Part 1 of 3-part article our candid look at: Do we really need new patients?
Do you really need a bunch of new patients through the door every day to succeed? I ask this question because every dentist I speak to says new dental patients guaranteed is their road to success.
In life before the dental industry I managed 75 sales managers who in turn managed 1,400 life assurance sales people throughout Australia and New Zealand. The average consultant with five years’ experience has about 500 clients, that’s about 700,000 clients in total, and they did everything possible to maintain close contact with their clients.
Why? Because they knew from experience that if they reviewed their policies annually by just 15 per cent, their budgets would be met for the year. It was a “soft sale” because they had a relationship, and best of all, they received FREE referral business from these clients by just asking for it.
Insurance companies spent millions educating their sales people to the importance of recall effectiveness (although it wasn’t called that then). They did whatever it took to keep their clients: cards, flowers, chocolates, etc, all in the name of staying in touch. They were the best in the world at it, as I am sure many of you have experienced.
The interesting point is clients were categorized into three types: A, B, and C. It’s all about moving them up to A. As you moved one to A, you filled that hole with a B, and when the C moved up you found a new one and started over.
Simple, but most effective, and it’s still the same today. The crazy part, we asked for referrals and they willingly gave them.
When we created “The Drill Guys” in 2000, we researched the market and listened to what dentists wanted. “Better, more efficient handpiece repair experience.” So, we delivered a unique service whereby handpieces could be repaired at the surgery using a world-first mobile repair service vehicle enabling 40-minute turnaround, which revolutionized the business.
Using that successful life assurance sales philosophy, we created a new internal role “Customer Liaison Manager” with a single task of growing and staying in touch with our whole data base every six months, including creating newsletters, emails, telephone appointments and whatever it took to stay in touch.
Each new client was asked to provide one referral if they were happy with our service. Over the next 10 years our client based grew to 3,000 dentists regularly using the service.
Not much has changed over the years.
We all face the same problem, which is not so much how to attract new patients to your dental practice, but how to effectively stay in contact with our patients or clients. We still must address the same issues – even with practice automation software we still don’t get the results we pursue.
It’s amazing how many consultants charge a fortune and insist you focus on new business to survive. If you look after the existing business you already have, new business will follow.
“Just like day follows night.”
One recurring issue in every dental practice visited, is the size of the data base viz a viz the appointment book. When you are selling your practice all astute buyers ask to see the appointment book along with the P&L sheets, and many deals have been lost at that point.
Why should that be?
Once you open the appointment book and see empty spaces everywhere, the buyer will inevitably ask why that is so, especially when you have such a large data base of patients. There are two possible answers, and neither are very good.
These are major issues that don’t get the attention they deserve. Too often the practice is overly concerned with acquiring new patients, while paying little attention to servicing those it already has.
“Lack of follow-up means lost revenue.”
There are plenty of consultants offering to fix these issues, but in my experience, prevention is more cost-effective than cure.
There is no universal fix as each practice is unique. There are, however a basic set of rules, when implemented, produce an increase of 30 to 65 percent in activity and revenue.
Reappointment and Recall Effectiveness relates to how well you manage your customer base. Nearly every dental practice has some sort of recall management system that allows it to keep in touch by post, text, email and phone.
The system is intended to give the practice an effective “call to action”, thus facilitating an increase in recall effectiveness, which some accounts suggest runs as high as 80 to 85 per cent. Whether those figures are true or not, someone still must do something to make it all happen.
“If this figure they express is true, why is the average less than 35%?”
Most Australian and overseas practices tend to be understaffed. Consequently, most staff don’t have time to do the necessary follow-up. Larger practices may have this covered, but the majority – the one-to-three chair surgeries – don’t.
What are the answers?
First, consider what you are really looking at to better understand the entire matrix. One needs to step back a bit and consider what’s going on in the average practice. From all the research that is available, reappointment effectiveness is worse than is generally portrayed. The 85 per cent figure does not bear scrutiny in most cases, and usually applies to practices that are less than three years old, in my understanding.
I know from first-hand experience that some practices have less than a 30 per cent recall rate, and it doesn’t take Einstein to work out where that is going to lead. The real question is: why is it left to fester like that? I don’t for one minute believe that it’s because these practices are not doing a good job.
Let’s focus on an established two-to-three chair practice that’s been around for a long time. Perhaps they have new owners, or maybe the present owner is getting close to retirement and is slowing down. “Be assured, I see this all the time.”
The sad point here the principal has been looking after their patients forever, and in some cases upwards of three generations going there. But as time goes by people move away, some die, others find dentists offering better prices or more complex dental care, therefore leaving the patient database not up to date. A classic example of why a dedicated coordinator would have this situation under control.
Next Part2: We take a look at a real practice turnaround from a revenue base of $475,000 to over $1,000,000 in 12 months
If you are interested in reaching out for more information on the topics covered, whether you’re in the market to sell your dental practice right now or just want to explore the best exit plan options for a future sale…click the button below to schedule a free consultation
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