Who Isn’t Your Customer?

Who Are You Selling To?

Or maybe a better question to ask would be,

“Who are you not?”

You’ve been taught to think that demographically hearing impaired people over the age of 50 or 55 are your target market. But how well do you track the demographics of who actually buys hearing aids from your practice? My guess is that you focus on what brought a patient to your office and you analyze what happens once they cross your threshold.

  • Did they buy?
  • How many units did they buy?
  • What was the average selling price?
  • What was the cost of goods?
  • What brought them to your office?

But there are a host of other qualitative factors that should be analyzed including,

  • Patient age
  • Discrimination score
  • Degree of loss

Who Isn’t Your Customer?

You should also be analyzing who comes into your office and not just to determine why they walked out without doing anything about their problem. Gather data on who they are,

  • Their age
  • Zip Code
  • Degree of Loss
  • Discrimination Scores

There are any number of ways to group individuals, for example, gender, race and employment status also come to mind. You may find (if you dig deeper) that your customer is a much smaller segment of your target market. If that’s the case it might be time to change things up a bit regarding your marketing. Figure out what you have that’s working and for whom. Then experiment with marketing designed for a different niche of your target market.

The ratio of people who wear hearing aids to the number of people who need hearing aids has changed very little over the past 20 years.   It’s time to look at everything you’re doing differently or 5, 10, 20 years from now you’ll still only be providing better hearing to 20% of the people who need what you do.

P&L: What You Should Be Looking At

The question, “What is a profit and loss statement and why do I need to look at it?” comes up often enough that a brief explanation is in order. One thing that I’m always amazed by is the willingness of hearing healthcare professionals to open a practice with very little formal business training. Your passion for helping others probably got you into this business, but your ability to run your businesses successfully is what keeps you in business.

Many owners may be in business for years before they see a profit-and-loss statement. Even if someone else is taking care of your bookkeeping or accounting, it is vital to understand this tool. It’s your gauge for knowing how successful the business is, and it provides great information for setting goals. It can show trends that warn when the business is failing. It can also give you clues about how your business can grow.

The most basic function of a profit-loss statement is to determine your gross profit and net profit. Gross profit is the difference between cost of goods sold and total sales. Net profit is the difference between your gross profit and total expenses. Net profit is the bottom-line dollar amount that the business earns at the end of the day.

A profit-and-loss statement can usually be generated electronically through accounting systems such as QuickBooks or Peachtree. Your accountant can also generate one based on the information you provide. Usually a profit-and-loss statement begins with your income. Details are helpful here. For example, you can break down each sales category separately to serve your needs. I suggest creating categories for hearing aids, hearing tests (sub categorized if your office provides specialty testing), ALDs, Ancillary Care Products, Repairs.

The next category is the cost of goods sold. This is how much you pay for your products for resale. The breakdown of your cost-of-goods-sold categories should mirror your sales categories. That way you can calculate individual gross margins for each category.

Again, subtracting the cost of goods sold from your total income will leave you with your gross profit. This is how much money you have made before expenses.

It is extremely important to list all of your expenses. Some of your basic fixed expenses will be utilities, rent and insurance. These are expenses that should remain consistent and that you have limited control over.  It is also important to have your variable expenses listed. These are expenses that in many cases you can control. Some of these would be advertising costs, travel and entertainment, and charitable contributions. By tracking your variable expenses, you have the ability to help your company be more profitable. If the practice’s gross margin declines for some reason, these expenses can be reduced.

Some of the other standard expenses that will show up on a profit-and-loss statement are labor costs, professional fees and office supplies. These again are expenses that can be reduced when the practice’s profits are not in line with the owner’s goals.

Last but not least, don’t forget to create categories for any additional expenses that come through the business such as licenses, dues and subscriptions, and postage and shipping. Interest on loans that you pay, or bad debts you can’t collect, should also be added to your profit and loss statement.

Finally, get into the habit of viewing your P&L at the beginning of the month, mid-month and at the end of the month.  Doing so will help you to use your P&L to accomplish three very important things.

  • Plan
  • Problem Solve
  • Analyze

Reading this was probably a painful process.  There’s only so much humor you can inject into any article related to Accounting.  I hope you made it all the way to the end and I hope when you’re done reading the article, the very next thing you do is go look at your P&L.

Are You Setting Your Practice Up for Failure?

The success or failure of a business is dependent on a variety of factors.  By monitoring several key components of your practice, you can gauge the overall health of your practice on a weekly and a monthly basis.

