Monday, October 29, 2012

How I Made Every Mistake In the Book and How You Can Avoid Doing the Same

Ten Hard-Won Marketing Lessons (and One Warning)
by William Howard Horrocks

In nearly ten years of working with dental practices I've made every marketing mistake you can make. Twice. They are probably the same mistakes you're making now. Hopefully I can help you avoid at least some of them. Here, stripped of any fluff, are some lessons I've learned the hard way.

1. Generally speaking, people will not travel from a "higher'' economic area to a "lower" one for their professional services.

They will buy other things like clothing and household items from stores located in the lower economic areas, but they will usually not hire an accountant, see an MD or go to a dentist who isn't in their same economic area or higher.

If your practice is located in a part of town that has a middle to lower economic status you might think that all you have to do is send mailings to the "better" area to draw people from that area to yours. It sounds perfectly reasonable, but I've never seen it work that way. And I've tried it many times. So don't waste your money, it won't work.


The higher rent/lease payments for the better neighborhoods are worth it. If your area is considered low class (e.g., the housing projects are nearby) then move. And do it now. Don't wait 10 years to discover the truth of what I've just told you.


2. If your town or region slips into a depression or recession then move immediately.

I know it's expensive, I know your spouse and kids will not want to leave, I know they've got a nice life and friends and church and all that but I'm telling you I've seen this over and over again. Don't wait, it will just get worse.

Move now, take the financial and emotional hit and rebuild your practice and your lives in an area where you have a fighting chance.

You can try to hang in there until your neighborhood or town bounces back but what if this takes 10 years to happen? Why be miserable for ten years?

Do you know that I've sold thousands of my books to dentists all over the country, (the world really) but I rarely sell any books in and around Las Vegas, Phoenix or anywhere in the Southwest? It's even more rare that any of my clients come from these areas. I asked a dentist I know from Las Vegas what could be going on. He said it was because these areas have been undergoing an explosive growth over the last decade or longer. They simply don't need my help because they are doing fine on their own.


Most dentists, chiropractors and other professionals in Las Vegas have all the patients and clients they need.


So, if Long Island's economy is down, you might enjoy a great life in the Southwest. The weather's better too.


3. As with the differences in economic areas, a similar pattern of behavior exists in a geographic sense. People will not usually cross bridges, freeways or other natural or man made boundaries to receive their professional services.


I don't know why, but having to take a bridge across a river to go to the dentist is just not something people will do.


Again, I'm not saying this is always the case - this is a generality - but it's something I've observed over and over again. So when contemplating a relocation of your existing practice, or the opening of your first practice, it would be a good idea, in addition to any other demographic or population flow studies, to also consider the geography of the area. Where do the patients you would really like to attract reside? Look at all the avenues and approaches these people will have to take to arrive at your practice. You should get in your car and drive these routes yourself. What will they have to drive over or through to get to you? Will they have to drive through a gang-infested area or over a bridge? What about crossing a freeway or railroad tracks? These are all serious no-nos.


Also don't forget to discover how the general population regards the different geographic areas in your city. For example, I've lived in Seattle my entire adult life. I know there are certain parts of town that I not only wouldn't live in but don't like to drive through either. Nearly every city of any size has these areas. The locals know where they are. If you don't (maybe because you're new to the city) then I would encourage you to find out so you don't locate in a part of town that few people will want to visit.


Be suspect of a "great deal'' in rent or lease payments. There's usually a very good reason a landlord offers low lease payments and it's almost always because the neighborhood is bad and he can't charge premium rates. Otherwise he would, don't you think?

You may indeed be getting a great price but you will pay for it with low patient flow and deadbeats, which will ultimately cost you much more than you will ever save in low rent.

4. Don't be "slick." Be professional.

Even as verbose as I am, this is a hard one to explain. Words are my life but I'm not sure I can communicate this clearly. There is an important truth here but it's hard to put into words. Here goes:

The tone, flavor, and "color" of your promotions, ads, brochures and indeed all of your marketing, has to be such that you don't subconsciously exclude your target market (the unintended message of an expensive looking piece).


Your ads, mailers and brochures should be professional but not "slick." Slick turns the majority of people off, even the ones who can most easily afford you.


The message is: don't be slick, be professional. Don't be aloof, be accessible.


