On a regular basis, we here at My Practice Engine like to equip your dental or orthodontic practice with simple, meaningful statistics to track. When you look at the number, that number is telling you something very powerful about your practice. In the past, we’ve discussed things like benchmark expenses as a percentage of revenue and batting averages.
Here’s a key marketing barometer to add to your quiver. We refer to it as the conversion rate and it is very easy to compute. For any given month, take your number of new contracts or total of new patients who have agreed to start treatment and divide that total by the number of consultation appointments made. That bit of mathematics will yield a percentage somewhere between 0 and 100%.
More important than the number itself is what does this number tell us?
As you can probably tell from the numerator and denominator, we are answering the following vital question: At what rate did potential new patients get converted into actual new patients? If I want to sign x patients, how many consultations should be on the books for a given month. For example, say that your conversion rate is normally 30%. If you want to sign 10 new contracts in a month, you need to have 34 consultations booked (actually 33.333 if we take 10 divided by 30%).
When we have a consultation on the books, there are 4 things that can cause this potential patient not to become an ongoing, paying patient.
The patient does not show up for his or her new patient appointment
We’ll discuss this in more detail in our next post, but this is where we see a lot of potential new patients disappear from the radar. If a practice has 40 new patients on the books and only half show up for the appointment, the office has lost a major opportunity to show how professional, effective and fun it can be for that patient. And beyond just the patient, potential referrals from that patient probably disapper without even having a chance for a face-to-face meeting.
Of the patients on the books for a consultation, an office should strive to have at least 75% of them show up for that consultation. For the 25% of those who don’t, we’ve discussed some methods to potentially reacquire those folks.
The patient shows up for the appointment, but does not need treatment
Sometimes folks have perfect teeth and simply do not need treatment at all. Sometimes, they are asked to wait until further development. Whatever the case, there are professional treatment decisions made and we won’t try to interject an opinion there.
However, if you regularly see patients not needing treatment, this may have something to do with your marketing. You may have an effective message – just directed at the wrong audience. For example, if you have an orthodontic practice and half of your patients are over 65 years old, you’ll probably want to stop running ads during Matlock reruns. By the same token, if you are trying to build an adult patient base in your dental practice and most of your consults are for patients under 4 years old, you are probably targeting the wrong outlets for your media.
Generally, if fewer than 80% of patients need treatment, you may want to look at your marketing to make sure you are attracting good candidates for your practice. Your target audience and/or message might be out of whack.
The patient shows up, needs treatment, but does not sign a contract
This issue goes right to the selling effort of the staff and doctor. You have a patient in front of you who needs treatment. Everyone on your team should have the attitude that patients like that do not walk out the door unhappy and unsigned. No high pressure sales tactics necessary here. You just need to show exactly why you are the best practice in town and why the patient will have the best experience possible in your practice – and yours alone. We’ve talked about this in much more detail and I’ll provide the links for you:
We’ve generally seen practices set a goal of 80% here, but if you are anywhere below 100%, you’ll want to know exactly why patients did not sign up. If you see a trend developing, you have a problem to be solved.
As you can see, the conversion rate –and the components within it-- tells us a lot about our marketing and selling efforts. As a general rule of thumb a practice should have a goal of a 50% or better conversion rate. If you are doing better than that, great. Time to find new sources of new patients for your practice. If it is lower than you want, take a closer look at the reasons that a patient falls out of the process before signing a contract or agreeing to start treatment. If a trend from month-to-month or an absolute number is out of line with benchmarks and expectations, there’s your problem. Time to get to solving it.
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