owning smartphones which they check an average of 43 times a day! A huge percentage rely on online blogs or reviews to inform them and influence their choices. They increasingly rely on peer opinion and share purchasing decisions via digital platforms so as businesses we need to ensure that we have the correct platforms in place to facilitate this. Like it or loathe it- social media will play an ever more important role in communicating with patients so we need to be ready for this.

During my lecture at this year’s British Orthodontic Conference in London, I will be discussing these trends as well as many more in detail and suggesting strategies for orthodontic practices to adopt to help their communication and business development with the millennial generation. This lecture forms part of the Practice Development Day, a session that has been developed for the whole team to help develop teamwork, efficiency and profitability. Among the other topics being covered are business strategy, leadership and team culture, sales, branding and efficient clinical delivery models. I have no doubt that the day will offer a huge amount to orthodontists and their teams in these challenging times and I look to see you and your teams there.

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