5. You can break the rules if you have a good reason.

I have a client who has the most impressive CV you've ever seen. He's studied with the best, he's taken every continuing education course you can imagine. He has been educated and trained at the top schools on the planet. He has been published countless times and is THE dental consultant for a major magazine that you all have in your waiting rooms. Hell, he's even been on Oprah! Yet he has been told by other marketing people that "the general public doesn't care that much about your background, so don't even bring it up." This is true often enough that it might even be a "rule" but in this case my client's CV was actually a huge plus. You see, his target market happens to be a group of physicists, corporate executives, and physicians. They are all very well educated and affluent people. They want someone who is on their level, who is as proficient in dentistry as they are in their fields. So we promoted his unique qualifications with terrific results.

Break the rules when it serves you and don't shy away from or deny what can be your greatest strength to your target market.


6. You can get so hung up in labeling yourself that you can unintentionally turn away a large segment of your business.

Let's say you want to be known as a cosmetic practice. You seek only patients who want porcelain crowns, veneers and the rest. You won't go near an amalgam or a kid. You turn your practice into a "dental boutique'' and change your name to "The Center for Esthetic Dentistry."

This is all fine and good. I actually have plenty of clients who are doing just this and I've been quite successful ill helping them to attain such a practice. But realize it's a much smaller market than the "family'' practice. A mother, in choosing a dental practice for her family, does not want a dental boutique. She wants a playroom and friendly staff who will tickle her kids and give them coloring books.


If you want only to be a dental boutique then be willing to give up much of the Mom and the kids market. Many of my clients have made that choice and are doing well but realize that's a lot to give up.


Another approach might be this - have a playroom, give out the coloring books and position yourself as a family and cosmetic dental practice. You can still refuse to use amalgam but you're not stuck under a label that tells your public that you only do one thing.


A dentist called me the other day and said he was worried that people wouldn't know that he also did root canals.


He correctly perceived that his marketing had too narrow a focus and was costing him a good portion of the family market. So be careful how you label yourself. You could label yourself right out of the market.


7. The best, most cost effective and highest return on investment marketing you and your staff can do is summed up in just two words: Be friendly.


One of the first things I do with a new client is have him or her survey the patient base. The information garnered from a good survey can be quite revealing. What we mainly want to know is why these parents chose this practice and not the other one down the street and why they keep coming back.


After surveys on thousands of dental patients from all over the country I can tell you the answer to both questions is nearly always a variation of, "because the doctor and staff are friendly.''


People buy things from friendly people and say good things about them. They recommend their friends, slap you on the back, trust what you say, follow your recommendations and bring presents to your kids. They do none of these things for the unfriendly.


8. Don't be afraid, just call them.

Being friendly can translate into all kinds of activities but probably the best action you can take along these lines is to call all the patients you've seen that day. Call them at home to see how they're doing. Dentists think it's intrusive and therefore back off from doing this but the patients don't see it that way. They love it.

Also, try this. In addition to calling your patients after you've treated them, why not call them before their fist visit? This will allow you to establish some kind of rapport with them even before they come in. If they are able to gain some familiarity with you before they actually arrive, the first visit usually goes much smoother and they are less likely to blow off that all important first visit.


Here's something so axiomatic that if you don't see its truth then you may need to plug the nitrous leak in your hose and observe a little longer:

Your income is directly proportional to the amount of attention you pay to your patients and potential patients.
Think about this for a while you may have a startling realization.

9. Should you give anything away?

We've all heard a hundred and one dental truisms - those little pieces of information that become platitudes. Like, "something free isn't worth having.'' Or, "ask a patient to pay a dollar and you get a dollar patient.''

I don't totally disagree with these but you should know there are definitely times you may need to offer a freebie. Offering anything for free is risky, but there are times when it could be the right thing to do. Ninety percent of the time I advise my clients to use offers which require the new patient to pay something. Having them pay will make them value it more. Make the exam and consultation free but charge $29 for the x-rays. Charge $19. But generally don't say "FREE'' or $1.


But there are exceptions to this and I know many dentists who are very successful in giving away something. When is the right time to do it? The key is, "who am I talking/writing to?" If you're offering a free exam and your mailing is going to a neighborhood full of apartments, then it will be a disaster. However, sending it only to the more affluent neighborhoods will probably net you some good patients. So, the rule is: know your audience.


