Money Well Spent

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Marketing your practice is an obvious and important part of your business plan, but do you know what is it going to cost and where to spend the money?

By Eric Cardin, PT, MS

In an environment of declining third-party reimbursement and increasing patient-centered cost sharing, private practice physical therapists must manage expenses. The old “spend money to make money” line is not so cliché as it pertains to marketing dollars. How much money to devote to marketing and how much time to put into marketing are real and important questions for new and established practices. It is a key decision early on in your practice and a decision that should come up each year as planning takes place for the next year. Estimates vary based on the sector of the economy, and some organizations target 10 to 30 percent of revenue to go to their marketing department. If you are imagining 10 percent of revenue for marketing right now and feeling queasy, you are not alone.

So what do you do when you are the marketing department (and the information technology [IT] department and maintenance department)? How do you choose to allocate funds? Most decisions on nonfixed expenses are centered on return on investment (ROI). Marketing ROI can be measured simply by new referrals and increased visits, so the first step is determining your targets. Even the most basic electronic medical record (EMR) should be able to calculate who is sending your patients. More sophisticated looks drill down to types of providers, location of providers, and even further detail can answer, “Why did you choose us?” Understanding who is sending you patients, who are these patients, and how are these patients finding you are the most important first steps for building your marketing strategy. Marketing efforts toward referral sources is part of your strategy. Another essential component is understanding that some patients make the choice of where to go to physical therapy independent of their physician, and knowing the “how” and “why” of this choice is equally important.

Understanding your referral base should be a key part of due diligence leading up to the decision to open the doors to a new practice. Yearly in-depth review of who the leaders, laggers, and newbies are drives a sound marketing effort. Asking new clients why they chose your practice yields valuable information that rounds out the remaining components of your strategy. Creating and implementing this strategy will determine how money is spent and what you got for that money or ROI. This is centered on some familiar questions. Who is sending you patients? Why did they choose to send patients to you? What made your client choose you over another facility? When did they make that choice? What did you do to not screw that up?

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Larger practices and other types of businesses can spend marketing dollars in elaborate ways. High dollar investments tend to be more traditional media methods (TV, radio, print), and newer methods can be less costly (social media campaigns, website). The cheapest and some would say most cost-effective method (especially when starting out or reconnecting with a referral source) is the tried and true office visit. Getting to know the referral source and their “gatekeepers” while creating a personal relationship will yield more results than any ad, sign, tweet, or mailer. With an array of options we can take a wide-ranging approach or something with more precision. There is no playbook, but the rules are easy to understand. Identify targets (physicians, community groups, businesses), set goals (Dr. Howard will send X patients a month, Dr. Fine will send Y per year), and remember that the single most important marketing target is the one that is right in front of you. The single most important marketing target is the one that is right in front of you. Repeat it again. Remind your staff. Make it your mantra. It costs nothing to take good care of your patients. Be flexible with scheduling. Provide an atmosphere conducive to healing. Make follow-up calls. Respond to complaints. Learn to be an active listener. These are all simple and free and with each client you discharge you are creating a “brand ambassador.” This can be a slow way to build your practice. Relationship building with referral sources and with each client takes time, but the return on investment is 100 percent, and no other strategy will match that and help reach the goal of creating lifelong loyal clients who refer their parents, their children, their neighbors, and anyone who will listen.

There are also effective ways to seed growth through social media platforms. Content is the name of the game and keeping it fresh and engaging is important. Engaging content can be informative blogs, educational videos, and current social media postings. Fresh and interactive content improves Google search rankings and keeps your digital audience engaged. This brings up the inevitable time versus cost argument. Traditional marketing campaigns are more expensive, but often they are “set it and forget it.” Modern digital/social campaigns can be dramatically cheaper, but someone has to generate, edit, and upload content and the minute it becomes stale users lose interest.

Marketing is important to any business, but it is especially important in a referral-based human services business. Personal connections have longevity and should be the cornerstone of your marketing efforts as you identify your targets, create your plan, and execute your marketing strategy.

Eric Cardin, PT, MS, is a PPS member and executive director of South County Physical Therapy, Inc, located in Auburn, Massachusetts. He can be reached at ecardin@sc-pt.com.

Developing Your Practice’s Marketing Budget

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The key is to be realistic and consistent.

By Michelle Collie, PT, DPT, MS, OCS

Every physical therapy practice is different. Business goals, the type and size of practice, targeted demographics, culture, environment, maturity, and reputation result in the inability to come up with a one-size-fits-all marketing plan to meet the needs of all private physical therapy practices. Because of this, there is no perfect formula to determine the precise amount to budget and spend on marketing. Whether your business goal is to increase profitability, create more free time for yourself, be a leader in your community, or grow your practice, establishing a marketing budget is an important process to ensure fiscal success.

