Podcast Transcription - The Quickest Ways To Hidden Cash In Your Practice
Hello and welcome to yet another episode of the business of hearing podcast and in today's conversation, I'm going to share the quickest ways that you can find hidden cash in your practice. I'll share where it is hiding and best of all, you can find all of this hidden cash without extra space, extra staff, extra resource. This is all hidden in plain sight. You just need to know where to look so let's jump straight in.
Welcome to the Business of Hearing podcast with me, Oli Luke, the podcast for entrepreneurial private practice hearing care clinic leaders, the ones who set benchmarks of excellence, build wildly successful businesses, grow their impact and navigate the choppy waters to spearhead the future of private practice hearing care. Thank you so much for joining us. Pour yourself a cup of tea and let's get stuck into this week's episode.
So welcome back. Thank you so much once again for joining and if this is the first time, where the hell have you been? And it's a pleasure to have you. Sounds a little creepy that to have you here. This idea and concept for this podcast has started because my wife decided that we need a new bathroom so we're in the process of having a new bathroom or at least getting quotes for a new bathroom and we went to a very reputable local bathroom company and we told them what they wanted. They came out, they measured up, they went away, they did the designs, they presented us the designs and guess what? We've not heard from them since. There's been no follow up. There's been no ongoing communication. They've put a quote out, they've gave us a proposal, they've put the ball in our court and then they're either busy elsewhere or they have no process in place to follow up and it's just a very simple way of them leaving so much money on the table because although it's expensive, I have a few questions and I believe there's potential room there to do a deal and make an agreement but I don't want to be chasing them right now. I've got other options so it's in their interest to follow up, and it's like a simple marketing foundation, right? Follow up, follow up, follow up. Many people don't make decisions within the immediate moment. They need the follow up in place. They need the touch point, the check ins, et cetera and there's some crazy stats out there about the number of follow ups that are usually required in order to get a sale over the line and it's significantly more than zero, let me assure you of that and it made me thinking like this business, this bathroom installation company are leaving an obscene amount of money on the table by not having a simple follow up process in place to ensure that when somebody is presented with a proposal, they are then at least set up with a follow up meeting, follow up conversations, text messages, emails, some form of systemized process to ensure that they can maximize the number of people that then go on to make a decision because just because somebody doesn't make a decision straight away doesn't mean they're not interested. It means they need to consider the decision. They've got questions, they've got potential objections, they've got thoughts that are pinging around in their mind and let's apply this to our industry. It's not a simple yes or no decision. There's a lot of emotional baggage attached to making a decision and this bathroom company is leaving so much money on the table and it got me thinking like, as a private practice hearing care clinic, where are you leaving money on the table right now? And I want to talk through seven big areas where money is likely being left on the table. They may not all apply to you but I'm confident that at least one will and let's start with the example I've just shared, right? Bathroom company gives out a quote, gives out proposal. Customer wants some time to consider their options. They have no follow up process in place. What does this sound like? Well, this is tested, not treated, tested, not sold, right? Patient comes to you, you present the options. You say, this is how much it's going to cost for the treatment plan. Are you ready to move ahead with this? They say no. They say, I want to speak to my loved one. I want to do some more research. I need some time to consider my options. They walk out the door. What process do you have in place from a tested, not treated perspective? And a better question than that is how many people that walk away from a tested, not treated perspective return and continue to make that investment with you? And if you don't know that number, I think that's a little bit of a concern because I feel that's one of the quickest, easiest, most leverageable ways that you can start generating more cash without having to add significantly more resource to your business because let's just look at this. It's a very reasonable request for somebody to make. If somebody comes to you, they're concerned about their hearing, they're slightly unsure. Within a 60 to 90 minutes period, you test their hearing, tell them that they definitely need hearing aids, may talk to them about the cognitive challenges of not moving forward with this treatment and say and it's several thousand dollars today, are you ready to do this? I think it's pretty reasonable for that person to walk away and go just okay, let me just consider this. You're not just asking, can I make a $7,000 decision today, you're asking, am I ready to become a hearing aid wearer? And that has emotional baggage attached to it, especially to younger patients. We spoke heavily about the boomer market. That's a hard one for