Our next story delves into what I consider to be a practice’s worst nightmare. Here’s the basic situation: a practice puts big money into a great location, builds out that location with no expense spared, spends big dollars on a high profile marketing campaign, opens the doors and…crickets. You can see the visual right? Nothing but tumbleweed rolling by the office.
We had this very case in a fine Midwestern city. A brand new strip mail had opened up and this practice had put a gorgeous new 4,000 square foot orthodontic and general dental practice in there. The initial marketing campaign was strong with TV ads, a nice price promotion, radio promos and a semi-formal grand opening (one can only assume that the champagne was Korbel). With 8 operatories, this place was ready for the flood of patients that would surely be on the way.
Except that there was no flood, or a nice stream or even a small babbling brook. The practice had 0 new patients in month 1, 1 in month 2 and 2 in month 3. Not exactly a rousing start. On top of that, the practice was fully staffed anticipating a great start so costs were substantially higher than one with a more modest opening.
And how did the practice react to that underwhelming start? By hitting up the bank for additional funds and pouring more money into marketing. Internet ads, billboards and bus barn signs piled on top of the original advertising. Campaigns were revised. New marketing advisors were paid. The practice went from 3 patients signed in the first 3 months to 5 patients signed in the next 3 months. Yes, a 67% improvement, but still not nearly enough to pay staff, rent, or any other meaningful expense.
At this point, we got a call. Why us instead of someone that people have actually heard of? Well, first we don’t charge anything unless results improve substantially. So, no risk to the practice in bringing us on. Second, we’ve worked a lot with practices that appear to be bottoming out or have reached a critical status. Third, we tend to move quickly with solutions so that a practice doesn’t bleed cash while waiting for us to figure things out. Finally, why not?
As always, our first step was to take a look at the numbers . As we’ve said before, so much can be accomplished by simply having useful, accurate summary data. Fortunately for us, the data told us just about everything we needed to know. And what the data told us was that the focus had been on the wrong place.
Over the first six months, the number of consultation appointments looked like this:
Month 1: 24
Month 2: 29
Month 3: 31
Month 4: 27
Month 5: 32
Month 6: 35
Not explosive, but not terrible either. Yes, the marketing could have been revised a bit, but the marketing campaign is was not the problem. It produced enough patients to generate a positive cash flow for the practice. The problem was this: of the 178 patients who made a new patient appointment, 8 became patients. 8! That means that 4.5% of all patients were converted from appointment to actual patient.
With the focus shifted from marketing to conversion, we had to find out exactly why no one was being converted. In this case, a whopping 20.2% of patients who made an appointment actually showed up for the appointment. So, breaking it down further. 178 patients made appointments, 36 showed up, 6 needed some dental work before starting and that aforementioned 8(!) signed contracts.
In sum, good information leads to properly directed solutions.
With this, the analysis phase was over and the fixing phase had commenced. In our next post, we’ll discuss the fixing side of things.
In the meantime, if this practice is you or you know someone who has this situation, give us a shout at bpalmisano2@gmail.com. There’s no fee unless we can successfully solve your practice’s profit problem. And even then, we’re not going to charge you an excessive amount.
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