Although there’s a huge amount of noise and confusion around the different ways to grow your clinic, the truth is that there are ONLY three ways.
- Acquire new patients.
- Increase your average transaction value.
- Increase your patients’ frequency of purchase.
The problem is that nearly everybody focuses on “acquiring new patients” as the core (and only) way to grow their clinic.
Yet the other two approaches are some of the biggest catalysts that you have in your business that are easily controllable, cost hardly anything to implement, and can dramatically increase your revenue very quickly.
In this article, I’m going to share some practical real-world things that you can do to increase your average transaction value and to increase your patients’ frequency of purchase.
But first …
Let’s Look at the Math (This Surprises Most People).
Let’s apply some simple (and very rough) math.
- Let’s hypothetically say that you sell an average of 16 units per month consisting of eight brand-new patients and eight existing patients
- And each transaction averages $5,000.
That would result in 16 x $5,000 x the 12 months of year = $1m in revenue.
All make sense?
Now, let’s say that we wanted to grow your business WITHOUT increasing the eight new patients that walk through your door each month.
- Let’s say you increase your average transaction value by just $1,000 to $6,000
- And you increase the frequency of your existing patient purchases to drive 12 existing patients to purchase (four additional patients per month).
Just these simple tweaks of adding $1,000 to your average transaction value and having an extra four existing patients per month upgrading would push your revenue to $1.44m (a 44% increase!).
Yet based on your old model, to reach $1.44m in revenue with a $5,000 average transaction value and just eight existing patients per month upgrading, you would need to find 16 new patients per month.
Essentially, the fastest and EASIEST way to grow your revenue (and in turn, profitability) is NOT to chase new patients … but instead to focus on increasing your average transaction value and increasing your patients’ frequency of purchase.
Okay – let’s move on to the HOW.
How to Increase Your Average Transaction Value
In simple terms, all we’re looking to do is have patients spend more money … and naturally, we want to do this ethically and in their best interests.
Last year, I wrote an article called “Pricing for the Future, Instead of the Past” and it received a fair amount of hate in a few notable industry Facebook groups.
Yet this article shared why I believe many clinics are losing business to the likes of Costco and cheap competitors … in simple terms, it’s because most clinics package their prices horribly and give patients nothing other than price to draw a comparison.
Their pricing sheet lists a hearing device, a 3-year warranty, and their price … nothing else.
Can you really blame the patient for choosing to price-shop and deciding to go with a competitor who also promises a similar hearing aid, the same warranty, and a much cheaper price?
The way that you can pivot this is by better articulating and packaging all that you actually deliver as part of the transaction.
For example, look at the below.
This is one of our Inner Circle member’s “comprehensive” plans.
Note that it doesn’t list the manufacturer name or product, and note the number of line items that articulate what a patient gets as part of this package (outside of a device and a warranty!).
It means that when a patient is presented with this plan, they can understand and justify the dollar amount that has been attached to it, and it’s not an apples vs. apples comparison between this and a competitor.
Naturally, it results in more patients making a decision to choose you (growing your close-rate) and being comfortable making a larger investment because they understand what they’re buying and the value that they’ll receive.
This is one of the levers in your business that you can pull that will allow you to increase your average transaction value in exchange for repackaging your pricing.
It allows you to increase the value of what you’re delivering, which in turn increases your average transaction value.
Increasing Your Patients’ Frequency of Purchase
This is a little more tricky, yet if you can increase the frequency of patients purchasing, then it’s one of the fastest ways that you can grow your revenue without attracting new patients.
Here are two ways that you can do this (you should do both!).
#1 – Building an Upgrade Anchor
One of the ways that you can increase a patient’s frequency of purchasing new technology is by building an anchor into your timeline.
What I mean by this is creating a strong reason why they should upgrade to new devices every four years and creating a process that makes this regular upgrade a smart and simple decision for them.
A way that you can do this is by building a “Minimum Guaranteed Future Value” into your pricing packages/treatment plans.
This is a certificate that you gift a patient when they purchase new devices that articulates that they will receive a $500, $1,000, or $1,500 contribution toward upgraded hearing technology within 48 months.
Here’s an example:
This builds a natural anchor into the timeline that incentivizes them to want to upgrade before 48 months to benefit from this contribution, and by going past the 48 months without upgrading, they’ll miss out on this benefit.
It naturally builds talk tracks into your consultations at the 36+ month mark, and it ensures that you’re equipped to maximize your chances of having patients upgrade regularly.
#2 – Utilizing Extended Service Plans
This is hardly revolutionary, but if well implemented, it can be a great way to increase a patient’s frequency of purchase.
When a patient approaches the end of their warranty, you create a situation where the patient is required to make one of three decisions.
- They now pay out of pocket for ongoing appointments (the worst and most costly option).
- They can explore new technology with a new warranty.
- They can continue to receive your ongoing care by purchasing an extended service plan/continued care & coverage plan.
This ongoing plan is either an annual fee or a monthly subscription, and it allows them to benefit from such things as ongoing appointments, regular clean & checks, annual evaluations, etc.
Essentially, your in-house services!
Priced between $300 and $500 – it’s a way that you can get paid for your time, and you can build an extra revenue stream into your clinic aside from selling new devices.
The above are just a few simple examples of what you could do to increase your average transaction value and increase your patients’ frequency of purchase … and as I hope you can see, these are relatively simple things to do.
They’re at least much simpler than trying to find a bunch of brand-new patients every single month!
Whereas everybody else is focusing on desperately trying to find new patients to grow their clinics, consider how you can intelligently apply the above to grow revenue the smarter way.