a lot of people to take and a big pill for people to swallow because to become a hearing aid wearer, there's almost some form of admittance or at least some difficult situation that somebody's got to put themselves in to admit that okay, I'm aging, I'm getting old, my ears aren't working and given the stigmas that exist that connect hearing technology typically with old people and I'm saying that in inverted commas, it's a difficult one for somebody to take so pretty reasonable for them to walk away and want to consider their options, do some research, talk to others, et cetera. Now what should you do in this instance? What would a utopia tested, not treated process look like? Well, how would you like to be treated like if you went, let's say you went to a dentist, they told you you're going to need maybe some pretty dramatic work, and it's going to result in maybe you wearing some braces. I don't know, insert your example, right? But it's a several thousand dollars decision. It was going to impact your day-to-day life pretty significantly. How would you want them to follow up? And in my mind, this isn't, here's the coupon, here's the coupon, come and return. It isn't just checking in, just checking in, checking in. This would be education and I'll share what approach I believe you should utilize. Based on the data we've seen, is first point of contact is a personal message from you or the provider that they saw, which is just a, thanks for visiting. No, it can be overwhelming. Empathy is what we're aiming for here. No, it can be overwhelming. You may have some questions, you may want to consider your options. If there's anything I can do. If you'd like to speak to any of our existing patients that have been in a similar position to you, we're here to help like that education piece, just give them that reassurance. Super, super nice. What else would I follow up with? Well, this is education like the second communication should be, look, given your situation, there's many people that have been in your shoes and they typically have a number of questions. Below I've listed them questions and shared the answers. Questions being what are the differences between buying hearing aids through you versus like a lower cost Costco option, et cetera? Or it could be what happens if I don't treat my hearing loss? Or is there potential payment options? You could list many of the objections, concerns that people have and almost overcome those FAQs. What would be the next communication? Well, let's show you people that have been in a similar position to you. Here's five stories with different patients that are sharing their case study of the concerns that they had. Whether it was vanity, whether it was the investment, the decision they made to progress with treatment and how thankful they are they did. You could have this arc of series that is educational-based with follow up phone calls scheduled in order to be helpful because your job is to ensure that they make the best decision for their long-term hearing health. It's not to sell a set of hearing aids and with that being the core focus then you're going to approach this very differently but most practices have little to nothing set up. It's maybe some terrible systemized emails that came with their OMS system. Maybe we know we need to do something and it happens manually but we often forget or it doesn't take priority but that is a key one, especially if depending on the percentage of patients that make a decision on day one. If you've got 20, 30, 40, 50 percent of patients that don't progress on day one, that is the simplest thing you can build into your business that will have a dramatic difference to how much cash that you can generate and it is hidden cash in your business. What are other areas that I'd consider? Here's a simple one like reducing the number of no shows and cancellations and I was speaking to a practice not too long ago that this is a big, big challenge for them. They get a lot of no shows and cancellations and as you explore that a little further, there's a variety of reasons for no shows and cancellations. The simplest one is how much intent and why did the original person choose you so if this is a Facebook advert, for example where they click a form, 1 minute they're watching cat videos, looking at Taylor Swift and whatever else people do on social media, and then they see an advert about booking a hearing test or trialing some hearing technology, they click an ad without knowing Facebook has automatically filled in their info, they click confirm and it submits an inquiry to you and you're calling them for an appointment. It's understandable why they would be more inclined to be a no show because they've almost been lured into scheduling a hearing test. It's not been done with a huge amount of intent. That versus somebody that's searched on Google, done their research, done their due diligence, made a decision that you're their person, is well researched and ready, then they're more likely to turn up for that appointment, right so you've got those kind of metrics. Aside from that, there's other things that are far more in your control. What is the pre appointment experience? The phone call when they schedule that appointment. How is that expectation set? If it's done well, then the front desk is trained to know how to handle this. It's okay. Yeah, we can get you scheduled. I've had a look and I can see that Dr. Smith is available for that time. Dr. Smith has been working here for 15 years, helped thousands of local people to achieve better hearing. There's not an awful lot that Dr. Smith doesn't know so very fortunate