Ladies and Gentlemen,
Welcome back to the “Good ‘ol Days.” Let’s begin our discussion on trends with 3 important unemployment rates:
- 4.4% – May, 2007
- 10.0% – October, 2009
- 5.3% – June 2015
There are naysayers suggesting that many people have dropped out of the work force entirely, that in their particular area of the country times are still tough, or that competition is hurting results. Regardless of those beliefs, those dropping out of the work force are not typical elective medicine shoppers or have enough expendable income not to work. While many areas of the country struggle, they still struggle far less than 6 years ago. And competition has always existed and population growth coupled with procedure popularity has almost always eclipsed competition volume growth over time in elective medicine. Despite the anecdotes and justifications, the economy is broadly doing quite well and on par with a decade ago. Humbly submitted, we would argue that if a practice is down in sales in 2015, it is doing it wrong.
Having just returned from several major multi-specialty meetings encompassing plastics, facial plastics, ophthalmology, otolaryngology and dentistry, in the midst of watching our clients have their best year ever, here we discuss the observable trends we see across elective medicine in 2015, stemming from the positive overall trajectory of the economy.
- Staffing is difficult and expensive – As less people are on the market, the problem of finding superb talent is compounding several-fold. The dearth of people seeking work is the first challenge. This lack of supply increases the average pay being demanded, a second challenge. And on top of that, most of the candidates are taken so one must pay more, while deciding quicker, among less options, who are less impressive. Get ready to pay the piper or settle for less. As perhaps the industry’s only true staffing agency, we continue to find superb candidates, but they are often needles in a haystack or diamonds in the rough. Click Here to read our President’s most recent blog expanding upon this topic.
- Spending to tread water is the new normal – A common complaint from practice owners is that they feel they spend thousands just to maintain business, not grow it. A recent client in the northeast mentioned he has had to spend around $5000/month on SEO just to keep his lead counts even from a year prior as his competitors invest more and more. He mentioned it feels like the “internet version of a nuclear arms race” where nobody wins, but everybody spends. This is spot-on to a great extent. The most successful doctors, while remaining prudent in how they spend, are investing in SEO, small to medium sized Pay-per-click campaigns, microsites, ratings and reviews specialists, online chat organizations, mobile-friendly website overhauls, social media, and even areas most doctors think of as taboo. Indeed, doctors in smaller markets are buying billboards, investing in radio, print, or television advertisements, and are seeing success. So is the take away to spend, spend, spend? Not quite. YellowTelescope preaches that a practice should “shoot bullets, then cannonballs” as Jim Collins teaches in his book Great By Choice. The takeaway is that the best doctors are carefully reinvesting to create separation – not from their peers whom they barely can keep up with, but rather from new doctors and practices nipping at their toes who cannot compete financially. Like the Tour De France, it is ok to not be in first place, but you do want to run with the front-running pack of cyclists. This is the nature of competition and it is time to compete.
- SEO has been re-branded – The ridiculous mantras about how “SEO is dead” and the re-naming of SEO as “Inbound Marketing” or “Agency Services” etc. does not change the reality. SEO is not dead and SEO (or whatever you wish to call the process by which patients find your practice through online resources) is alive and growing. The largest single-doctor practices in the elective space we estimate are generating over $4 million per year in revenue (and in some cases over $2 million in profit) just through online patient inquiries. Even in small markets, from Urbana to Clear Lake to Towson to tiny New Jersey townships, we are seeing millions of dollars generated through these sources. Those who read or buy into non-industry hype suggesting SEO does not work are simply misguided. Regrettably, the quality of SEO work continues to decline. As noted above, finding good people is getting harder and more costly, and that goes twofold for tech industries where there is a constant need for talent that cannot be filled. As tech company owners cut corners to save on costs, plus often lack staffing and management skills as “techies,” not professional managers, the small amount of cream rises to the top of the corporate American ladder leaving few great people to service small to medium-sized businesses. Great teams – just a few – remain and our sister company,SEOversite, helps doctors find them, but even without our help, and with sufficient work and time, you might get lucky.
- In-office conversion rates remain the main thing – We were once told to “keep the main thing the main thing” and we do exactly that here at YellowTelescope. The single greatest opportunity for growth, particularly as attracting superb staff and generating higher patient inquiry volume gets more onerous and exorbitant, is to convert a higher percentage of your inquiries into remunerating patients. The national average in-office booking ratio hovers around 15-20% with call back ratios after the consultation of around the same, meaning the average practice continues to schedule about 30-40% of the patients they see for surgery. 100% of our clients since inception have averaged 60-85% in-office booking ratios and this is one reason the average YT Long-Term Oversight client is on pace for over $510,000 in growth for 2015. As much as the trend is to push and invest for more patient inquires, the smart practices are realizing they are leaving, almost literally, money on the table, by not achieving higher closure ratios in-office.
- Alternative sources to improve website conversion percentages are needed – Assuming you are converting most patients in your office seeking surgery and services into paying patients, then it is time to get more patients. As Facebook, LinkedIn and other social media have started to charge fees for boosting visibility of ads, as more doctors compete for the same Google AdWords driving prices higher, and as SEO teams continue to charge more while providing less, smart vendors have cropped up trying to improve on-site conversion percentages instead of simply trying to drive more traffic to the site. These companies realized that for websites converting 2% of visitors into a lead, it is often much easier to make that number rise to 3% (a 50% increase in total leads each month) than to drive 50% more traffic to the site with the same 2% conversion rate. With that in mind, doctors are trending towards hiring onsite chat companies (be careful and contact us before selecting anybody as they are not all created equal), ratings and reviews companies (again, be careful and contact us before investing – we may not only be able to save you money, but also help you avoid picking the wrong teams or options), overhauling the visuals on the site, and investing more time answering questions online for well-respected groups like RealSelf, LocateADoc.com, Healthgrades, and others.
There is good news and bad news. The good news is that the economy is thriving and the outlook is strong for the coming year. The dollar continues to strengthen so international visitors will drop but local buyers will increase. The bad news is that these realities also help put money in the pockets of successful group and individual practices so competition will also increase. Doctors must retain their teams by treating them better and paying them more, while attracting new talent quickly by paying premiums over even a few months ago. They must reembrace online marketing holistically – SEO, pay-per-click, ratings & reviews, online chat, and other independent sites, and more – often just to “keep up with the Joneses.” And last, continuing to focus on “wringing the rag” and improving in-office booking ratios remains the single-most important, and profitable, trend in 2015 for doctors looking to grow their bottom line.