Another Look at 'The 80/20 Rule' in Dental Practices

By now you have probably heard of what has come to be known as “The 80/20 Rule.” Put simply, it is a rule of thumb that says that 80 percent of results come from 20 percent of causes.

For instance, in business, 80 percent of your revenue is likely to come from 20 percent of your customers; 80 percent of sales in a retail company will come from 20 percent of their products; 80 percent of the results an entrepreneur achieves will come from 20 percent of his or her time; and so on. It applies to undesirable outcomes too, with 80 percent of your problems with staff or clients coming from 20 percent of those populations.

It’s easy to see the rule in action in dentistry. It is probably true that 80 percent of your revenue comes from 20 percent of your patients – the segment of your patient base who accept at a higher level. And if you’re a specialist, 80 percent of referrals will come from about 20 percent of your referring GPs – your “A” referrers.

The problem I see with the 80/20 Rule is not the validity of the observation – I think it probably does hold true in most situations. The problem comes with how people use this statistic to guide their actions. Once you believe that 20 percent of your patients (or referrers) are responsible for the great majority of your success, it can seem that the logical inference is to spend a lot more energy focusing on those 20-percenters, since that’s where you get the greatest return on your time and effort. This, I think, is a misguided approach.

That’s because the people who make up that 20 percent represent an ever-changing group. In any given month, 80 percent of your revenue will come from 20 percent of your patients, that’s true. But next month, it will likely be mostly different patients who make up that 20 percent – the patients you have newly convinced of the value of comprehensive care.

(Click here for a subtle yet simple way to improve dental treatment acceptance rates.)

And here’s the important thing to remember: You don’t know who those people might be. That’s why you need to give 100 percent of your clinical and professional attention to 100 percent of your patients 100 percent of the time. 

Another thing to remember is that the 20 percent is just that – a percentage, not a fixed number. This means that as your practice grows so does the number of people who populate that 20 percent. This is important for specialists to keep in mind when trying to improve their relationships with referring GPs. By using powerful strategies such as hosting study clubs, your list of ‘A’ referrers can grow significantly. They will still represent 20 percent of your business, it’s just that now we are talking about 20 percent of a bigger pie.

So here is my advice: Live your life by “The 100 Percent Rule” and the 80/20 will take care of itself.

(If you like this article, click here for more dental practice management tips from Imtiaz Manji.)