Often times, practices do not reach their full potential for reasons the practice owner cannot clearly explain.  The problem with this scenario is that when the practice suffers a downturn, not only does the owner not see the downturn coming, but they’re also unsure why or how to resolve the problem if they can even identify what the problem may be. The other side is equally important. If you are reaching your goals but do not understand how or why then how do you know if you will reach them in the future?

For example, it’s the middle of the month and your goal is to sell 20 hearing aids, currently you’ve sold 5. There are a total of 10 hearing tests scheduled through the end of the month.  You know that the audiologist has a 70% closure ratio and an 80% binaural ratio.  What does all that mean?  It means that you can anticipate that those ten people will result in 11 hearing aids.

Is this an exact science, no?  But let’s say you had 3 hearing tests scheduled through the end of the month.  Based on the numbers above you could anticipate only 3 hearing aids to be sold by months end.  At this point you could pray for a miracle or know that something will need to be done to get at least 7 more people into the office by the end of the month.

This is when all the other programs begin to make sense.  If your recall program is working, let the recall person know that you need 7 more people. Or view your marketing data and drop an ad that has, in the past garnered 7 patients (keeping in mind your budget and any timelines).  Or ideally initiate a combination of the two programs.  Either way you are being proactive.

Sitting on the sidelines crossing your fingers and hoping it all works out may have been your mantra in the past, but in today’s increasingly competitive marketplace that’s not really a very good idea.

Can Small Businesses Benefit From Big Data?

Last week’s blog post about targeting your clients spoke a lot about using your data, but from where are you collecting this data to use when planning your marketing?  In a perfect world a multitude of data accumulated by other individuals would be at your fingertips. Your job would be to merely sift through the data choosing the marketing pieces with the highest return on investment, determine a budget and make a plan. How easy would that be? You could probably plan an entire years worth of marketing in under an hour.

Good News, Bad News

The bad news is that in most markets, even in the franchise realm data gathered far and wide is often too vague for anyone to rely on at the local level. This doesn’t mean that you should discount the data provided by these larger entities. Use their data to spot trends, but collect your own data to make decisions about your business.

Big Data

From Forbes

Large corporations regularly use big data to get insight on consumer behavior, target their marketing and to boost revenue. But small businesses typically do little with big data. Until now, most owners have considered it too difficult, too expensive and just plain intimidating.

That’s changing. These days an increasing number of small businesses are collecting and crunching volumes of data to lift their sales.

“Small businesses shouldn’t be scared off by big data,” says Steve King, partner at Emergent Research. The growth of the Internet, wireless networks, smartphones, social media, sensors and other digital technology is fueling a big data revolution. Big data was the exclusive domain of statisticians and large corporations but not anymore.”

What can a small business do with big data?

For a start, it can boost efficiency and sales.

King gives an example. The Spillers Group, a company that owns three restaurants in Dallas, uses a data application called Roambi that enables it to share among management all the business information it collects, including point-of-sale data, labor metrics and accounting numbers. With Roambi, Spillers can link managers’ pay to their restaurant’s performance. The app has also cut Spillers’ labor costs 10%, saving thousands of dollars every two weeks.

“Before their data was a hodgepodge,” King says. “They had sales data in one place, supply data in another place and staffing data in another—and they never looked at how to bring them all together. So they were inefficient when it came to scheduling and supplies. When they brought the data together they discovered quickly they could cut costs by making minor changes. That’s a huge win.”

Small businesses that use data intelligently can do business better.

They can improve pricing and just-in-time supply chains. They can find cheaper suppliers that are closer to their location and that offer more price transparency. Small businesses can also use data to tailor products and services to individual customers.

Businesses can identify key customers and treat them better.

They can understand customer patterns, know when they’re likely to come in and reward them for multiple visits. “All this big data is helping to level the playing field for small businesses,” King says. “Even though the field is still tilted in favor of big business, big data is a way for small business to fight back. A lot of this stuff is made easy for small business, like Google GOOG -2.3% Analytics. You don’t have to be a data scientist to use these tools and get good insights.”

Why Data is Important

The more you know about each of your leads, the faster you can zoom in on the strongest prospects, engaging them with content that’s personally meaningful to them.

  • Quickly identify and rectify problems
  • Data can be used to decide which products and services should be marketed and which should be eliminated.
  • Aids in assessing employee performance

Accumulating data is a necessary evil. The alternative is to run your practice on a wing and prayer, which is not a strategy we’d recommend.

Predictive Targeting on the Senior Care Continuum

What if you could pinpoint the exact time when a client would want to buy your product or service, and be able to contact them at that very moment? Predictive targeting in the senior care continuum is the way to do this with seniors in the healthcare markets. Immersion Active writes about their studies in just this, and I couldn’t pass up the opportunity to share it with you. Although their article is highly specific to to senior clients in healthcare, this technique can be applied to many different marketing segments.