to have space on her or his schedule. We'll get you scheduled with them ahead of the appointment. There's a few things that you need to know so make sure you turn up ten minutes early. If you do need to reschedule, please, please let us know. Dr. Smith's time is in high demand and apart from that, we look forward to seeing you like if you can set that expectation, pre-sell the experience and the provider, they're going to see, they're going to be more inclined to show up. Similarly, what are the emails and communications that happen prior to that appointment to ensure it's not forgotten and prioritized? It's like all these little things make a big difference but if you're doing the work from a marketing perspective, to get somebody scheduled, if you're getting 10, 20 percent no shows cancellations, putting these things in place that become an asset to your business once it's trained, once it's built, once it's implemented, is a phenomenal thing to do. What else? Well, what about the number of people that proceed with treatment, right? This is one of the easiest almost KPIs to measure and you could call it close rate. I'm sure there's a whole host of other rates. You could call it in any other business, this would be the close rate in the medical business we find ourselves in. That's probably a dirty term but let's look it as close rate, right? How many patients that turn up for an appointment are a candidate for hearing aids? Actually, walk away having chosen you and are progressing with treatment through you. Now, what can you do to improve that? Well, of course, there's pricing. How do you position your pricing? How do you explain, what's the consultation process? How do you ensure that you're uniquely positioned as the provider that can provide the solutions towards that patient? And how well trained are your team in terms of delivering those options? Making a recommendation, overcoming objections, building rapport, all the foundations. That's an area that should always be the focus, right? Looking to improve that number but it's clearly a number, sorry, clearly an area where there's ability to leverage. If you can improve that. There's two other key numbers that you should keep your eye on when it comes to finding hidden cash in your business. Increasing the average order value is an obvious one and increasing the average lifetime value is another that I believe is not spoken about enough so let's tackle the first one. Increasing the average order value. This is what somebody spends with you, essentially, when somebody comes and makes an investment with you, how do you grow that number? So if the average is $6,000, how'd you get that to $7,000, hypothetically? That's what we're looking to achieve and that's a difficult one. There's a lot of nuances attached to it but I think this depends on your consultation process and we've got a member that I was speaking to that's changed up their consultation process and I'll explain what they've done in a moment and it's made a dramatic difference to their average order value and what they do is when a patient comes in, they don't make a recommendation for any low or mid-level technology. They simply state thar and I am paraphrasing here, they simply state that, look, my job is to get you the best solution which typically means the best technology and the best care plan so let me introduce you to that and then you help me understand if your budget doesn't allow that and we can move backwards like just simply setting it up with that so you always introduce premium first because that is your job. Your job is to help them to the best of your abilities and give them the best solution and then their budget restraints are what's going to work it backwards so if you can utilize that form of approach, could you improve the average order value? Because let me assure you, if you can boost that by $1,000 per transaction. You run the numbers, right? You do 20, 30 transactions a month. Hypothetically, times that over the course of a year, 30 transactions, it's an extra $360,000 at the end of the year. That is money in your pocket. It is pretty much profitability, given that it's just extra margin that you weren't collecting anyway. Big amount of profitability, right? But these are the metrics that don't mean you need a bunch of new patients. You can fix the numbers within the business in order to find hidden growth. The other one is naturally understanding lifetime value. This is one that I don't think many practices understand and many businesses understand but I think it's one of the most important metrics that you can focus on like how much does a patient spend with you in their lifetime? Because let's say you can run the numbers, and if you're an older practice, you have the ability to do this. But if it's free transactions at an average of $6,000 then if it's $18,000 per patient, an average lifetime order value then that becomes very interesting because you now know you can spend more to acquire a patient. If you acquire a patient today, you know that's an $18,000 acquisition of a patient that you've just made and all of a sudden, you can spend more. From a marketing perspective, you understand the numbers much better, and you know the importance of caring for that patient when they're on transaction one, transaction two, et cetera but understanding those numbers and looking at how you can improve them so average order value, average lifetime value like how do you keep your hands in that patient? Make sure they don't get lured anywhere else? What's your ongoing communication with them to ensure they become an ambassador of the business, a