Whoever owns a clinic must focus on solvency to keep the doors open. This piece focuses on and teaches you to increase your profits and the success of your practice.
Annually healthcare providers invest countless amounts of staff- hours and resources to acquire new patients. Meetings are conducted, budgets are projected and set, and personnel is assembled. We strategize, scrutinize and improvise ways in which to attract our next big patient --- all to increase your profits.
Very often, the most significant question asked at these annual budget meetings is “Do we spend 30% of our advertising dollars on print or social media this year (as opposed to 25% from last year)?”
Too often, very little goes into the strategy of keeping those hard-won patients. Ideally, you also want to keep them over the course of several years. Many practice owners naturally assume that they [existing patients] will stay around for a number of years.
Actually, there’s a huge difference between repeat business and loyalty. Repeat business means that I’m willing to do business with you again, and again, and again. Loyalty means patients are willing to overlook others, turn down a better service, at a better price, or even inconvenience. Patients will do all that just to do business with you.
Those patients for whom you just happen to meet some arbitrary price standard or pricing objective, they're not very loyal. Often, those people will do business with you anyway. You shouldn't try to appease them; they come and go. If you focus your practice on "price-driven" patients, you're creating a never-ending cycle of profitable years and lean years.
But it’s those loyal ones, ... These patients are the ones who increase your profitability and create long-term clinic success.
So, how do we achieve this loyalty?
There are a couple of answers. First, you have to establish why you do what you do. Once you establish your core belief, it's a matter of identifying those people who share common interests and values. Now, inspire them to follow you. Second, your deepest and richest pool of ongoing business is right in front of you --- your current patients.
According to Simon Sinek, all promotions (and their subsequent sales) are achieved in one of two ways. You can either attract patients and have them choose you over the competition by manipulating price points and offers.
For example, buy one get one free, special discounts for…, giving something away for free, or some variation of a value-added concept.
Or, you can opt for the alternative; you can inspire people to follow you with no manipulation or trickery.
Incidentally, I cannot dispute that these and many other manipulations work; without question they do, that's why the advertising industry uses them. The problem is none of them breathe loyalty or engender trust.
According to Mr. Sinek, only a few leaders and a few organizations rely more on inspiration than manipulation. Some of the big ones that use inspiration to draw followers include Apple computers, Harley-Davidson, Disney, or Southwest Airlines, but you also see the same pattern in great leaders like Nelson Mandela, or Martin Luther King, or John F Kennedy.
He points out that most businesses conduct their conversations and subsequent communication in the following manner:
- A company begins with what they do in business.
- They quickly proceed to describe how they do business.
- Then, very often they neglect to explain why they do business.
Most of their exchanges end up sounding like this:
If you’re computer manufacturer, “We make great computers, they're beautifully designed, simple to use and user-friendly. Wanna buy one?” Or, maybe you’re a car dealer, in which case you might be saying something like “Our new car has tinted windows, great gas mileage, leather seats. Do want to buy it?” We are healthcare providers, “We've got the best medical people on staff, we went to the best schools, we do great by our patients, we work with some of the largest insurance companies, hire us.”
As you can see, these are merely variations of “what we do” and “how we do it.” These things are great, but they neither inspire nor do they promote you as the leader and authority in your industry.
The question is why anyone should follow you? What is your purpose in business, what's your cause, what's your belief, why does your company exist? Do we really need another doctor in town?
Here's an example that might provide clarity. Apple Computers' communication is crystal clear, and it’s direct and to point. More importantly, they begin by explaining "why" they are in business.
“Everything we do, we believe. We believe in challenging the status quo, the way we challenge the status quo is by making our products beautifully designed, simple to use, and user-friendly. We just happened to make great computers. Want to buy one?"
For this thing to work, you have to have three things: 1.You must have clarity of “why.” If you don't know why your practice exists, how will anybody else? 2. You have to have a discipline of “how.” You have to hold yourself and your
people accountable to your own guiding principles and your own values. 3. You need to have a consistency of “what.” Everything you say and everything you do has to prove what you believe at the end of the day.
We live in the tangible world at the end of the day. The only way people will know what you believe is if you say and do the things you actually believe. This is the concept of authenticity.
If we approach business with the standard models of leading with “what we do” and “how we do it,” we have it all backward. A well-defined “why” speaks to our inner self; it forms bonds and alliances. Actually, this is all grounded in the tenets of biology. It has to do with our human brains and our neocortex; within our brains lays the limbic system which is responsible for all of our feelings of trust and loyalty. It's also responsible for all human behavior, all decision-making.
Staying with Apple Computer for this example. The difference is Apple's not just selling us one of their computers; Apple is so clear about what they believe, so disciplined how they do authority branding, and so consistent in what they do --- it gets the point that their computers serve as a symbol of a set of values and beliefs. Those people who love their Mac didn't buy it just for the product. Their decision is based on the irrational sensibilities, and the rational differentiators. The same can said about people walking around with Harley-Davidson tattoos on their body; this is a corporate logo. In fact, some of them don't even own the product. Nobody is walking around with Procter and Gamble logos on their arm. The reason is apparent, Harley is so clear about what they believe. They’re so disciplined about how they do it and so consistent in what they do, it gets the point that everything they say and everything they do serves as proof of what they believe.