Three common ways to establish a marketing budget include: (1) How much did I spend last year; (2) how much do I want to spend; or (3) calculating the budget on the percent of sales. Of course, the most objective way to establish a marketing budget is based on the percent of sales or, alternatively stated, the marketing cost per new patient. Any budgeting process begins with an environmental scan to assess inside and outside factors affecting your business; for example, reviewing trends in health care reimbursement and the formation of different payment methodologies, consolidation of health care providers, accountable care organizations (ACOs) and bundled payments, competition from other physical therapy practices, and brand awareness in the community of your practice. An internal scan will, among other things, assess the stability, experience, and reputation of your clinical and administrative staff; loyalty and word-of-mouth referrals; and your clinic size and layout. The actual budget begins with the revenue. The environmental scan will assist with establishing a volume forecast; the number of new patients multiplied by the average number of visits per new patient. Total revenue can be estimated knowing the volume forecast and the estimated payment per visit.

The marketing budget is established based on the marketing cost for each new patient. The environmental scan, historical trends, and the maturity of a clinic will guide this expense. Scott Wick, director of marketing at Therapeutic Associates, describes in Marketing 101: Module 2, Marketing, Planning and Budgeting the phases of a practice and the estimated associated marketing cost per new patient. Wick suggests that for the established practice the marketing cost per new patient is around $8, whereas a practice in its first three years of business, its growth phase, the cost per new patient will be closer to $21. This is in line with the Chief Marketing Officer (CMO) Council, a professional organization for chief marketing officers, which reports that in order to execute an effective marketing plan a business should be spending at least between 1 percent and 10 percent of sales revenue on marketing.1

Allocation of the marketing budget can be done by considering the three types of new patients: (1) professional referrals, patients referred by physicians and other professionals; (2) internal referrals, essentially patients from word of mouth, other patients, and employees; and (3) direct access, or patients resulting from consumer marketing. Examples of marketing expenses include costs incurred from direct marketing to referral sources, website and social media campaigns, advertising, event sponsorship, print media, branding giveaways, and salaries of marketing staff. Allocate your budget based on the types of new patients desired. Additionally, when developing a budget consider not only money, but also time and energy. Frequent analysis of what worked and what did not and measurement of return on investment will allow for adjustments in resource allocation and determination of the most cost-effective marketing strategies for your practice’s success. This will ultimately drive the marketing expense down per new patient to allow you to reach your business goals.

Taking the time to establish a marketing plan and a realistic budget will allow for consistency in the number of desired new patients coming to your practice and prevent the stressful peaks and valleys so often seen in private physical therapy practices.

For more information, please visit the Private Practice Section (PPS) Learning Center. Marketing 101: Module 2, Marketing, Planning, and Budgeting provides additional resources and information. Free to members, Marketing 101 is a series of presentations by respected marketing gurus Lynn Steffes, PT, DPT, and Scott Wick.

References

1. smallbusiness.chron.com/recommended-percentage-sales-marketing-budget-25023.html. Accessed December 2016.

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Michelle Collie, PT, DPT, MS, OCS, is the chair of the PPS PR and Marketing Committee and chief executive officer of Performance Physical Therapy in Rhode Island. She can be reached at mcollie@performanceptri.com.

Benchmarking Basics to Drive Results

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How to scientifically benchmark your private practice marketing.

By Michelle Collie, PT, DPT, MS, OCS

Social media campaigns, direct marketing to referral sources, advertising, and outreach to past patients, no matter the marketing goal or strategy, benchmarking is an essential component to ensure maximum results.

Keep Marketing on Track

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How to scientifically benchmark your private practice marketing.

By Chad Madden, PT, MSPT

Is the print ad you ran in last month’s paper working? What about the Facebook post you are running for your next workshop? Or the company you paid thousands of dollars to for search engine optimization? Is the marketing you’re investing in worth it?

Is Your Brand an Experience?

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The importance of the “how” in branding for physical therapy private practice.

By Benjamin Barron, Pt

In the eyes of the health care consumer, outpatient physical therapy is increasingly being viewed as a commodity rather than a specialized service or experience. In other words, many of your potential customers believe all physical therapy is the same with little to no differentiation in training, outcomes, service, or compliance. The same belief holds true for referring physicians, hospital networks, and insurance companies. In this type of environment, it becomes imperative that business owners and leaders find innovative ways to differentiate their business from their competition and prove value to their customers. One way that private practitioners can do this is by creating a branded experience that sets you apart.

Your brand is not simply your logo, business card, and website. Jerry McLaughlin said it quite well on Forbes.com1 when he stated, “Your ‘brand’ is what your prospect thinks of when he or she hears your brand name. It’s everything the public thinks it knows about your name brand offering—both factual and emotional. Your brand name exists objectively; people can see it. It’s fixed. But your brand exists only in someone’s mind.”