[By the way, I wouldn't ever offer a free cleaning. You'll get patients who have more calculus than teeth and they usually won't want any dentistry you recommend. A free or reduced fee exam is OK for selected audiences but not a free cleaning. We've had a lot of success with offering reduced fee teeth whitening. In fact one of the very best offers we've had our high end or "boutique'' type clients use is free teeth whitening, but to get it patients must first receive a full exam and x-rays and teeth cleaning at usual (not discounted) fees. After that they can get the complimentary whitening. You also have to include a disclaimer such as, ''some patients may require urgent care treatment before teeth whitening.'' This covers you in case the patient's teeth are so bombed out that you can't even fit the bleaching trays.]


Do not let a platitude direct you. Instead, let testing be your guide. Your offer, be it a freebie or a reduced charge, is something to test. Try it on a limited number of households. Then try it the other way. Then see if you're happy with the quantity and quality of patients from each test.


10. About Mailings.

Life is a very patient teacher, it keeps repeating the same lesson until you learn it.
If you plan to mail anything to anybody in any kind of quantities, the following advice will help you. This data is very hard won. It took me years and many dollars to finally get it. There aren't very many people who know what I'm about to tell you.
The single biggest reason for failure when you're sending direct mail is that the pieces never get sent. I will tell you right now that you can expect the post office to dump up to 17% of the mail you give them.

It's a sad fact but, based on my experience, I'm absolutely certain of this.


Many government postal workers don't care a whit about your mail or if it ever arrives. This is especially true of bulk mail because they know that no one will complain that they aren't getting enough ''junk'' mail. So, it gets dumped. It's like the old Ma Bell slogan popularized on Saturday Night Live, - "We don't care - we don't have to."


What can you do?

This is going to sound paranoid but this is exactly what I do with my own mailings. If you hire a lettershop or mailing service to affix the address labels and do the stuffing and so on, DO NOT allow them to deliver the pieces to the post office. Many of these shops operate at such narrow margins (because people like you and me squeeze them so hard) that the only way they can make any money is to cheat. They will hand you a post office receipt that says 30,000 pieces got mailed but what they don't tell you is that only 15,000 of them were yours. The other 15,000 belonged to another of their clients, whom the lettershop is also cheating.

Do you see how it works? So have the shop deliver the mailers to you. You then count them and transport them to the post office. Do this even if you're convinced that your lettershop is honest (and there are plenty who are, but why take a chance?).


As to the post office you'll find you have less control over whether they actually mail your pieces, but I do the following with my mailings.

Don't use a big, busy post office that has a ton of employees. Find a very non-busy office, even if it's out of town. A small operation is what you want. Go at a non-busy time and meet the people there. Be friendly. Ask questions about bulk mailings as though you don't know how it works. Tell them you're preparing a large mailing and engage in some friendly chitchat but DON'T tell them you're afraid they're going to dump your mail. Just be a nice guy or gal so they will treat you in a like manner. If possible go in several different times and mail some letters or buy stamps or something so they can get familiar with you. Then when you do drop off the pieces make sure you do it yourself. Do not send a staff member. In fact it would be better if both you and your spouse go together.

I have a client who even went a few steps further. He sent all the workers in his local post office cases of a popular micro-brew. This turned out to be a big hit with all of the people in that office. Do you think they'll now dump his mail? It's unlikely.


I know all this sounds weird but what the hell, we want to make sure they get mailed. These little pieces of paper we're entrusting to the post office should each be viewed as actual currency. They are that valuable.


I know you probably won't believe what I've just said - that's fine - just follow my advice anyway. It will both save and make you money.


11. WARNING: Run like hell from anyone who says there's "no risk" in marketing.

It pains me to see people in my field (marketing or practice management consultants) who say things like, "100 new patients per month guaranteed no risk.'' Please don't fall for this pap.

It's embarrassing to have these people as members of my profession because they are simply and only liars or they haven't had enough experience to know what they're talking about.


Consider this: If marketing were an exact science or a rote procedure that anyone could follow with ease, then every business in this country would be flourishing.


But that's not happening, is it?


To tell someone that a subject (marketing) which contains inherent risks, is in fact risk-less, is unprofessional and is a falsehood.


