"This isn’t fun anymore."
That’s what Bill said to me as we were sitting in his office at what appeared to be a thriving practice in Central Ohio.
The office was immaculate. The front desk team members were friendly. The assistants were top notch and Bill was regarded in the area as an excellent practitioner.
You see, everyone loved Bill. He’d been in private practice for 14 years, had a loyal patient base, and there was always a “good word” to be heard about Bill in the community. And for a long time, that was enough. It was enough to have a thriving, growing practice where there were few problems, sizable revenue, and loads of fun, enjoyable days at the office.
For years, everything seemed to fall into place. Sure the practice wasn’t perfect, but marketing and business operations weren’t really anything that kept Bill awake at night. Looking back, Bill could see the breakdown wasn’t an overnight thing. It was a gradual shift…little things every week, every month, and every year that led to minimal growth and stagnant profits.
Hearing Bill tell it, the answer to the problem seemed obvious…marketing.
Bill wanted to pump some money into marketing (with no real plan), hoping that it would start to drive new patients and give him a quantifiable ROI. But hope (aka spray-n-pray marketing) isn’t a viable marketing strategy.
Sure his website traffic ticked up a bit and the marketing team he hired sent him some fancy charts, but that was about it. He certainly couldn’t tie any spending to revenue.
This is when I told Bill something that (I think) threw him for a loop, especially coming from a “marketing guy.” “Bill, marketing may be A problem, but it isn’t THE problem.”
I went on to share with him a lot of nerdy marketing and operations stuff that might just bore you to tears, but is critical if you want to stop bleeding revenue, grow your practice, and start to enjoy practicing again.
I won’t give you all the details, but below are 6 critical points you must understand and get right if you want to take a stagnant practice to an unprecedented level of growth. These are the “secrets” that the top 1% of practice owners know, but don’t discuss publicly.
This is the same “formula” I used to accomplish the following results at practices all over America:
- Grew a 1.2 million dollar general dentistry practice to a 2.4 million dollar a year practice, where the dentist now focuses on implant procedures and actually works FEWER hours...by design.
- Turned around a $700,000/year practice focused on general dentistry and turned it into a 1.4 million/year practice that pulls patients for family and cosmetic dentistry from 50+ miles away.
- Transformed a small practice in an upscale suburban market from $800,000/year to $2 million/year by marketing aggressively in the #1 overlooked honey pot where most dentists overlook!
- Tripled "Internet Collections" for an oral surgery practice in 14 months.
- Turned a suburban $700,000/year practice into a renowned 1.6 million dollar office.
I don’t expect you to believe this just because I’m saying it. You’re an accomplished doc and a smart man or woman. That’s why I’m pulling back the curtain and showing you exactly what my company, Killer Shark Marketing, has done to turn these practices around.
Hint: We don’t focus on low-level ghost or “vanity” metrics that don’t matter, but instead focus on hitting grand slams and building systems that can be implemented at scale for quick and sustainable growth. By the way, you can read more about our philosophy on ghost metrics here.
If you’re not ready to challenge your assumptions and grow, I encourage you to go ahead and click the back button now. Growing your practice with Killer Shark will mean thinking differently, getting uncomfortable from time to time, and ending once and for all "this is how we've always done it."
This isn’t for 95% of docs…it’s for the 5% who treat their business like their baby and will put in the work required to grow, create a thriving practice, and be a thought leader within your area.
This is how you join the top 1% of practices…so let’s get started:
1: CPA (Cost of Acquisition)
Whenever I have a chat with a new client, one of the first questions I ask is, “So tell me, how much does it cost you to acquire a new patient?”
It’s at this point I usually get the proverbial “deer in the headlights” look because most doctors, dentists, dental practice managers, surgeons, etc. have no clue.
Or I hear something along the lines of, “I know some of it is working so I just keep doing it all. It seems like it usually shakes out favorably for us.”
Listen, if you’re reading this right now and thinking to yourself, “that sounds like my practice,” then I want you to know something...it’s not your fault.
If you had wanted to be a “marketing guy or gal” or an “operations guy or gal” you probably would have gotten your business degree.
But you didn’t.
Your passion was (and still is) helping patients become or remain healthy and you shouldn’t get derailed from your mission. Even though I know you’re the kind of person who is really intelligent and can figure out most things, this isn’t something you can take a swipe at and afford to get wrong.
Think about it…
If you knew beyond a shadow of a doubt that you could trade $1 in marketing for $4 in new patient revenue, wouldn’t you do it?
When you know that your marketing funnel consistently and reliably gets you new patients economically, at that point, it simply becomes a matter of “how much can you handle?” and “how do we scale?”.
When you get to that point (which many of our clients have), we can have some really interesting and exciting conversations!
If your practice has capacity and you are “buying” patients economically (you cover all your costs for that new patient in year 1 and still are profitable with that new patient), then why would you stop “buying” them?
When you know that ALL of your marketing is working (no waste), and that it is seamlessly aligned with effective operations, a very predictable (and successful) outcome emerges where acquisitions costs are known and they’re profitable.
2: Production Per Visit
It’s no secret that all appointments and treatments aren’t created equal. From a macro standpoint, you have to increase your average annual revenue per patient (AARPP, more on that below), and in order to do that, you have to raise the bar with regards to increasing the production per visit for yourself and your team.
This metric is revealing in that it illustrates the staff and doctor’s true output. It’s sister, KPI (production per hour), similarly shows how well the team is truly performing. After fixed costs, every dollar of production often nets $.80.
So then you need to get the answers (we can help) to the following questions:
- What is your team’s production per hour?
- What is your team’s production per visit?
- Are you presenting enough treatment (we’ll discuss upselling and cross-selling complimentary treatments in more detail below)?
