Issue #38 – You May NOT Grow In 2017
“The economy just hasn’t rebounded yet, but we are still growing organically by 20% each year.” We don’t think this statement makes much sense, yet we often hear similar sentiments from prospective clients. Believing that the economy is still bad or that your practice is growing by simply waking up and going into the office are contradictory, believed simultaneously by many, and both incorrect in our view.
We are not suggesting everything is looming doom and gloom, however it is important to note that the economy is currently doing better than at any point in the last 8 years. Unemployment is as low as it has been in nearly a decade, a level maintained for nearly a year. Under our tutelage, our average client last year grew by over $300,000 with some clients growing by well over $1,000,000. But as a counterpoint, we also do not believe practices grow “organically,” as though magic grew the beanstalk. It took real work, sweat, and the occasional tear in most practices to achieve those results. Growth during a strong economy is a challenge. Growth during a weak economy is even more challenging, but very possible.
Between 1945 and the late 2000’s, the average time between recessions was a little under 5 years (Wikipedia). It is safe to assume that the next recession is coming soon. It might be in 2017 or might not be for a few more years, but after nearly 8 years of movement north, what goes up will, sooner or later, come back down. How do you prepare your practice to break even or grow in a weak economy, while not being so risk averse you compromise the potential for even stronger growth should the economy remain strong? Here we explore a concept we believe will insulate your practice from economic volatility and set you up for continued growth.
Build a Full-Price Medical Practice
If you have heard us speak about “The Patient Phone Call”, you know we strongly believe in differentiating the practice through showcasing the doctor’s accolades and reasons your practice provides the highest level of patient care. This builds value in the mind of the patient, an important step in the patient conversion process. Once value is built, you have the ability to ask for full price, and be comfortable saying no to a discount. We believe, regardless of the location of your practice – we have clients from Beverly Hills to Baltimore, Toledo to New York City, Denver to Dallas – there is a large subset of your community who see the value in high quality medical care. Creating a practice with the mindset of being a full-price medical practice is based on educating patients on why they should select you regardless of price. We don’t know about you, but our staff is not looking for the buy-one-get-one LASIK surgery, have an inferior augmentation to save $400, or go to a dentist for Volbella in our lips to shave a few dollars off the price. We have been educated on the value of high-quality medical services, and are willing to pay more to have them to ensure the best possible outcome with the lowest possible risk.
You might point out that not everyone is as educated. You’d be quite right. We see two solutions: 1) you can discount prices to compete or 2) ensure you take time to educate callers and still win the business. Imagine if, instead of offering 20% off your services for the month of January, you had this conversation with patients:
“Barbara, I completely understand money is an important consideration. We are certainly not the cheapest option around. And to be fair we are not the most costly either. With that said, we really believe that when it comes to medicine, surgery, and outcomes that affect how you look and feel for a lifetime, it is simply one of the last places to cut costs. Buying a cheaper cup of coffee or eating out less, sure…but not sacrificing your medical care. Now if you don’t feel we are a superb option, that is one thing, but if you love the practice and feel we give you the best possible chance of the best possible outcome, we hope you’ll agree with us when we say that you deserve the finest in medical care, which is what we offer to each and every patient. How might you like to proceed based on this?”
By building value and educating patients you are pivoting the conversation from price to quality of care. Throughout good and bad economies, we have seen that the highest performing practices are relatively-bulletproof because they develop clientele who shop for and purchase quality, not the best price. Understand your value and do not be afraid to stand by your prices and even occasionally raise them, once your staff is taking the time to have the right conversation to really educate the patient.
Reduce Reductions and Discount Discounts
While offering a small price reduction for a last-minute surgery or treating our teachers, firefighters, and repeat patients to a courtesy may be good business, it is very different from having a policy of discounting. If you send an email every month or quarter and the majority of it is about current deals, you have a discount practice. If you have large dips in sales after a special ends, you have a discount practice. And if you find yourself with a discount practice, expect a large loss of clientele when the next economic hard time approaches. Start the process now of reducing and then eliminating discounts, as it will take a year or more to change the culture.
Once you go from being flea market to Bloomingdales you will have built your value and should be able to not only withstand economic uncertainty, but be poised for growth. For more information on how YellowTelescope can help your practice successfully educate patients to understand your practice’s value contact us at firstname.lastname@example.org.