R&D Blog

The R&D Blog is a forum for manufacturers to share their latest research and news, but more importantly is a place for readers to comment and discuss new developments with them. Above all, it is a forum for opinions, questions, and discussions about hearing aid technology between manufacturers and hearing healthcare professionals. Submit an article for the R&D Blog by sending it to the editor at HJ@wolterskluwer.com. Articles should be no more than 1,500 words, and will be reviewed and edited before posting. Readers may submit comments, which will be moderated, by clicking the link below.

Tuesday, March 13, 2012

Maximizing Your Practice’s Revenue in a Tough Economy

Maximizing Your Practice’s Revenue in a Tough Economy

By Mikkel Knudsen

A bad economy and fear of a recession have made selling luxury items, such as hearing aids, a tumultuous task over the past few years. Selling something most people don’t want can be stressful, especially when advertisements and direct mail marketing efforts aren’t pulling in new patients. The search for advertising’s silver bullet is on.

Knowing your return on investment is the closest you can get to a silver bullet. Understanding the cost of acquiring a new patient is as necessary as balancing an investment portfolio to maximize returns. Tracking these efforts on a regular basis will help determine which media combination provides the best front-end cost (expense) and the best back-end value (return on investment).

Cost of Acquiring a New Patient

Several great office management systems are available, such as Sycle and BluePrint OMS, that can automate this important task. If you don’t have access to an electronic office management system, you can calculate the return on investment yourself. Take the sales (gross or net) achieved from a marketing event, and divide it by the cost of the piece that was used to generate sales. If the sales were $30,000 and the cost of advertising was $5000, your return on investment is $6. For every $1 spent, $6 was made.

You now have a ratio to use as a marketing benchmark. This will help make an educated decision on whether to reallocate other marketing expenses into vehicles that generated the most income, maximizing your profits.

The return on investment will always vary based on the media you’re using. Marketing tools can be cyclical, so doing this exercise regularly will provide a fresh snapshot of where you’re getting the highest return. You’re playing darts blindfolded if you don’t track your marketing efforts; your chances of hitting a bull’s eye are slim, and you’ll make a lot of holes in your wall(et)!

An Underutilized Goldmine: Your Patient Database

The dreaded D-word — database — creates an image of compiling entries from boxes of dusty, old manila folders filled with inadequate patient information. So why would you want take on the overwhelming task of organizing your patient database?

Cultivating relationships and staying in touch with coworkers, family, and friends is a huge part of one’s personal life. The popularity of social networks such as LinkedIn, Facebook, and Mylife are a testament to that. It’s human nature to want to relate and connect with people.

Internal marketing studies performed at ReSound have shown the average cost of acquiring a new patient, depending on the size of the market, can be as high as $800! The cost of retaining an existing patient is $37. Most successful practices understand the importance of maintaining patient relationships based on this contrast.

You worked hard to build your practice and, along the way, spent tens of thousands of dollars on marketing to build your patient database. Now that it’s built, what are you doing to ensure your investment stays healthy?

The majority of successful practices communicate with their patients three to four times per year. Most office management systems have a tracking system in place that shows the number of incoming calls (call ratio), appointments booked (call-to-appointment ratio), total sales (close ratio), average price, and return on investment.

Lack of Patient Response

This is where a lot of practices miss out on opportunities. Wouldn’t you make a phone call to a friend or family member if they didn’t respond to your letters or emails? Patients don’t respond for a few common reasons.

• The patient has moved or is deceased. This is an unfortunate consequence of the demographic of hearing healthcare practices. The post office can notify you if mail is not delivered, but you must mark it in your file.

• Hearing aids are working well. Great news! But the patient should still come in once a year for a checkup, which will give you a chance to retest his hearing, make minor adjustments, and clean and check the device.

• The letter was misplaced or the patient forgot about it. This happens more than you think!

• The patient is dissatisfied and stuffed the hearing aid in a drawer. You’ve most likely lost this patient, and he will tell at least 10 friends about his experience, which reflects poorly on the industry and you.

• The patient went to another provider. Don’t you hate it when a longtime patient comes to see you, and he’s wearing a hearing aid different from the one you gave him?

Are you capturing your initial investment’s full earning potential from mailing to patients? The average patient will buy a new hearing aid about every five years. If your average patient is 70 years old, he will purchase at least three to four more sets of hearing aids in his lifetime. Shouldn’t he buy those from you?

Minimizing a Missed Opportunity

Your goal should be to stay on your patients’ minds, which can be done easily with a little effort. Sending out letters is the first step, but an important second step is to call patients who don’t respond!

Reaching out through phone calls shows you care. Your patients, because of their age, may not text, email, tweet, or use Facebook. They are used to face-to-face communication, handwritten notes, and phone calls. Calling your patients adds a level of intimacy they will appreciate.

A simple phone conversation can verify receipt of your letter and ensure patients don’t have any questions. This is also an opportunity for patients to set up appointments. Not only will you be amazed by the positive responses, but an increase in appointments will validate your efforts.

Getting Started

Extract information at the beginning of the month from your office management system, including patients’ birthdays, patients with hearing technology that is three years old, patients who haven’t been in your office for at least one year, and patients you have tested but who have not purchased aids. Keep a copy of all mailing lists by the phone to track responses. During week 1, mail birthday letters that provide incentives for patients. The next week, mail letters promoting newer technology to patients who have three-year-old devices. Call patients who haven’t responded to the birthday mailing to stay in touch, wish them a happy birthday, and remind them about the extra incentive.

During week 3, mail reminders to any patient you haven’t seen in one year. Call patients who haven’t responded to the previous week’s mailing, encourage them to come in for a demonstration of the devices promoted in the letter, and suggest making a maintenance appointment for their current device. The next week after that, mail letters to patients you tested that month but did not sell to, offering a second visit with some sort of incentive. Call the patients who haven’t responded to the reminders from the previous week. In the first week of the next month, prepare a list of patients for the month and repeat the process.

These steps will ensure consistent communication with your patients without overdoing it. Your weekly efforts can be followed up with a phone call to nonresponders. Remember, you could potentially lose these patients if you do nothing! An open house or a special event may increase appointments, providing a steady flow of patients at an advantageous return on investment without booking appointments too far in advance.

Time to Take Action

A key part of this plan is to have someone in your office make the follow-up phone calls. Giving out rewards to staff members who generate appointments from follow-up calls may stimulate results. Breaking this up into weekly tasks makes the workload manageable. The hard work was done when you motivated your patients to invest in their hearing healthcare by purchasing their first hearing aid from you.

Your patients are bombarded every week by your competitors who promise something new, better, and less expensive. Shouldn’t you be the first person your patients think of when they decide it’s time for a new hearing aid?

Mikkel Knudsen is the manager of inside sales at ReSound, and has worked in a variety of roles within the company in the past 10 years, including marketing, sales, business development, and strategic account management. He can be reached at mknudsen@gnresound.com.