After working with and having conversations with several dentists over the last few years I have realized that there are many parallels between running a dental practice and running a financial planning practice. Many of these parallels have to do with behavioral finance. The first similarity between the two are that dentists and financial planners rely on “nudges” to help impact positive behavior of their patients and clients. A “nudge” is a concept borrowed from behavioral economics that essentially means building structures in such a way as to encourage the proper outcomes.
Most dental offices have already developed some sort of basic system to pre-schedule the next (usually) six-month appointment for a cleaning. A reminder card - or for the more technologically proficient - a calendar invite or text acknowledgment is provided. An email, text, or direct mail is generated sometime before the appointment to assure that they patient actually shows up, but still - a number of patients will no-show, cancel, or somehow avoid the next follow up visit.
There are ways to create momentum for the patient and improve on this number. For instance, simply adding a small personalized story or meaningful statistic to each notification around the appointment scheduling and reminder process will nudge them in the right direction. It is important to note that these MUST be personalized to the demographics of the patient. A 55-year-old man will not find meaning in a statistic around millennials, nor will a busy new mother be inclined to keep her appointment by telling her a story about senior gum health.
An example of a nudge in financial planning is notifications and messaging around increasing a client’s savings rate. This could be a reminder to increase 401(k) contributions or to max out an IRA contribution. For example, “at your age and with the amount of time until your retirement goal, increasing your 401(k) contribution by 1% could be worth an extra $200,000 by the time you are age 67”. The more specific and relevant, the more impactful.
Whether you run a dental practice or a financial planning practice, implementing and personalizing these “nudges” can help encourage positive behavior for patients and clients whether is is oral health, overall health, or financial health. Stay tuned for a future blog post with another analogy between dental practices and financial planning practices!