Money Well Spent
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?
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 email@example.com.