In both examples, they [consumer] bought it because it demonstrates something about who they are (the client believes that the company is “One of me!”). This is why authenticity matters, because if you say and do the things you actually believe you will attract people who believe what you believe.
That is the most critical point; you need to focus on developing your promotional campaign to do business with people who believe what you believe, your kindred spirits, a group of people with a common set of values and beliefs. When we're surrounded by people who believe what we believe, something remarkable happens; trust emerges. By the way, this paragraph represents the "secret sauce" to increase your profits.
People don't buy what you do; they buy why you do it!
The goal is not to do business with everyone who needs what you have; the goal is to do business with those people who believe what you believe.
There’s an inextricable link between communication and leadership; those who lead can clearly communicate what they believe, and those can clearly communicate what they believe are the ones who lead. When you talk about what you believe, and you can put your beliefs and values in clear words and symbols, consistent enough, authentic enough, people know that everything you say and do is what you believe. They will be drawn to you for themselves.
It’s a documentable fact, people who believe what you believe will go out of their way to do business with you. Those who don’t believe what you believe just want cheaper services.
There’s a considerable difference between repeat business and loyalty. Repeat business means that someone is willing to do business with you again, and again, and again. Loyalty says a person is willing to overlook others, turn down a better product, at a better price, or even inconvenience, to do business with you.
This leads us to the next important step. Deeping your relationship those people who are already working with you, know you, and trust you.
You need to focus your attention on building meaningful long-term relationships.
Before any assumptions can be made regarding the amount of time you retain a patient, you need to understand precisely how much each patient costs you to acquire. You need to calculate your patients’ Marginal Net Worth (commonly known as a patient's Lifetime Value). The marginal net worth represents the average profits you receive from a patient over the entire time you expect to do business with them. If you've never thought about a patient in this manner, or you never calculated patient’s lifetime value, try this:
• Determine what a patient costs (to acquire or lose); divide your marketing budget by the number of patients it produces.
• Determine your average sales and your profit per sale.
• Determine how much profit a patient is worth to you by how many times they purchase services from you.
Therefore, let me ask again: Do you now know how much each patient is worth to you? Therefore, how much money in advertising can you afford to spend to get one new patient?
Every practice owner knows that a steady stream of new patients represents its lifeblood. Conversely, very few clinics fully understand the financial impact each patient can have on their business. Until you’ve calculated how much a single patient is worth to you, you cannot possibly know how much you can afford to spend to get your next patient, or what it cost you to lose a current patient.
You can't keep the wolves at bay.
You now understand the value of each patient. However, no matter how well you do, you can never prevent your competitor from knocking on your patient’s door. Therefore, as you strategize about the number of new patients you want, education and brand loyalty must be PRIORITY ONE.
It is incumbent upon you to make sure that your patient believes what you believe and is thoroughly satisfied. Create an experience; make every visit to your office something significant and beneficial. Convince your patients that it would be a mistake to do business with any other doctor in town other than you.
Actually, every business school in the country teaches that it costs you significantly more money to get a new patient than to retain one and do more business them!
* It is 6 Times More Expensive to Win a New Customer than to Retain an Existing One – ThinkJar.com
Plus, according to the Harvard Business Review, it is up to 25% more expensive to acquire a new patient than to retain existing patients. Further, Frederick Reichheld of Bain & Company states that increasing customer retention rates by 5% increases profits by 25%-95%.
Confirm and solidify your patients' confidence in you. Write books and special reports on those unique health needs that your patients have. If you need help with that, we will gladly help you to create and write your distinctive message. Your goal is to separate yourself from every other healthcare provider in your area. Becoming a published author and expert on your specific topic pays substantial loyalty dividends.
Essentially, you need to let the patients be your best gatekeeper against prowling clinics trying to take your people!
You need to create “raving fans” out of your patients. Do you want to increase your profits? This represents thousands of dollars of additional annual revenue for you!
* This asterisk represents a massive disclaimer, an X factor, to the previous statement. The technique of creating raving fans depends entirely on you. If you don't have clarity of why you do what you do; if you don't have a disciplined how to do what you do; and, you don't have a consistency of what you do, in everything you say and project, all these efforts are meaningless. Moreover, you will leave these patients exposed to your competitors. If they provide [your competitors] a better option and service, you will lose them!
It’s also essential to remember that your time in business does not mean as much as you may think. Sure, it's nice to have a consistent presence, but this does not mean that your patient won’t be curious. We're all susceptible to be enticed and in time surrender to an exciting product or service. Do not fool yourself into believing that your patients will automatically come to you.
