We Educate Our Children
I regularly have interesting conversations with entrepreneurial Principals about one of their key challenges. Growing their patient list and selling more treatment packages. It can be at an established practice or one which has only been established for a few years. The first step is to retain your existing patients.
The simple equation from the perspective of Principals considering an exit is that the value is a function of total revenue and profit. If you if you have an exit value in mind then you must have a turnover and profit to reflect that valuation.
The conversation starts with a question about how they plan to keep up the growth? We talk about referral programmes, local marketing campaigns, extended hours, reducing the number of cancellations and models which allow you to see more patients every day.
We rarely have any concrete information to talk about how many prospective patients are being converted into registered patients. Or how many patients are accepting treatment quotes / plans. By that I mean their conversion rate. That is a key KPI or any business that is working hard to on board more clients and increase their revenue.
Often I am told that the important thing is to push forward with the marketing activities. So that the enquiries keep coming and that this will inevitably lead to increased revenue. So all they had to do was keep filling the top of the sales funnel and make sure they had enough sales orientated people answering the phone or responding to e mail enquiries to grow.
I suggest that adding people like that was really expensive. I try to steer them in the direction of focusing on the existing team and understanding what their conversion rate is. Then thinking about ways of improving that conversion rate. You do not have to move the needle much to make a significant difference to revenue and profitability. Two, three, four or five percentage points will make a difference. And these results are achieved without adding any more cost to the business.
In these scenarios the focus was all on the marketing machine and not on the closing rate.
This is not an uncommon strategy. When evaluating all the levers a Principal has at their disposal to increase revenues, too many default to increasing the quantity of top of the sales funnel activities that don’t involve actually selling. Selling and closing is simply getting people to agree to register with the practice or to invest in additional treatments. But that is no good without an understanding of how many people fail to be engaged and register as patients or decide not to take up other services within the practice. Quantity over quality is not a sustainable approach to growing a profitable business.
The expression ‘we educate our children and we train our pets’ helps contextualise the different approaches to getting the same outcome.
This teaches us is that we should not train our people without educating them. We train a pet to blindly comply with our commands. They don’t get an option. We just want them to do what we ask.
We must educate our people to understand the vital importance of the small picture. The big picture or the context of how and why their words and actions impact their ability to connect, engage and inspire other people to take positive action.
This is not to say training is not important. We must train people to become part of a team and understand common methods and processes. However, we also need to educate people in order to maximise their individual potential.
We want to educate our people to display independent judgment, demonstrate initiative or take calculated risks.
Predictable obedience is not what we are looking for. We want people who ‘colour outside the lines’ to lift those conversion rates. In my experience all successful salespeople take risks to develop their skills and elevate their performance.
We have to ask ourselves; how do we educate our people to constructively break the rules, in order to effectively develop their unique talents and skills?
Educating is hard because it requires some initiative and commitment on everyone’s part. This means setting aside time during the work day to bring their team together to read, listen, watch and discuss books, podcasts, videos and more.
I believe that Principals must take the first steps. This involves implementing learning programs with their front line staff who are actively engaging with patients in the practice and prospective patients who visit or phone in. The big leap they have to make is to make the decision to invest company time to have those people collectively invest their attentions in getting better at turning all those enquiries and conversations into revenue.
This does take discipline and commitment. Nothing in life worth having comes easy.
This article was written by Tom Orchard, Head of Practice Sales at Lily Head Dental Practice Sales . It was first published in the November 2024 edition of The Dentist Magazine.
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