Choosing the Right DSO Structure: Single Branded House vs. Multi-Location House of Brands

As a DSO (Dental Services Organization), you are well aware of the complexities involved in managing multiple dental practices under one umbrella.

One crucial decision you must make as you build your DSO is whether to operate your dental practices as a Branded House or a House of Brands. Each structure has its own set of advantages and disadvantages, and the choice should be made based on your specific situation.

Benefits of Branded House Structure

Unified reputation

A Branded House structure creates a strong sense of unity among all dental practices operating under the DSO. By sharing a single brand name and identity, your DSO can leverage the positive reputation of one practice to benefit the entire organization.

A patient who had an excellent experience at one clinic is more likely to trust, choose, and (crucially) recommend another clinic within the same DSO — enhancing patient retention and loyalty across the board.

Cost-efficiency

Centralizing marketing and branding efforts under one unified brand can result in significant cost savings for your DSO. Instead of investing in multiple marketing campaigns and advertising strategies, resources can be concentrated on a single, comprehensive branding initiative.

This streamlined approach allows your DSO to achieve economies of scale and optimize marketing expenditures, thereby maximizing the return on investment.

Clear brand message

The Branded House structure enables your DSO to convey a clear, consistent brand message to patients.

By unifying brand elements such as the logo, color scheme, and mission statement, your DSO can communicate its core values and services in a cohesive manner. This consistency helps patients understand what your DSO stands for and what to expect across all practices, fostering a sense of trust and reliability.

Cross-selling opportunities

With a shared brand, your DSO can capitalize on cross-selling opportunities between its dental practices. For instance, if a patient visits one clinic for routine dental care, they may be more open to trying another practice within the DSO for specialized treatments. This inter-practice collaboration can lead to increased revenue and patient loyalty for the entire organization.

Negatives of Branded House Structure

Vulnerability to reputation risks

While a unified brand can strengthen the reputation of the entire DSO, it also makes the organization more vulnerable to the negative impact of a single practice’s poor performance.

If one clinic provides subpar service or experiences a negative event, it can tarnish the reputation of the entire DSO, affecting patient trust and loyalty across all practices. Managing and mitigating reputation risks become critical in a Branded House structure.

Limited market segmentation

Operating under a single brand may limit your DSO’s ability to cater to diverse market segments with unique preferences and needs. Patients in different locations or demographics may respond better to tailored marketing messages and brand identities that resonate specifically with their individual characteristics.

A single brand might not effectively communicate your DSO’s value proposition to all potential patient groups.

Brand dilution

Maintaining a strong and consistent brand image requires a careful balance between central control and local adaptation. If not managed properly, individual practices within your DSO may dilute the brand’s identity by deviating from the central brand guidelines or offering inconsistent services. This could result in confusion among patients and weaken the overall impact of the brand.

Flexibility and innovation constraints

A Branded House structure may limit the flexibility for individual practices to experiment with innovative approaches or new services. The need to maintain consistency with your DSO’s overall brand identity might discourage practices from trying out creative marketing initiatives or unique offerings that could potentially differentiate them in the local market.

Benefits of House of Brands Structure

Targeted marketing

With separate brands for each dental practice, the House of Brands structure enables DSOs to implement targeted marketing strategies. Each clinic can customize its brand message, visuals, and promotional activities to cater to the preferences and demographics of its local community. This localized approach often resonates better with patients and fosters stronger connections with the community.

Risk distribution

A significant advantage of the House of Brands structure is the reduced risk associated with reputation management. Negative incidents or poor performance in one clinic are less likely to impact the reputation of the entire DSO since each brand operates independently.

This risk distribution offers a level of protection and allows underperforming practices to rectify their issues without affecting the overall DSO brand.

Market diversity

By operating multiple brands for your multi-location dental practices, your DSO can reach a broader range of patients across different market segments. Each clinic’s unique brand positioning can attract patients seeking specialized services, resulting in a wider patient base and increased opportunities for growth.

Flexibility and innovation

The House of Brands structure fosters an environment of innovation and experimentation. Individual practices can freely explore new services, marketing techniques, and patient engagement strategies that align with their specific brand identity. This flexibility enables practices to adapt quickly to changes in the market and patient demands.

Negatives of House of Brands Structure

Marketing expenses

Operating multiple brands necessitates separate marketing efforts, which can be more costly compared to a centralized approach. Your DSO must allocate sufficient resources to each brand’s marketing and branding activities, which could result in higher overall marketing expenses.

Brand recognition challenges

Building and maintaining brand recognition for each clinic can be challenging and time-consuming. Unlike a single unified brand that benefits from consistent exposure, individual brands may take longer to establish themselves in their respective markets.

Potential brand confusion

If not managed well, multiple brands under the same DSO can lead to confusion among patients. Patients may not recognize the connection between various clinics, which could result in missed opportunities for cross-selling and retaining patients within the organization.

Operational complexity

Managing multiple brands with different operational procedures, visual identities, and service offerings can be complex and demanding. It requires efficient coordination and communication to ensure a consistent level of quality and patient experience across all practices.

Which structure should your practice choose?

Deciding between a Branded House structure and a House of Brands structure is a significant decision for your multi-location Dental Service Organization. As you weigh the benefits and challenges of each approach, consider the following factors:

• Alignment with DSO goals: Evaluate which structure aligns best with your DSO’s long-term goals and core values. Determine whether a unified and consistent image or diversified and localized branding is more suitable to achieve your organizational objectives.
• Market analysis: Conduct thorough market research to understand the preferences, needs, and behavior of your target patient demographics. Assess whether a single brand can effectively resonate with all segments or if a multi-brand approach would allow you to better cater to the diverse patient base.
• Resource allocation: Examine your DSO’s financial resources, marketing budget, and operational capabilities. Determine whether you have the capacity to effectively manage and promote multiple brands or if centralizing resources under a single brand would lead to cost efficiency.
• Organizational structure: Consider the level of autonomy and collaboration you want to foster among your dental practices. Analyze whether a unified brand would facilitate knowledge sharing and consistency in services or if individual brands would encourage innovation and localized patient engagement.
• Risk management: Evaluate the potential risks associated with both structures. Consider the impact of negative incidents on brand reputation and how you can best mitigate and distribute these risks to protect the overall DSO’s image.

Remember, there is no one-size-fits-all answer to this decision. Successful DSOs have thrived under both structures, depending on their unique circumstances and strategic approach.

Carefully weigh the pros and cons, and consider seeking input from key stakeholders, including your dental practice managers and marketing teams. By making an informed choice that aligns with your DSO’s vision and values, you will set the stage for sustained growth and success in the competitive dental industry.

:Delmain can help your DSO take the next step

A digital marketing partner can help you cut costs, increase results, and differentiate your brand (or brands).

At :Delmain, we offer turnkey strategies that can help your DSO grow no matter the structure you employ. We know what it takes to attract and book the right patients. Our proven patient generation strategies have propelled dental groups and DSOs to new levels of success.

Learn more about our approach or book an intro call.