Remember, your number one job is to create raving fans! A clear model of the benefits of a defined patient retention strategy is the Disney Corporation. When most people are asked about their experience at the park, they respond with “It was incredible!” They often overlook standing in long lines, the hot, humid weather, or ever-rising ticket prices. This trusted customer experience that has allowed Disney to have an attendance growth over 30 years.
Walt Disney figured out that he wasn't in the amusement park industry; he was in the magical experience industry. The goal is, for a precious few hours, to transport visitors to a carefree time, without the concerns of the world.
Walt noticed, in his visits to other parks, that trash was thrown on the ground. He deduced that people would only walk so far to dump their trash. That's why, at every Disney park, trash cans are never more than a few yards away from visitors. The facilities are remarkably clean. This is a minor miracle when you consider that millions visit Disney parks every week. Also, Disney parks have over 15,000 speakers placed throughout the parks. Therefore, when you're near the jungle rides, you hear jungle sounds. When you're near Adventureland, you hear stagecoach and horse sounds in the background.
Mr. Disney didn't want to merely be better than every other amusement park. He wanted to be 100% better than everyone else. He had a very clear message, and a precisely defined "what," "how," and "why" they're in business.
As mentioned earlier, there’s a strong connection between communication and leadership; those who lead can clearly communicate what they believe, and those can clearly communicate what they believe are the ones who lead.
In this case, returning customers trust the Walt Disney brand. They know what to expect when they plan to visit for the coming summer.
If you still believe you have a better mousetrap. If you believe your patients are hugely loyal and would never leave you --- no matter what; that is fantastic! I hope this turns out to be an accurate assessment!
The flip-side to that position lays with all the companies that used to be household names but now are no more! In fairness, there are multiple reasons why businesses close their doors. The point is that no one is impervious to joining the long list of organizations that no longer exist.
* Remember PaineWebber, Compaq, Woolworth’s, General Foods, Arthur Andersen, Standard Oil, or TWA? They were once household names but not anymore. This brief list takes us on a nostalgic walk down memory lane. We reminisce about some companies that made a big name for themselves but didn't stand the test of time.
The primary takeaway is that clear communication and commitment are the cornerstone of every successful business strategy. They begin by placing your core "why" message in front of your patients. Identifying your patients' specific medical needs and providing solutions for treating them. Also, you must inspire them to follow you and your vision. Create a substantial experience for them.
Your competitor is always watching to capitalize on any possible faux pas! All this reminds me of the famous quote by Christopher McDougall:
Every morning in Africa, a gazelle wakes up, it knows it must outrun the fastest lion, or it will be killed. Every morning in Africa, a lion wakes up. It knows it must run faster than the slowest gazelle, or it will starve. It doesn't matter whether you're the lion or a gazelle-when the sun comes up; you'd better be running.
Finally, you must realize that your advertising and promotion are not those necessary expenses you make to generate perspective patients. If done correctly, they are investments in your clinic's future.
When you take the time to promote your practice, make sure you focus heavily on those people believe in you. Always provide a crystal clear message interlaced with your "why."
Every company knows what they do for business and how they do it, and they focus on targeting new clients.
Instead, you concentrate on pleasing those patients who helped you get where you are today. Also, there's nothing wrong with rewarding loyalty. In fact, not only should you reward your patients' allegiance, you should shout from the highest mountain tops!
Your commitment and devotion to your current patients should become the cornerstone of your entire practice.
The point is, we've all seen or heard commercials from various companies offering new members exclusive discounts and incentives. In fact, I was recently in a department store (a national chain), and they offered to discount my purchase. All I needed to do was sign up for their credit card. I explained that I already had one. At which point, I was informed that the discount is only available to new members.
My first thought was "what about me?" After all, has not my patronage (and people like me) that helped keep the company's doors open all these years? Where's my discount? Where's my free calendar? Where are my loyalty points?
Never let your existing patients sing the "what about me?" blues! If you do, be prepared, pretty soon your patients will be stolen away by your competition.
“Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit.” Aristotle
We acknowledge that there is a lot to digest in this piece. However, for you to increase your profits and build your loyalty base, it's a non-negotiable item! Still, you may be too busy in your practice to devote the time and energy to create and develop superior communication pieces (aka your content). In fact, it may not even be in your skill set.
We would love to help!
We (our firm) have been directly responsible for many highly successful content marketing campaigns for several practices. In fact, we speak with a lot of disenchanted healthcare providers. Many times clients share with us that the process and outcome of their promotional experience weren't what they envisioned. Needless to say, they're not happy with the results either --- which is why they call us.
Hence, we would like to gift to you or your selected staff members, our proprietary 10-minute Content Strategy Audit Session (i.e., blog posts, social media campaigns, magazine articles, website content, patient newsletters, etc.).
We look forward to hearing from you.
From the desk of Claudio Gormaz, co-founder of StevenVonLoren Marketing Strategists, direct: 951.294.2274, personal email: email@example.com, Amazon Author Profile, Facebook, Google+, Instagram, LinkedIn, Twitter