I finally figured out something I’ve been pondering for over a month. I used to think a high conversion rate was important. Then I thought that conversion rate was irrelevant. I was wrong on both counts. Today I realized that a high conversion rate is actually a sign of an unhealthy patient mix and a shaky financial future for the practice. Bear with me here… if we get so few patients in the door that we have to start almost all of them to hit our goals then basically we are subsistence farmers who only produce enough to get by and if there is any change in the external forces that act on the practice we will likely go into starvation mode. Also if we must start every patient we can with zero selection criteria other than they are willing to start that explains how we get all those PITA patients in the practice that accumulate over the years (PITA in terms of treatment, attitude, entitlement, etc). If, on the other hand, we have enough foot traffic in terms of new patients that we don’t have to start everyone – or even better that we CAN’T start everyone – then a few things happen:
1) We start the most eager, least demanding, most compliant cases – those who don’t love what we do will self select out of the process.
2) We have the option to choose the easiest cases which are much more profitable and less taxing.
3) This excess insulates the practice from changes in environmental effects that are beyond our control.
Based on weeks of thought and this revelation I’ve decided that I now want enough new patient flow to depress my conversion rate below the 60% mark. I believe a conversion rate in the mid 50s and a massive number of starts a month are much better indicators of a healthy, sustainable practice than the metrics we have consistently followed in the past.