Perhaps the most important part of that statement is the idea that your brand is an individual’s perception. This presents both an opportunity and a risk. The key is to have the intended brand concept match what the consumer perceives and experiences.

When patients come to your practice, they expect that you and your clinicians are well trained and will help them recover. If this occurs, you have only met their baseline expectations. To develop an enthusiastic fan and a loyal patient, it is critical to somehow exceed their expectations. One way to do this is to provide marketing content that clearly tells the story of who you are. The other is to deliver on an overall legendary experience from the initial contact to discharge and beyond. If you are able to do this in a regular, repeatable, systematic fashion, you can develop and build a brand that will differentiate you among your referral sources and from your competition.

Providing an unparalleled experience doesn’t happen by accident. Think of Disney or the Ritz-Carlton, which pride themselves on creating a “wow” effect for each of their customers. This all starts with leadership providing a clear vision of who they are, what they do, and how they do it better.

Your customers will likely make assumptions about your company (and your brand) before they know anything about you and certainly before you become aware of them. Often, they will look to one of two major external resources: the internet and trusted friends and family members.

Your social media content, the number and quality of online reviews, and your website are the primary means by which potential patients might first start to realize that physical therapy is not a commodity and determine if your brand is what they are looking for. By doing our own research, we learned in nonrural areas that up to 50 percent of physical therapy customers are making the decision of where to seek services based on their research on the internet.

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Business coach Chris Smith of the Campfire Effect stated at Ascend 2016,2 “Patients can figure out the ‘what’ pretty quickly. What they’re more interested in is the ‘how’. How can you help me? But they don’t want you to be the only one to tell them; they want social proof!” This means that your digital presence has to go beyond stating that you provide physical therapy for fill-in-the-blank diagnosis using fill-in-the-blank techniques. Your patients want to know what to expect in terms of the experience, and they want to hear about it from your previous patients. Testimonials are key, not just on your website, but on your Google location page, on Yelp, on Facebook, and on every other channel that your customers may be utilizing.

Assuming these prospective customers find your digital presence to be a fit for their needs and they decide to become a customer, they begin comparing their expectations to their actual experience from the very first interaction with you. As Dennis Snow says, “Everything Speaks.” How your staff answers the phone, the amount of garbage in the bin, and the music playing in your clinic all create an environment and an impression. It’s up to you to decide what you want this experience to be, relate this to your team, and hold them accountable. Consider how your children’s experience at Disney would be if they saw Mickey Mouse with his fake head under his arm smoking a cigarette.

The work is just getting started once you have determined what you want your brand to look and feel like. Training your team and consistent monitoring are the key to successful brand execution. Patient satisfaction surveys are simply not enough to monitor or differentiate yourself. Just about every outpatient physical therapy practice in the United States will have satisfaction scores of 95 percent or higher. What you need is a system and a tool that is automated, has no selection bias, and provides you with real-time data on the patient experience that allows you to congratulate your team, provides constructive feedback, and identifies the customers who will shout your praises from the rooftops.

Some organizations utilize the Net Promoter Scale to determine exactly how likely your patients are to recommend your services to their friends and family. Sometimes referred to as the only number you need to know in business, asking your patients “How likely are you to recommend ABC Physical Therapy to your friends or family?” will give you more data on a patient’s perception of your brand than anything else. Even better, by using email automation systems, you will be able to get this data in a systematic, nonbiased fashion to get a true sense of your team’s ability to execute on your brand vision.

The final step in this process relates back to Chris Smith’s idea of “social proof.” By identifying your promoters as those who score you as a 9 or 10 on the Net Promoter Scale, you can reach out to these people to see if they would be willing to speak about their experience. There are many ways to both capture and capitalize on this content: Facebook reviews, Google reviews, and video or written testimonials. The most important part is that this is done in a systematic, repeatable fashion.

Once you develop your brand concept and train your staff, utilizing your most powerful customer service experiences is vital to propelling your brand forward. By allowing and leveraging past customers to both shape and influence your consumer experience, you continue to better your brand’s position for the future. It is this positive perception, and this improved brand position, that will ultimately bring more potential customers into your practice and convince potential patients and referring physicians in your community that physical therapy is definitely not a commodity.

References

1. Jerry McLaughlin. What is a Brand Anyway? Dec. 21, 2011. Forbes.com. Accessed November 2016.

2. Chris Smith. The Campfire Effect. Ascend Conference 2016, webpt.com/blog/post/3-key-action-items-from-ascend-2016. Accessed November 2016.

Benjamin Barron, PT, is a PPS member and practices at ProEx Physical Therapy and Collectivity in New Hampshire. He can be reached at bbarron@proexpt.com.

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