- Do you heavily promote financing options (such as CareCredit®)? Auto dealers sell a lot of cars because $617/month sounds a lot better than $40,000 bucks out of pocket; there’s no reason your practice can’t do the same!
Always remember there is a “seesaw” relationship between production per visit and the quantity of patient visits. If you’re earning more revenue per visit, then you don’t need to see as many patients to hit your numbers. If your production per hour/visit is lackluster, you’ll have to make up for it with volume.
I know you enjoy being a doctor … but honestly, who wants to see more patients and not make more money? That’s just silly!
3: Are You Losing $35,000/Month at the Front Desk?
I’m very passionate about this particular issue because it may be the “one dial” you can turn to increase revenue faster than anything else. Optimizing your FDCR (front desk closing ratio) is the 80/20 rule in action.
Be honest with yourself…is your lowest paid and least trained person holding the keys to your financial fortune?
While that may seem a little drastic and over the top, based on our data, it simply isn’t.
In our study of thousands of phone calls across every dental specialty, the “fumbles” that occur during prospective new patient phone calls are staggering. If you know the lifetime value of your patient (most practices don’t) then you should recognize that these mishaps are very costly.
Case in point:
We recently worked with a relatively small dental practice to optimize their call tracking and FDCR. Obviously, the first step to optimization is evaluation so we started by recording and analyzing calls, and then grouping them into buckets.
No joke…in less than a month, this relatively small practice in a city of less than 8,000 people had lost an estimated $35,000 (conservatively) at the front desk.
That’s $400k/year gone in a tiny market. If you’re in a medium- to large-sized market and your front desk team members are not trained to produce, I’ll promise your stomach will turn when you find out how much you’re losing per month.
Your front desk person(s) should be trained as an appointment booking machine (and if he/she is good, give them a bonus and an extra week of vacation to keep them happy…they are worth it)!
While you may have tried call tracking before (or maybe you’re doing it now), it probably isn’t being done at the level that leads to meaningful change.
(Warning: shameless plug coming...)
At Killer Shark, we use a very sophisticated call tracking system that will truly “change the game” and it’s the same system that detected the massive profit leak for our client mentioned above. If you’re interested, just reach out and let us know!
4: Upselling and Cross-Selling Your Current Patients to Increase AARPP
“Would you like fries with that?”
Those 6 magic words add millions of dollars every year to McDonald’s bottom line. While you probably have no desire to set up a french fry stand at your practice, there’s a valuable lesson to be learned here.
Every business should have upsells.
This simple sales strategy transcends every industry. If you’re not applying the “would you like fries with that” strategy to your practice, then you’re missing out on opportunity and revenue.
After all, your Average Annual Revenue Per Patient (AARPP) is a true gauge of your practice’s pre-appointment and recall systems, as well as treatment presentation and acceptance. If you have a decreasing AARPP then you’re creating a headwind for the practice, requiring more patient appointments to meet production goals.
But when you upsell correctly and ethically, you can flip that headwind 180 degrees, which results in a tremendous competitive advantage (and more revenue) for your practice.
By simply asking patients if they are interested in learning more about other high revenue services you offer that can benefit patients, you’ll close a percentage of them and likely create a six-figure windfall of revenue (annually) that you would not have otherwise captured.
5: Do Patients Stay (A Lesson on Churn Rate)?
Getting 20 new patients a month is irrelevant if you’re losing 22 a month. You can’t have 2 people coming in the front door and 3 people going out the back; that math doesn’t equal long-term success.
Nevertheless, many practices are “hungry” for new business, while oftentimes ignoring their established, loyal database of customers.
Big…huge…gigantic mistake (and deep down you know it).
While any business should always be trying to bring in new clients or customers, it’s imperative that you do everything you can to keep who you already have. The number one way to do this is to make sure your patients always have a positive, upbeat experience at your practice that they’ll want to share with friends and family.
After all, it is less expensive to retain existing patients than to go out and earn a new one. The longer they stay with you, the more opportunity for referrals and positive vibes to their circle of friends and family.
Hang on to what you’ve got by providing an outstanding patient experience and staying in communication with your patients in between visits (a newsletter is great for this). Just 1% increase in retention (which is a decrease in attrition) is worth thousands of dollars to your practice.
So know your churn rate and implement systems (we can help) to lower your churn rate so you retain more revenue while stacking new patients on top.
6: Does Production Match Collections?
Imagine you’re a contractor and you just remodeled a bathroom for $15,000. Only, you never got a check for that $15k.
You produced $15k worth of work, but you collected zilch.
Aside from being quite upset at getting hosed over a decent chunk of change, it’s likely your operational cash flow has been crippled a bit by the jerk who didn’t pay his bill.
Well, medicine isn’t much different.
Obviously you have safeguards in place to minimize these sorts of things, but at the end of the day you probably have a significant amount of patients who owe you a significant amount of money.
And did you know that an increase in collection rate by 2% in a $1,000,000 practice adds $20,000 to the bottom line? That’s nothing to sneeze at (and will pay an assistant's salary for 6-8 months most likely).
If you want to grow your practice and thrive, you have to collect the money you’re owed. Understanding the operational cash flow cycle is critical and the practice should emphasize all parts of it including accounts receivable (what % is over 90 days?), adjustments, and refunds/NSF items.
I’m just going to come out and say it...marketing companies share all kinds of metrics that don’t matter in the hopes that they can make themselves either look good or confuse you to the point that you just assume they know what they are doing, and you’ll keep paying them.
If your practice is truly ready to go to the next level (and you, the doctor, has come to terms that you must spend money to make money), I encourage you to contact us for an interview to determine if we’re the right fit. We don’t just want more clients, we want the right clients.