What is Predictive Targeting?

Predictive targeting can “predict” which user might respond to an ad based not on one specific piece of data, but rather on a wide range of different attributes. One of the best way to predict who will convert is to look at your existing converters.

What is the Senior Care Continuum?

This continuum identifies the journey a senior takes, from their initial health crisis all the way through outpatient care, in-home care, and the move into assisted living. The image below visually represents the 3 phases of care needs. A senior can enter the continuum at any phase and can go from different phases at different time, they do not necessarily enter from the beginning and follow the continuum in it’s entirety.

senior continuum
(via: Care One)

Why Is It Important?

The continuum has increased value when you can apply it to a specific health condition. When we have studied a specific condition for a healthcare client, we have found it useful to first define the continuum for that specific condition, and then to overlay it with lead data and data from the client’s CRM. This allows us to determine types of care that patients are most likely to seek at each stage of the care continuum. This powerful use of data allows you to see into the effectiveness of your marketing and gauge your overall coverage of the complete continuum of your ideal customer.

The key to this process is using data to validate and predict where along the continuum your clients will be at the time of engagement. Imagine a scenario where your customer is engaging with content on a specific topic related to one of your products. The customer is an existing customer, and your knowledge of their condition and its place on the continuum now brings new opportunity as the data aligns to a pattern you’ve seen before. You can now target the potential purchase of a new service based on the predictive timing you’ve developed from your existing marketing data. With more data, you can move further ahead of the curve and know when a customer is moving into the buying cycle at the earliest moment possible.

It sounds complicated, but it’s actually a simple process to get started. However, there are always a few questions when we begin creating a predictive targeting model for seniors for one of our clients.

Do I have to harvest my own data or can I use third-party data?

Great question! We prefer your own data, but you can usually start with the condition and stage, and bring in third-party data to support your ideas. Yet what you want to find is where your product fits into that continuum. A third-party data set will not do a good job of finding that. You can have a custom care continuum study done to find where your customer lands and then go back to your data.

Do I have the right data?

This is determined in large part by the amount of data you have. The minimally viable level of data would be sales data (purchase data), with customer behavior data integration through your CRM. The key to the mix here is that you can tie the two pieces of data together to create a complete picture of the customer journey with your product or service. Many of our clients have software like Google AnalyticsSales ForceHubspotInfusionsoft, or Eloqua. Having one of these tools can make the process even easier.

Without a tool, if you are able to gain access to your web analytic data, you need to have care stage tie-in. This means that you can draw the connection between your Web analytics and the specific condition to a stage of the continuum. Additionally, your content marketing strategy can tell you a lot. We’ve used content to further segment customers, which aids in the overall prediction accuracy.

In most cases, you do have the right data. It’s just a matter of putting it all together.

What will I gain if I do this?

The big take-away from predictive targeting is that it can help you have a clear understanding of what your best customer looks like, and can allow you to target them more quickly and accurately. The process saves thousands of dollars in the long run, due to the increased efficiency of targeting seniors for your product. You’ll be a hero in the boardroom, and no longer will political decision rule the roost. Your predictive targeting will drive a new understanding of both the customer process and of your marketing as a whole.

Using Data in Your Marketing

Let’s start by deciding whose data you’re going to use when planning your marketing. In a perfect world a multitude of data accumulated by other individuals would be at your fingertips. Your job would be to merely sift through the data choosing the marketing pieces with the highest return on investment (ROI), determine a budget and make a plan. How easy would that be, heck you could probably plan an entire years worth of marketing in under an hour.

Good News, Bad News

The bad news is that in most markets, even in the franchise realm data gathered far and wide is often too vague for anyone to rely on at the local level. This doesn’t mean that you should discount the data provided by these larger entities. Use their data to spot trends, but collect your own data to make decisions about your business.

Big Data

From Forbes

Large corporations regularly use big data to get insight on consumer behavior, target their marketing and to boost revenue. But small businesses typically do little with big data. Until now, most owners have considered it too difficult, too expensive and just plain intimidating.

That’s changing. These days an increasing number of small businesses are collecting and crunching volumes of data to lift their sales.

“Small businesses shouldn’t be scared off by big data,” says Steve King, partner at Emergent Research. The growth of the Internet, wireless networks, smartphones, social media, sensors and other digital technology is fueling a big data revolution. Big data was the exclusive domain of statisticians and large corporations but not anymore.”

What can a small business do with big data?

