Do you ever look back and think about the mistakes you made in your business? Do you have wonder how much money those mistakes cost you?
In this post, I’m going to cover 3 big mistakes I made early on in marketing my practice. If you’re just starting a practice or buying a new practice, you should avoid these mistakes like the plague. Even if you’ve been in practice awhile, it may be time to brush up on a few of these points.
Mistake #1. Not Measuring ROI
My first year in practice, I blew so much money on marketing that didn’t work. If an ad rep stopped by, and convinced me that his paper/mailer/service was good enough, I would give it a try. Then I would see how successful it was based on the number of new patients it brought in. So what was the mistake in this? I gave no thought to the quality of patient, their ability to pay (ever had marketing bring in all unemployed patients?), the referrals they generated, etc.
Here’s the point…if I just measured the marketing based on new patient numbers, I wasn’t getting the real picture. I would not be able to judge whether I should run this type of marketing again or not. What you need to do is measure every dollar that comes from that marketing piece in a simple spreadsheet. For more details on how to do this, check out my previous post “How Did Your Last Marketing Piece Do?”
Mistake #2: Not Understanding Lifetime Value
This mistake is closely related to mistake #1. Lifetime value of a patient is a phrase that describes how much money that patient will generate over time in your practice. (For those of you who don’t like to talk about patients as a monetary value, get over it ;), you’re running a business here. There’s a clinical aspect to practice and a business aspect. We’re talking business here.) How do you measure this? Take all the money you have collected in your practice, and divide by the total number of new patients you’ve seen. You could go back 1 year or 10 years, but the further you go back the more accurate the numbers will be. Some doctors also refer to this as the “case average” value.
Why do you need to know this number? Because it tells you how much you can spend to get a new patient. If your lifetime value is $5000 for every new patient that walks in the door, how much would you spend to get that person as a patient? I’ve heard coaching groups say “Never, ever spend more than $100 to get a new patient!” Where does that number come from? If I spend $300 to get a new patient that brings me $5000 in revenue, isn’t this a good business model? Yes, not everyone spends $5k, some spend less, some spend more. That’s why it’s an average. Figure your lifetime value of a patient and start using that number in your decision making.
Mistake #3: Not Focusing On Condition Specific Marketing
This one will bring the controversies in chiropractic out. No matter, it cost me a ton of money early on in practice and it’s important I tell you about it. If you don’t think chiropractors should market to or even talk about symptoms, you’re in big trouble financially. People have problems. People want solutions to their problems. You can’t sell new patients on wellness. You can teach them about it once they are patients, but you aren’t going to gain most people’s trust trying to sell them something they don’t want.
Now this doesn’t mean you can only adjust that area of complaint, only take x-rays there, etc. That’s not what I’m talking about. But you should market to new patients that have specific problems, then analyze and take care of them the way you see fit. I tried to market and sell my patients wellness, and while I did convert a few patients to care, it almost bankrupted me. Most patients just thought I was speaking a different language and not listening to them. Needless to say, it didn’t take me long to correct this mistake. Educate your patients about wellness once you have them getting better and they are on their way to correction.
While these aren’t the kind of mistakes that get you into trouble with the law or your state board, they are stupid business mistakes that can cost you thousands of dollars and even put you into bankruptcy. Make sure you don’t make them in your practice and you’ll be much more successful because of it.