To use a baseball analogy, in marketing if you do everything right you sometimes hit a home run, but more often than not you simply get some singles and doubles, which is usually more than good enough. But sometimes you strike out completely.


It's maddening but even when you do everything "right" you can still crash.


Results-oriented marketing depends upon testing, tracking what works and what doesn't, being persistent and avoiding stupid mistakes. It has nothing to do with "magic selling formulas'' developed by some Johnny-come-lately self-appointed "expert'' who has maybe one good idea but a whole passel of untested methods which will waste your money.


The marketplace is brutal and unforgiving. The possibility of failure is high. There is a learning curve and there are very few shortcuts. But in spite of all this, it's still possible to tilt the odds in your favor and win big. Just be real and don't go into it thinking it's without risk.


Got questions? Want to learn more? 
You can reach Mark & Howie at:
Howie: whh@newpatientsinc.com
Website: www.newpatientsinc.com 

Friday, October 26, 2012

10 Ways to Attract More Fee-for-Service Patients

10 Ways to Attract More Fee-for-Service Patients
by William Howard Horrocks


There are many marketing approaches you can use to get the patients you really want. But in my years of working with dental practices I've found that the following are consistent winners.
Start With Internal Marketing 

1. Talk to your mailing list and it will talk back.
Your first and most cost efficient action is to start with your patients. Marketing to those who are already familiar with you is easier and much more profitable than marketing to strangers (though you still need to do some external marketing). The bottom line: you simply must develop regular communications to your patient base.

This could take the form of a practice newsletter or simply a personal letter from you sent quarterly or, preferably, each month. If you don't yet have your patient list computerized, I urge you to make this a priority. Most software allows you to write one letter to your patients and "mail merge" this letter to hundreds or thousands of patients. Mail merge simply prints the name and address of each patient onto the single letter so your communication is more personal. It's easy and fast.

Don't make this complicated or expensive by thinking you need to hire a design firm to produce a four color, nine page magazine each month. A simple one or two page newsletter is just fine. You can upgrade the quality as you go. The important thing is to start sending something now. Internal marketing is about ''upselling'' which means selling more dentistry to those who are already buying dentistry from you. Someone who is already happy with your product can be sold more of it and more often. Both you and they will benefit tremendously.

One client of mine stopped sending his newsletter for several years thinking that it was too much trouble for too little return. At my urging he began sending it again and was surprised at the response. There were days he had 10 patients call to set appointments with each mentioning that the newsletter was what jogged their memory. He learned his lesson! The newsletter will never disappear again. 
 
What to Say
Educate your patient on teeth whitening, bonding, veneers, air abrasion, intraoral cameras, porcelain crowns, white fillings and a host of other dental topics. 

Cover one topic per month and be sure to give them a reason to call such as a limited time offer relating to that month's topic. Keep in mind; you can't just say that veneers are great or that inlays are better than fillings. 

You've got to tell them what veneers and inlays will do for them (correct stained, chipped and misshapen teeth and replace unsightly amalgams) while at the same time giving them a reason to call you now and not next year (''Call before August 1st and receive a complimentary cosmetic evaluation which will determine if veneers or inlays are for you.")

These letters or newsletters are not meant to take the place of any recall efforts you are already making. Your hygiene recalls are a separate operation, employing postcards and phone calls. The monthly letters or newsletters above are designed to provide information and benefits on major dental treatments and services as well as invite them to call and refer their friends and family into the practice. 

2. Seeking referrals. You can and should be asking for referrals from your existing patients.
This goes for the staff too. Over and over again I've proven to myself that the vast majority of patients are more than willing to help you. They are not put off when you ask them to help. However it's sometimes uncomfortable to simply ask. Why not give the patient something to take with them that they can pass along to their friends or family members? Hand them a dental health certificate and ask that they give it to someone ''Nancy, you're a great patient. Why don't you give this to one of your friends or someone you care about?''

It will allow them to receive a dental exam at an introductory offer. I recommend you make this handout more substantial than a simple business card. If it's too small or flimsy the patient may just toss it.