brand advocate, love what you do and you will only ever be their provider. That's a super key one and naturally that ties to increasing the frequency of purchase like how long exists between upgrade periods? Is it six, seven years? Is it four to five years? Because you truly get to set the narrative of what that is and set the expectation of a patient, and build a patient journey and patient flow that creates what normal should be and if your objective is to ensure that patient always has the best performing technology, that's delivering the best levels of hearing for them and their loved ones, then increasing upgrades more frequently is probably the right thing to do and then there's one big metric that I think is majorly underutilized and not focused on but has a significant amount of value and that is reducing the number of patients that are overdue an appointment. Now, patients that have not seen you in 12, 18, 24 months, there's a big, big risk for them, right? And that risk is you may see them as your patient, but they probably don't see you as their provider and what that means is when they do need new technology, you can understand why they go, well, I am going to utilize Costco, I am going to utilize a lower cost solution because I don't need all of the care right now because I'm a more experienced hearing aid wearer. You need to keep your hands on them and every few months, every six months, every twelve months, you should be looking at that list and going, who are the patients that we've not seen in too long and how can we get our hands back on them? Like many of our inner circle members have just run a spring clean focus campaign to that segment right now which is an invitation back through the door for a kind of deep clean and check, a preventative maintenance check. That's where I'd be considering but these areas, whether it's reducing no shows, whether it's improving, that tested, not treated rate, improving your close rate, average order value, average lifetime value, frequency of purchase, reducing the number of patients that are overdue an appointment. These are those metrics in your business that if you can do these in the right way, apply focus to them and build the processes and systems that allow these to be improved across the board. This is going to compound so beautifully for added revenue and added profitability and you do it once and you're in a good spot, right? This isn't a case of need more space on the schedule, need more staff to do so, need more resource or even need more new patients. These are those internal foundations that exist in your business and these should be the KPIs that you're focusing on tracking and if you can do that, then you can improve it. What you can't measure, you can't improve, right? So the more you understand what those numbers look like the more you can start to build actionable things into place in order to improve those numbers and get more of the outcomes that you're looking for so I hope that's helpful. This all started naturally because we need a new bathroom, as my wife has decided and now, I'm in the nightmare of trying to get quotes and realize that nobody follows up and everybody's quotes are pretty terrible and they're badly positioned and I look at these lessons and then apply them to our industry of how we can do better but hopefully that's helpful. Hopefully there's just one action that stands out there where you're like, I need to check on that or I should do that and if that's all that you get out of this, then that has been a big success because you'll build something into your business that will just improve some numbers by a few percent and that few percent is going to result in extra margin and profitability at the end of the year so get busy, there's work to do. Appreciate your ears, appreciate your listening and I'll speak to you again soon.
And there we have it but before you head off to skip to the next episode or eagerly await for next week's, I have three things for you. First of all, if you've enjoyed what you've heard today and want to learn more about our exclusive inner circle to discover how 60 plus clinics are setting benchmarks of excellence in private practice, benefitting from a mastermind of North America's most successful practice owners and having an industry leading marketing team driving gold standard implementation, then go to www.orange-gray.com. That's orange-gray. There's not only a video there detailing how you can win in the next two decades in private practice but it also shares a downloadable PDF with no ask for email address or anything like that, that will explain exactly what becoming a member looks like. Second of all, I strongly feel that private practice is in a very challenging spot right now, where we're the David fighting against Goliaths, made up of large groups, manufacturer owned chains, Costco's and whatever the next heavily funded Whizbang online direct response consumer model will be. I'm a strong believer in a rising tide lifts all boats and the more private practice can fight back at scale, the bigger impact will make so please consider a friend, a colleague, or even a Facebook group, a LinkedIn group, etc. where you can spread the word about this podcast and third and finally, it may be a little thing but a five-star review hitting subscribe will ensure you automatically download all future episodes and help the algorithm to grow the impact of this podcast and at the very least, it will certainly put a smile on my face when I go and look at the numbers so I look forward to talking to you again next week. Thank you for your ears and I'll speak to you soon.