For a start, it can boost efficiency and sales

King gives an example. The Spillers Group, a company that owns three restaurants in Dallas, uses a data application called Roambi that enables it to share among management all the business information it collects, including point-of-sale data, labor metrics and accounting numbers. With Roambi, Spillers can link managers’ pay to their restaurant’s performance. The app has also cut Spillers’ labor costs 10%, saving thousands of dollars every two weeks.

“Before their data was a hodgepodge,” King says. “They had sales data in one place, supply data in another place and staffing data in another—and they never looked at how to bring them all together. So they were inefficient when it came to scheduling and supplies. When they brought the data together they discovered quickly they could cut costs by making minor changes. That’s a huge win.”

Small businesses that use data intelligently can do business better

They can improve pricing and just-in-time supply chains. They can find cheaper suppliers that are closer to their location and that offer more price transparency. Small businesses can also use data to tailor products and services to individual customers.

Businesses can identify key customers and treat them better

They can understand customer patterns, know when they’re likely to come in and reward them for multiple visits. “All this big data is helping to level the playing field for small businesses,” King says. “Even though the field is still tilted in favor of big business, big data is a way for small business to fight back. A lot of this stuff is made easy for small business, like Google GOOG -2.3% Analytics. You don’t have to be a data scientist to use these tools and get good insights.”

Why Data is Important

    • The more you know about each of your leads, the faster you can zoom in on the strongest prospects, engaging them with content that’s personally meaningful to them.
    • Quickly identify and rectify problems
    • Data can be used to decide which products and services should be marketed and which should be eliminated.
    • Aids in assessing employee performance

Accumulating data is a necessary evil. The alternative is to run your practice on a wing and prayer, not a strategy we’d recommend.

 

 

 

Why Did You Choose Our Office?

One of the costly line items in your budget every month is your advertising and marketing expense.  That being said, are you really doing everything you can to make sure you know exactly how your patients are choosing your office?

Why Choose?

Notice I said choose instead of asking them who referred you to them.

There is a difference.  Over the course of years while your patient is aware they have a problem hearing (but ignoring the problem) they will be influenced consciously and sub-consciously long before they are actually ready to do something about their hearing loss.

The more often your practice is involved in the “influencing” the more likely it is that a patient will choose your office.

High Involvement Decision Making

Hearing aids fall into the high involvement decision-making process.  When a consumer buys more expensive less frequently purchased products in an unfamiliar category, purchase decisions are more about problem solving. This type of purchase is what is known as a High Involvement purchase.

The Consumer Buying Process

When purchasing any product, a consumer goes through a decision process. This process can consist of up to five stages and also often referred to as the product adoption process.  Product adoption is concerned with the way new consumers learn about new product and decide to purchase. There are mainly five steps in the product adoption process. They are:

Product Awareness

The first step of the product adoption is to be aware of product. Consumers become aware of product introduction in the market via various means of communication, both online and offline.

Product Interest

If interest in the product is piqued, the consumer will start to collect the information related to the product.

Product Evaluation

The consumer will now evaluate the information collected. Consumers will attempt to assess the quality, benefits and price of the product.

Product Trial

It is at this point in the process that a purchase is made.

Product Adoption

Finally, after the trial of the product if the consumer is satisfied he/she will decide to adopt the product and use the product regularly.

The length of this decision process will vary depending upon the nature of the product being purchased. A consumer may not act in isolation in the purchase, but rather may be influenced by any of several people in various roles. The number of influences involved in the buying decision increases with the cost of the item.

Other people are often involved in a consumer’s purchase decision. In the case of a hearing aid purchase it is most often the significant other followed by close friends and family and often other healthcare professionals.  Marketing strategies should also be aimed at these people.

It might be time to take a step back and assess your referral tracking process.

The Oversell of Call Source Tracking

In theory, call source tracking is designed to allow companies to measure advertising effectiveness, increase sales and enhance customer service.  The customary method is to assign a phone number to each advertising and or marketing piece currently in use.  The premise is that you can better determine the effectiveness of each of your individual campaigns by better defining what made a potential customer contact your place of business.

Why this is all wrong.

Consumer Behavior

What influences you to purchase anything? Consumers are constantly evolving in their buying behavior based on their experiences. Consumer behavior is the process consumers go through when they make purchases and it involves multiple factors that influence their decision and usage.

The 5 Steps in the Buying Process

You need to understand these steps in order to properly move the consumer to the product and close the sale.  Take note, these steps do not need to occur in a sequential process.

Need Recognition

The very first step in the process is when consumers realize that they have a need for something. A need can be generated internally (I’m hungry and want food now) or externally (Your neighbor just got a new car, so you “need” a new car).