Give them something that looks like a check or a certificate. Make it look important (because it is.) When their friend or family member arrives (not just schedules but actually shows up) send the referring patient two tickets to a first run movie, or a restaurant gift certificate along with a personal note of thanks. Or send flowers, coffee mugs or something else people would value. Let's say you get referred a huge case that ends up being many thousands of dollars. You may want to reward the referrer with a $300 day spa or $500 Nordstrom shopping certificate.

Whatever you do the referring patient ends up getting a benefit, which means they are more likely to refer again. Send these rewards to their work address (not home). That way more people get to find out how generous you are. Bottom line: Don't let patients leave your practice empty handed.

3. Photos, photos everywhere. Before and after photos should line the walls of your reception area and operatories.
When people see the difference between a mouthful of amalgams versus ''white fillings'' while they are waiting, they'll be more receptive once they're in the chair. 

A before and after shot of a good veneer case with the caption, "Porcelain veneers - done in two visits'' will impress most anyone. 

Likewise with teeth whitening, a nice set of comparison photos make it much easier to sell this service. Also have photo albums of your best cases along with testimonials from the patients. They don't all have to be your patients either. You can describe veneers, whitening, inlays and bonding until you're blue in the face but it won't be half as effective as a good before and after photo. 

4. Educate and motivate.
A nice addition to your photo gallery is patient education on video or CD. Continuous loop video or a CD presentation on the benefits of modern cosmetic dentistry, running non-stop on your reception room, will not only distract a waiting patient but will also show them how good their smiles could look. The same presentations in the operatories will also raise dental IQ. You've essentially got a captive audience so whenever you need to leave the rooms, even for a couple of minutes, simply turn it on.

Remember, this is the video age, people will watch anything that's on a TV screen, especially if there is nothing else to do and particularly if it's right in front of them. 

5. Don't be afraid, just call them.
You've heard this before and will hear it again, from me. Call everyone you numbed that day. This is a simple phone call made the evening after treatment.

Ask them how they are doing, has the anesthesia worn off, do they have any questions, how does the bite feel and so on. You really want to know if anything is wrong so you can fix it right away - before they decide to go to another practice and bad mouth you. Some dentists think the patient will see these calls as an intrusion. This is simply not true. Patients, just like any human being, appreciate having attention paid to them. In fact, you could say that the degree you give someone your attention is the degree they give you their admiration and money.
 
External Marketing
Your practice can hum along quite nicely for a long time on a referral only basis. However some external marketing usually needs to be done in order to make up for natural attrition. Rather than go over old ground in regards to Yellow Pages ads or ValPak mailers I want to focus attention on other ways to reach the people who need, want and can afford the dentistry you want to deliver. 

6. Using the press.
Sending regular press releases to all print and electronic media in your area can help focus public attention on dentistry in general and your practice in specific. An earlier article discussed the correct way to prepare a news release. To that I can only add that it be done on a continual basis. Send so many that you become very familiar to all the editors in your area.

You can even get fax software that will store all the numbers of the editors and media outlets in your area so once you have your release written you need only press a button and it automatically goes out to all the editors in your area. 

The subjects you write about must be of interest to people and not simply an advertisement for your practice. But realize that what is old hat to you is new news for many. "Dentist Says Needle and Drill Nearly Obsolete'' is a great headline if you want to talk about air abrasion.

''Cosmetic Dentistry Demand Running High'' would be good if you want to talk about the increased interest in cosmetic dentistry. Any time there is national press attention about dentistry, take advantage of it on your local level with a press release. For example, the FDA recently approved the use of lasers for more than just curing composites. Now, if you have a laser then this bit of exposure affords you the opportunity to call attention to your practice. A nice headline might be, "Sioux City Dentist Goes High Tech With Newly Approved Laser."

But what if you don't have a laser? You can still take advantage of the national exposure by promoting what you do have and tying it in with the laser.

''Star Wars Era Comes To Dentistry'' could be a headline. The release would talk about the recent FDA approved laser but would then go on to mention other advancements such as miracle composites, air abrasion, intraoral cameras, multimedia presentations, computer smile design and so on.
You can create very positive effects for dentistry in general and your practice specifically with the use of press releases. It's also a very inexpensive way to increase your name recognition in the community. 
 
7. Develop an effective mailer.
Unless you're an experienced copywriter it would be wise to have an ad agency help you with this step. A mailing piece, professionally done, can be used for years. You don't have to have a high response rate for this to pay off. Even at less than one percent you can still be quite profitable. One good case will pay for the mailing, in some instances many times over.

