There are three primary areas we keep seeing where practices of all sizes lose money. The unfortunate truth of the matter is, these are areas with relatively simple fixes — and, with some skill, systemic and scalable solutions across any given organization are easily available. The three areas that your practice is very likely burning up the monies are:
1. Customer Retention
2. New Customer Discovery
3. Social Media Engagement
And… the thing of it is: These three dimensions are now transcendently digital by nature, which means they can be 100% data driven in their approach, and, in their revenue driven ROI metrics.
So… all this leads us to the main question: How Much Money Is Your Practice Burning?
1. Revenue LOSS Due To Failure in Customer RETENTION
Based on numbers we know from national averages, assuming your practice has a daily patient volume of 100 patients per day. And, continuing with each visit being worth $95/visit per the national average. To this, we know these facts about patient retention failure:
- 20-30% patient drop off of total caseload volume by visit #3
- 2) 70% of the entire caseload with failure to complete entire course of care
- 3) The average course of care for most practices is 12 visits
Based on these facts, a typical — although conservative — retention schedule looks something like this for most practices:
Visit | Retention Rate
1 | 100%
2 | 100%
3 | 80%
4 | 80%
5 | 80%
6 | 70%
7 | 70%
8 | 70%
9 | 60%
10 | 60%
11 | 50%
12 | 30%
As such, a typical expected total revenue for the caseload of all 100 patients in this bucket would be:
UNFORTUNATELY, due to the customer retention failure, the actual revenue capture would be:
Meaning, this practice seeing a daily volume of 100 patients would lose over the course of care for these 100 patients:
A FINAL NOTE: For the above attrition rate, which is common yet quite conservative for most practices, the businesses capture only 70.8% of total revenue potential. This is a HUGE loss of revenue opportunity and can be the difference between healthy profits versus stressful times.
2. Revenue LOSS From Poor New Customer Discovery
Failure in New Customer Discovery draws it primary cause from bad Search Engine Optimization (SEO). Unfortunately, most practices regardless of size, typically focus on maintaining current marketshare through referral sources without taking full advantage of the increase in shopping by healthcare consumers. HERE ARE SOME ADDITIONAL FACTS:
- Well over 80% of healthcare consumers will choose their next healthcare provider through the search bar (ie. Google search)
- Close to 90% of healthcare consumers who find a provide via online search AND sees favorable reviews will participate in a purchasing behavior
- Over 92% of consumers who search and find a service solution on a mobile device will make a purchasing behavior in the next 24 hours
As such, assume that every month, there are 1000 people in your general area seeking out a musculoskeletal solution and/or searching for a Physical Therapy clinic. We know that the average Customer Life Time Value per course of care for outpatient physical therapy practice is approximately $1,140. Gold standard website conversion metrics should include: (A) 30% traffic crossing over as leads generated, and, (B) 15% of all leads generated converted as purchasing customers.
At 10% of New Customer Discovery web traffic, you’d conservatively get 100 visitors per month to your clinic website, for just the case of physical therapy and back pain. Following the gold standard conversion rates, you’d gain 4.5 new patients per month simply by being ranked #2 in Google — assuming you have a well crafted web design.
TRANSLATED FOR REVENUE: Being ranked #2 in Google with a lower range of 1,000 people a month searching in your clinic area for a Physical Therapy solution would gain your practice new discovery revenue to the tune of: $5,130 / monthly — and, that’s just for a single location and search type.
As a point of reference: In an average American metropolitan area, there are usually 4,000 – 5,000 monthly searches for “physical therapy” and “back pain,” alone (not to mention all the other combinations of search terms for things in the realm of physical therapy and healthcare). Meaning, if you were truly ranked #2 in your region(s) in Google -AND- have a well designed user experience on your website — you should be minimally drawing in New Customer Discovery worth $20,520 per month.
3. Loss of Revenue From Poor Social Media Engagement
Social Media Marketing isn’t competitive anymore — it’s baseline, entry level. If your practice isn’t actively engaging prospective customers, current clientele, and keeping in contact with past customers… you’re already behind pace. The good news is, getting up to snuff can be done through systematic phases. To answer the question how much money you should be gaining… or, how much you may be losing from a bad social media marketing effort, we must first ask the following question:
When are you READY to start getting NEW PATIENTS from social media posts?
Social Media Reach (Organic)
- Getting Started – < 300 (Post More Frequently)
- Okay – 300 – 500 (Post More Frequently)
- Good – 500 – 800 (Ready for boosting)
- Great – 800+ (Ready for offers)
Business Account Engagement Rate
- Getting Started: < 4% — Post Better Content
- Okay: 4-8% — Post Videos & Live Stream from Facebook and/or Instagram
- Good: 8 – 12% — You Are Ready for Boosting & Begin Testing Offers
- Great: 12% — Your Social Media accounts are now Ready for Offers!
ALL TO SAY: At an average, your Facebook page alone with an Organic Reach of 500 with 8-12% as an Engagement Rate should garner 4-6 organic leads per month.
Here are some undeniable facts about digital influence and healthcare consumers.
To close out today’s article, let’s share in some common struggles in the world of private practice. Here are some marketing insights regarding Physical Therapy practices, owners, managers, and their thoughts on the matter:
- 56% of practices identify getting more market share of new patients as their primary marketing need.
- 24% of practices view better retention from current patients as the priority focus of their marketing strategy.
- 20% of practices center their marketing efforts in identifying brand ambassadors within a dedicated selection of patients to bring in New Customer Discovery and positively influence Customer Retention.
With Physical Therapy claiming only 7 – 9.8% of the musculoskeletal market, there’s a LOT of work to be done — even if only at the direct to consumer marketing front. Much of the money makers that can create a meaningful difference in a short time span include social media content, SEO, and elevating your practice’s customer retention strategies.
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