When consumers recognize an unfulfilled need and that a product will satisfy it, they have created a want.

There are three ways that consumers recognize unfulfilled wants.

  1. A a consumer becomes frustrated with the fact that a product he or she has is not performing properly. (the consumers own ears and hearing loss fall into this category).
  2. A consumer runs out of the product.
  3. A consumer becomes aware of a product that is better than their current product.
Information Search

After the consumer has developed a want or a need, he or she needs to start an information search about the different alternative selections that they can purchase to satisfy their need. The consumer will look both internally and externally for his information to help him make a decision. An internal information search consists of utilizing information from memory, such as past experiences with the product.

An external information search is the process of seeking information in the outside environment. They ask their friends and family about their experiences, what they purchased and where they made their purchase. They can also research public sources, such as consumer reports for information about a product.

Another external information source for the consumer are would be marketing-controlled sources, such as radio, television ads, brochures, etc. The amount of time dedicated to this step usually depends on the consumer’s past experience with buying the product, the risk involved and the level of interest.

Evaluation Of Alternatives And Purchase

After consumers have recognized a need, conducted information research and created a final set of choices, they then must make a decision.

In order to make the final decision, consumers usually decide on one product attribute that is the most important. It could be quality, price, store location, etc.  The role of marketing is communicate away any potential obstacles.

Our current economy is definitely a factor.  Economic issues have really affected the purchase outcome due to the recession. According to PewSocialTrends.org (a national demographic and trend survey company), only six percent of consumers have increased their spending since the recession hit in 2007. In fact, 62% of Americans said in the survey that they have curtailed their consumer spending amounts. In the survey, the respondents were quizzed about their future spending patterns once the economy improves; 31% say that they will spend less in the next few years.

Post-Purchase Behavior

After a consumer makes a decision to buy a product, they expect satisfaction to occur from the purchase. If the product does not meet their requirements, then dissatisfaction can occur and the consumer will talk poorly about the product publicly, return the product and also possibly not be a repeat buyer. A smart marketer will make sure that their consumer is completely satisfied and does not develop any negative post-purchase feelings. There is a difference between failed expectations and “buyer’s remorse” be aware of and understand how to address both.

What Should You Take Away From All This?

The big problem with call source tracking.  It’s an easy way to for you and the staff to check off the “how did you hear about us” box without worrying if the response is an accurate assessment of path the patient took to end up at your office.

Call source tracking identifies the method that the consumer used to make the call.  But in no way shape or form does it identify the path that the consumer took to arrive at that juncture.  Quite possibly, they read a few of your blogs, saw a few of your ads, or attended a consumer seminar you gave 6 months ago.  Eliminate any of those methods and quite possibly the same patient would’ve ended up in your competitors office.

Track your marketing results the right way…ask questions.  “How did you hear about us?”,   “Have you attended any of our seminars?”, “Did you see us online?”  Probe a little for a reponse, guaranteed you’ll be surprised at the answers you get.

Or create a checklist that includes all of your marketing activities and request that they check all that apply.  Leave a blank line for them to fill in.  If want to better understand the final catalyst then by all means use call source tracking.  Just don’t rely on it to when it comes to planning your marketing.

 

 

 

I Have No Idea How I Got My Newest Patient

When I ask the question, “Tell me the top 5 ways you get a patient through your door? If just once, someone would be honest with me and say out loud, “I have no idea where my patients are coming from” I’d probably keel over on the spot.”  Invariably the answers I get range from, “Well I’m pretty sure they’re coming from…or “I’ll have to try to figure that out.”…or the always popular Well it varies.”

If you don’t know the answer to that question, you’re wasting your advertising and marketing dollars.  You need to understand not only what draws patients to your business but what doesn’t.

Ask your patients questions.  I don’t mean strap them to a chair under a bright light and threaten bodily harm if they don’t come up with the right answer.  I mean be genuine.  “Mr. Patient, we really value your business and we would love to have more patients just like you.”  “Can you please tell me how you first heard about us?”

If they answer, the yellow pages, or online, or any other non-specific response, it’s okay to dig a little deeper.  “Hmm, interesting, were you looking for us or did you just stumble on our page…or our website?”

You will never know for sure if the answer they give is really the “correct answer”.  But I guarantee what you will uncover is a potential market you didn’t know existed.  Maybe a neighbor really is raving about you and sending links from your website to her friends.  Yes, they found you online, but it’s because Linda sent them a link.

Ask the right questions, track the responses and hopefully you’ll be spending your advertising dollars on financially rewarding opportunities you didn’t even know existed.