To limit your risk and initial investment, first try an inexpensive postcard mailing. And don't be discouraged if it doesn't pull well right off the bat. Even though it's maddening, repetition is essential in advertising. You may have to try two or three different cards until you get one that brings you a decent response. If you ask an agency to design a mailing they will usually present you with three ideas. Ask them to produce the one you like the best, but in case it doesn't pull well get them to agree to let you use the other two ideas as tests. Test all three and settle on the one that yields the best response.

Target your mailings to areas near your practice, which are affluent enough to afford full care dentistry. You can also target people who have recently moved into your area. TRW has a great service called Redi Comps (800-345-7334), which will tell you about all the new homeowners in your area and the value of each property. This way you weed out the areas that are apartment heavy or are otherwise undesirable. This assures that your mailings get to your target market. There are other firms specializing in new movers specifically for the health professions.

Try ProMail at 800-258-0060 or your local mail list broker found under ''Mailing Services'' in the yellow pages. 
 
8. Give and Get Help From People in Related Fields.
Establishing a cross referral arrangement with a cosmetic surgeon, chiropractor, an upscale hair salon or talent agency will help you contact just the type of patient you've been seeking. With surgeons you call and ask if you can refer your patients and would they like to talk to you about this.

You can request to witness a surgery, and invite the surgeon to your practice to see what a set of veneers will do for a patient's appearance. With hair salons and talent agencies you can offer to whiten the owner's teeth in exchange for displaying your photo album and distributing your dental health certificates. Chiropractors are often open to this kind of referral arrangement. Choose a practice that is already doing well, not one that is struggling.

You could do an endorsement mailing to your patients about the other practice. The chiropractor could do a similar mailing to his or her patients about you. Include a certificate for an exam in each mailing. Establishing these types of relationships always and inevitably requires that you and your alliance partner become friends. You each need to have a genuine interest in helping the other. 

9. Get and Give Help From People in Unrelated Fields.
If your office is located amongst other businesses it would be a good idea to approach them and offer your services. One huge advantage you have is that you are near where they work. If you have extended hours they could come in before or after work. It's a great convenience for them. Point out this fact in a short letter or invitation. Have one of your staff hand deliver this invitation (which includes an offer of a reduced fee exam or complimentary smile evaluation) to each of the businesses surrounding your practice.

10. Stay Current.
Being perceived as up-to-date is important if you want to attract the kind of patient who seeks cosmetic and full care dentistry. You won't be viewed as cutting edge or even modern with a 1950s dental chair and chipped linoleum in your operatories. I'm not suggesting that you have to rush out and immediately buy every new toy or gadget that comes along. However, you should set aside funds throughout the year for major equipment purchases.

This also includes new treatments that are becoming increasingly popular such as teeth whitening and halitosis treatment. The addition of the latest treatments and equipment can also get you attention in the press, especially if you are the first in your area to acquire the new technology or you're the first to send out the press release. For example air abrasion is attracting attention all over the country because people are very interested in the prospect of no needles - no drills dentistry. The new hard tissue lasers fall into this category as well.

Staying current also refers to your continuing education. There are dozens of great courses and seminars that will help you sharpen both your clinical and management skills. Take advantage of them.

Of course these ten items aren't the only things you can do to attract the kind of patient you want. But these are effective, relatively inexpensive and have proven themselves time and again. Use them well!


Got questions? Want to learn more? 

You can reach Mark & Howie at:
Howie: whh@newpatientsinc.com

Website: www.newpatientsinc.com


Wednesday, October 24, 2012

Your Patient's Stories Can Get You More Patients!

How to get and use patient testimonials to attract new patients into your office.
Turn your testimonials into a powerful and convincing marketing tool.

by William Howard Horrocks

What is a normal/customary annual marketing budget for a dental practice? 


By “normal/customary” I will assume you mean a practice that's been in existence (and same location) for greater than 5 years. I will also assume you mean a “bread and butter family” type practice. For these practices, we encourage a marketing budget range. The range is 5% of TTM and 5% of goal revenues. As an example, a 600k (TTM) practice that has a goal of 700k should have a marketing budget range of 30k to 35k for the year. 

