Jazz Imaging has become synonymous with its unique subscription model option for its dental sensors. This offers unprecedented value for practices who need to add more sensors or replace broken sensors with minimal upfront costs. At the same time, and perhaps more importantly, the Jazz subscription plan provides the security of a lifetime warranty and predictable cash flow.
CFOs typically treat equipment purchases as a capital expense out of necessity (leases generally aren’t an option). But even when leasing is possible, they prefer to add capital to the balance sheet to depreciate the asset over time. This is with the objective of maximizing EBITDA. This makes sense for most assets, but not for sensors. In the end, the real answer lies in the total cost of ownership (aka, life cycle cost).
In today’s environment, when the cost of capital is close to 10%, borrowing money or allocating valuable cash to an asset might not make sense. Purchasing a premium sensor typically costs $5-6k; using “borrowed” cash, this has a roughly $500/yr drag on earnings. If you need both Size 1 and 2 sensors to perform the same task as a Jazz Solo sensor, this cost doubles to $1000/yr. Yes, there are cheaper options from brands that resell overseas sensors, but DSOs won’t get the premium sensors, warranty and support their practices need.
Sensors typically are depreciated over 5 years, which equates to roughly a $1200 annual depreciation expense. Large DSOs with the Jazz Club have the same $1200 annual operating expense. But sensors are different from large CapEx purchases because of the shorter practical life of a sensor. They also have limited repairability, and heavy use of sensors in the office environment. Sensors typically can’t be repaired and don’t come with a 5-year free replacement warranty. Unfortunately, sensors often break within 5 years because of poor care, particularly with DSOs since the staff is generally unaware of the high cost of replacing a damaged sensor. Unlike Jazz Imaging, other sensor companies don’t cover sensors that are damaged.
Forecasting the cost of a warranty is fraught with uncertainty and risk. Most suppliers won’t provide ongoing tech support after the standard 1 or 2 year warranty expires. Some even ask for a credit card when office staff call with questions. Many DSOs opt for an extended-warranty plan…which is an expense. These warranties often have a deductible that is can be 50% of the original purchase price…another expense. Of course, DSOs can choose to self-insure at their own risk, but this makes forecasting warranty expenses unpredictable and highly dependent on staff training.
Bottom line, there will be significant, unpredictable warranty expenses for purchased sensors.
When a sensor breaks, clinic throughput decreases because hygienists need to share sensors or reschedule patients. Purchased sensors have confusing, limited warranties. As a result, the back and forth with typical sensor companies, particularly those that don’t make their own sensors, can take days or weeks. Jazz Imaging ships replacement sensors the same day.
The impact of delays on a high-paced DSO is unmeasurable and decision makers for equipment purchases should avoid the risk of practice downtime and lost revenue.
Leases have a fixed term. The Jazz Club is a month-to-month program, so DSO’s can cancel anytime…but they don’t! Jazz Imaging has a retention rate of >99.5% because customers value the product, support, lifetime warranty and continue to see long-term value and benefits.
The Jazz Imaging subscription plan minimizes upfront costs and ensures predictable cash flow with a lifetime warranty and support. Both tangible and intangible benefits are the reasons so many DSOs have joined the Jazz Club.
If you (or your DSO) are new to Jazz and don’t have any Jazz Sensors in your office, Click continue to the Free Trial.
Already Have a Jazz Sensor? Go to “My Account,” login and click SHOP to add another sensor.