WHY YOUR DIRECT REFERRALS SUCK
Direct referral percentages are the most important data every office should look at. This percentage is your semester grade in growth and consumerism. Failing to achieve at least a 50% referral rate is an indictment from your patients of record that they don’t like something. Believe me, low referral rates mean a slow death spiral of profit and staff turnover. Let’s delve a little deeper and see if we can’t come up with the main reasons for the referral challenged practice.
1. Patients don’t like you: Not really you the doctor but “you” being the overall culture, your systems, and your business model. Patients are fickle when it comes to selecting a dentist and will leave at the smallest provocation. It would be like hiring coaches for college football teams. They hire a coach, pledge to back him as long as the team wins or ties. You lose and you’re out of here. Patients do the same thing. Everything during an appointment can go great, and if the final step is botched, we lose the patient. Figure out what people don’t like about you, or just lock the doors and resign yourself to defeat in the Dental Practice business.
2. Increased competition: With more and more doctors and more and more marketing, competition has created the expectation of finding the perfect office. Like it or not, you are being compared to every dental office the patient has been to prior to arriving on your door step. This can be a tough uphill battle to be able to wow patients. Average practices are average for a reason. How people perceive you will dictate your future success.
3. You are out-of-network for their insurance: All of us have a few out-of-network patients still in our practices, but that too is coming to an end. These don’t refer because they know that their friends will want a dentist that takes their insurance. Insurance does, and will continue to, influence consumer’s choices as to where they spend their money on products and services.
4. You don’t or don’t know how to market: Your competition has deep pockets and if they have been at it a while, they know what works. You can no longer depend solely on referrals. We need new bodies at a higher rate to insure consistent growth and a profitable business model. You should be investing at least 3-5% of your collections in effective marketing.
5. You don’t ask for referrals: Huge mistake. Especially in busy practices or those that always run late, you appear to be busy and not really needing more patients. So, they don’t refer. It is the job of every staff member to encourage existing patients to send their family and friends.
6. You are too expensive: Too expensive doesn’t have to mean that you charge more. In fact, that is rarely the case. It is that you diagnose more. Look at it from the consumer’s perspective. They come in and you find oodles of things wrong. But her other dentist didn’t say she needed anything. Guess what, you forgot to listen. You are clueless. Slow down, partner with your staff, and find out what the patient wants, their dental IQ, and what their budget is. I will go into depth about the actual scripts and protocols in another post at a later date.
7. Your hours, services, and range ages you treat don’t meet the demands of the public: We are back to consumerism: Giving patients what they want, when they want it, at a price they can afford. Convenience is super important to a patient. They are always going to be influenced by insurance, your hours, the ability to bring their whole family to one place, interest free financing, and a caring and compassionate staff.
Your direct referral percentage is the number you must never take your eye off of. Even very high producing practices that thought they were untouchable are suffering the same fate as anyone else who does not embrace consumerism. This is how you Summit: Practice management done right.
Michael Abernathy, DDS
PS. My new book is now available. The title is Marketing the Super General Dental Practice. If you want/need more new patients, this will show you how to get them. Just click here for more info and to order.