Startups: The average general dentist will require 700 active patient charts to productively support a 30 hour per week schedule. The average acquisition cost of a “quality” (see below) new patient ranges from $80 to $120. If the practice in NOT going to use insurance participation (see below) as a marketing medium, the practice needs to acquire all 700 patients through external and internal marketing. 700 new patients within the first year times an average acquisition cost puts the first year marketing budget at 70k. 

Transitioning Ownership: Dentists who are buying an existing practice can expect to lose a certain percentage of the existing patient base. At best, they can expect to minimize this loss at 20% of the existing patient base. In addition, existing patients who do see the new owner will almost always slow down their purchases of dental services during the first 18 months of ownership. This is the “getting to know you phase”. All of this has to be taken into account when determining the total number of new patients required to meet or exceed the new owner's revenue goals after purchase. 

Insurance Participation – What's the real scoop?
Insurance participation in dentistry is nothing more than another available marketing medium. Our firm is neither for nor against using insurance participation as a marketing medium. We just look at it in a very straight forward business manner.
Insurance companies use their sales/marketing prowess to accumulate 10,000 to 20,000 local employees through the employer base. The insurance companies then “sell access” of the patient base back to the dentist for 72 cents to 88 cents on the dollar. This marketing medium represents a 12% to 18% marketing “cost” to the dental business. Since we've already established that you can successfully market/promote a dental practice for 5% of revenues (in 96% of the markets in the US ), you can see the true cost of using insurance to promote the dental practice long term. 

Why do dentists participate with insurance or rely so heavily on participation for their new patient flow?
The short answer is, they don't know any better. As a CPA, I'm sure you recognize the business prowess of most of your dentist clients. Dentists are patient/clinical centric people. Very few understand or even want to understand business. Most dentists are also very risk intolerant. This is an important distinction.
Insurance participation is easy to do (you just sign up!)
There is no up front commitment (other than just being a dentist)
There is no up front cost (therefore, no perceived risk)
You mention “quality” new patient. What is that? 

First, let me give you the statistical definition of a “quality” new patient. A “quality” new patient is any patient that matches or exceeds the average revenue per active patient that the dental office currently enjoys. I'll give you an example.
Example Practice: 500k annual revenues, 1000 active patients, average revenue per active patient = $500. A “Quality” new patient for this practice would be a new patient that brings in at least $500 within the first year. 

IF a dental practice focuses their marketing/promotion toward higher “quality” patients, the first year return on investment will double every two years for a maximum of 6 years. Then, it will double again every 6 years. 
Dentistry is a recurring revenue business (as I'm sure most of you know). One of your clients' biggest mistakes is marketing/promoting for volumes of new patients to fill the schedule. Here's the lesson to pass on to your clients. Volumes of new patients temporarily fill your schedule. Quality new patients ALWAYS fill your wallet.

What is doc/patient ratio?
The dentist/patient ratio in a given market area is the single biggest analytical tool used when formulating an appropriate marketing plan for a given dental practice. We also refer to the dentist/patient ratio when we explain what our expectations are from whatever marketing we do for a client. The national average is 1 dentist for every 1500 people. If a dentist is in a 1:600 dentist/patient ratio – that dental practice will indeed have a VERY tough time gaining quality new patient momentum. It's just supply and demand. It's economics 101. I'm sure I don't have to explain this to this group. This does NOT mean you can't successfully promote a dental practice in this type of environment. The majority of our clients are in tough competitive areas. 

The other side (the fun side) of the supply/demand analysis is also found throughout the US . If we analyze a market area for a client and find a 1:4500 dentist/patient ratio, we KNOW we've got a great story just waiting to happen. 

A case study: In September of 2006, we helped open a new dental practice for a client in upstate NY. Dentist/patient ratio in their county was 1:5800. We started with a first year budget of 90,000. Female dentist, husband (with an MBA thank goodness) is the office manager. In December of 06, their production hit $85k for the month. We have them projected at first year revenues of $1.2m in their first year. I am not telling you this because we get this type of result with all of our clients. We DO get this type of result with other clients in 1:5800 dentist/patient ratio markets. What your clients need to understand is the power of supply/demand AND the beauty of dentistry as a business model. It truly is a recurring revenue, return on investment building business model. In competitive areas, they just have to give it the time to mature.
I hope the answer to some of these questions help you and your clients better understand how effective marketing works. If you have any other questions at all, please feel free to contact me. 

