5 Things Every Dental Lab Needs to Achieve its Growth Goals

By Kevin Stout on November, 27 2017
Kevin Stout

Our friends at LabStar recently invited us to give a webinar presentation on boosting sales and increasing customer loyalty with the power of a Net Promoter Score (NPS). Click here to check out the recording! (And click here to find more great webinars from LabStar.)

We wanted to pass along some of the valuable takeaways from that presentation that will help you achieve your growth goals.


1. Dental labs are facing three main challenges that are preventing growth.

One of the biggest challenges is customer acquisition costs. Thanks to competition, DSO aggregation, and dealer demands, the costs associated with acquiring new customers is rising across the industry.

A potentially larger problem is the dreaded customer churn. A certain portion of your customers are leaving you annually, and if you don’t identify the causes and slow your churn, you’ll never reach your growth goals.

The third challenge is that many companies aren’t measuring their customer loyalty against industry benchmarks. And if you’re not measuring it, you’re not managing it, right?


2. Lower prices and increased marketing and sales aren’t always the solutions.

Contrary to what many believe, cost is not the biggest factor when it comes to customer loyalty. Price cuts often lead to a race to the bottom with your competition — someone will always find a way to go lower, and no one wins. Quality and the customer relationship will always win out, but both will suffer with a price cut.

Marketing and sales are important — don’t get us wrong. But throwing more money at this problem will only lead to further increasing your customer acquisition costs.

3. One question can be the key to increasing customer loyalty, decreasing churn, and attracting new customers. Yes, just one question.

And that question is: On a scale of 1 to 10, how likely are you to recommend this lab to a friend or colleague?

How your customers answer this question will give you valuable insight into your lab’s predicted growth rate for the foreseeable future. This is called a net promoter score (NPS), and it segments your customers into three loyalty groups:

  • 0-6: Detractors
  • 7-8: Passives
  • 9-10: Promoters

Your “score” is equal to your percentage of Detractors subtracted from your percentage of Promoters.

% of Promoters - % of Detractors = NPS

On average, an industry’s NPS leader outgrew its competitors by a factor greater than two times.

The dental lab industry average NPS is 41.


4. Labs must “weaponize” their Promoters while identifying Detractors in order to achieve growth.

Promoters are your best friends. They’re thrilled with the products and service they’ve received, and they’re loyal to your brand. And the best part of all: they’re telling their friends and colleagues about you. Word-of-mouth is the most valuable marketing tool, so it’s important to make it easy for them by offering referral incentives. You can also thank them for their loyalty and ask that they leave you a review. Then sit back and watch these customers turn into your best salespeople.

On the other side of the spectrum are your Detractors — they’re not big fans, to say the least. And worse, they’re telling their friends and colleagues about you and the negative experiences they’ve had. These customers have a 40-50% chance of bailing on you in the next 90 days.

The good news is that your Detractors are not a lost cause. You still have a chance to turn it around, but you have to do it quickly. If you can identify your Detractors and address their issues in a timely manner, you have a good chance to prevent them from churning.

But it’s important to remember a few things in this process:

  • Listen first. Act second.
  • Respond in a professional manner.
  • Follow up more than once.

There are also opportunities in the Passives group. They’re commonly new customers, so they haven’t had enough interaction to come to a solid conclusion about your work. Use your NPS data to understand their needs and gain their loyalty.


5. Tracking your NPS over time can help identify trends and find your ideal customers.

Keeping an eye on your NPS data can tell you a lot about your business and your customers. What do your Promoters have in common? What do they love about you? Where and how did you go above and beyond for these customers? Use this information to create an ideal customer persona and target similar prospects with future marketing and sales efforts.

What do your Detractors have in common? Are there any common complaints? What can your lab do better to improve customer service for these customers? These answers will help decrease your percentage of Detractors and your churn over time.

Do you want to learn how to use Net Promoter Score to grow your lab’s revenue 2X faster than your competitors? Click here to sign up for a free trial. Or schedule a meeting with LabWorthy Founder, John Schwartz to learn more!

Sign up for your FREE NPS Score Now

Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld


Kevin Stout

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