New Patients, Inc.
Mark Dilatush
VP of Professional Relations
866.336.8237
markd@newpatientsinc.com

Saturday, October 13, 2012

Dental Marketing - What to do between November 15, 2012 and December 31, 2012

What to do between November 15, 2012 and December 31, 2012

In the previous edition of this newsletter, we explained how to get set up for 2013.

In this installment of the newsletter, we will explain how to promote your dental practice between November 15th and December 31st this year.

Shut down your external promotion
Statistically, for the majority of dentists in the US, there is a very distinct increase in risk promoting dentistry to the dental consumer between November 15th and December 31st every year. Since one of our jobs is to help dentists minimize risk to their marketing dollar - you've been warned. The only reasonable and statistically justified exception to this rule is if your dental practice is in a "snow bird" area with a population that is predominantly above the age of child bearing years. Some of you may be in areas of Florida (to use a recognizable example), where you may or may not want to promote to the consumer between those two dates. For the rest of you, shut it down!

Ramp UP your internal promotion
As drastically as you shut down your external promotion, in an equally drastic fashion, you should ramp up your internal promotion. Let's explore some marketing projects that should be scheduled during the last quarter of 2012.

Use it or Lose it
For those patients with dental insurance, it is certainly a time to let your patients know that their anniversary date is looming and they will lose this year's benefits if they don't come in. Many dental practices send some variation of this concept to their patients once at the end of the year. Why are you only sending it once? If we were to guide you, we would send this piece (either through the mail or electronically) a minimum of three times. The right times would be the third week of October, the second week of November, and the end of the first week of December. We don't know why dental practices only send these once, but most make that mistake. Don't think for a second that ALL of your patients read or listen to anything that you send them once. Don't assume that everyone is just choosing not to respond. It is FAR more likely that they were simply too busy to pay attention the ONE time you sent them the message. Send it multiple times.

Charity/PR
The holiday season is the season of giving. OK. So give!
Run an overdue re-care list (or labels, or emails if you have them) of every patient in your database that was due for their re-care up to Jan 1 2012. In other words, the literally hundreds or thousands of established patients that you would really, really, like to re-activate! Tell them if they come in for their cleaning and exam between November 15th and December 31st, that you will donate $20 on their behalf to a locally recognizable local charity. For instance, Alex's Lemonaide Stand is really popular here in the northeast. You may have a different local charity that everyone recognizes within your market area. We are SURE the females in your dental practice know of a locally recognizable charity that will resonate positively with the majority of your patient base. Reactivating established patients for $20 a pop is an absolute win-win-win. Charity wins, patient wins, you win. If we are managing your website and your social media, get our internet department the information for your charitable event. We will blast it all over your various social media outlets.

Pedo - or Pedo/Ortho
Mom is home. Kids are home. We almost don't want to mention this because quite frankly, it can work gangbusters in some markets, and in other markets all you hear are crickets. But it is worth mentioning. Any time the kids are not in school (like winter recess, spring recess, summer), it's a good time to reach out to your patient base and offer them premium appointment times (convenient ones) to get little Jane and Johnny to the dentist for their checkups. We know some of you are wincing right now. Who in the heck wants to work on a bunch of kids the week between Christmas and New Year's Day? Well, we understand. But (you knew it was coming), mom is going to have to bring Jane or Johnny. Mom may need work. Dad may have never seen you before. Mom may have a mother or father nearby, or a friend that is looking for a great dental practice. Treating children is an important consumer demand. Children are the gatekeepers to the rest of the family and everyone the rest of the family knows. Ignoring it is certainly your choice. But those who embrace this consumer demand will be that much better off down the road.

As always, if we (NPI) don't handle your promotion for you, you can learn the most effective ways in our latest book. We also have 7 hours of online CE for you to learn from. Of course, if you'd like us to build you a marketing plan for your practice, at no cost or obligation to you, we can do that as well. Just click this link and share information about your dental practice. You will get your marketing plan emailed to you in 4 to 5 work days.

Got questions? Want to learn more? 

You can reach Mark & Howie at:
Howie: whh@newpatientsinc.com

Website: www.newpatientsinc.com