Ben Burris & Angela Weber
Today’s orthodontic practice seeking growth requires a different mindset not only in how new patients are attracted but also in how we view key performance indicators.
Let’s look at an example scenario…
What do you think about a practice with the following statistics?
Conversion rate from initial interest to contract start = 15%
Conversion rate from new patient visit to contract start = 25%
No show rate for new patient appointments = 41%
Fee for full treatment = $2998.00
Not feeling so great, right?
Here are a few more stats about the same practice:
Opened May 10, 2018
Contract starts in the first six months of a cold start = 300
Total production in the first six months of a cold start = $920,000.00
Total new patient appointments =1181
Days a week worked = 3
Hours per day= 9:00 am to 3:00 pm
*Practice closed for three weeks in June for family trip to Europe
How can this be? How can the initial statistics reek of failure but the results in terms of case starts and production scream success? The simple response is that our traditional way of measuring key performance indicators and our baseline for those metrics do not apply in a modern orthodontic practice. Current conversion rate thinking takes into consideration a referral base that is predominantly doctor referrals and patient referrals. In which case you are receiving new patient inquiries that have been primed. How many of those doctor referrals and patient referrals never made their way to your door? You’ll never know or maybe you already do. If your referral GP’s are making it rain referral slips but you are not seeing the activity translate back into your practice, then that’s a lot of lost patients indicating low actual conversion rate from initial point of contact.
From where we sit, it basically comes down to which world you choose to inhabit. If you want to do things the way orthodontists have traditionally done them then you are limiting yourself to a very small biosphere where 1-2% of the population get orthodontic treatment each year, where general dentists are the major source of new patient referrals and where the traditional stats on no show and conversion rates make sense – well they kind of make sense. The problem with believing that you should get 60/70/80 percent of the initial, cold leads your office generates is that it neglects to take a great deal into account. Even in the traditional biosphere. For example, if a referring dentist gives your card to 10 new patients, how many of them take action and call your office? Half? More? Less? No one knows but from what we experienced running a multi-specialty office we are guessing that half is generous. So, even though you are unaware, you are starting with a 50 percent loss on initial leads right off the bat. Of those who call, what percentage make an appointment, show up, are ready and start? Half? 60 percent? If you include every single one instead of arbitrarily excluding some who are not ready or don’t start to pad your conversion rate, we think this is pretty close. So, even in the traditional setting with the advantage of the general dentist referral your conversion rate from initial lead to start is most likely 25% or less. And think of all the work you do to get those leads, how few they are and how little control you have over the new patient flow seeing how the GP can stop referring or hire an orthodontist tomorrow.
The problem is that we have unrealistic expectations of what our conversion rate is and get frustrated when tracking of other new patient sources doesn’t yield the same stats as the improper tracking of our traditional referral sources.
And this brings us to the other option – the choice to live in the world where we compete for the attention of the other 98% of Americans and attempt to convince them to spend their discretionary dollars with us instead of Disney, Toyota, plastic surgeons, Spirit Airlines and AT&T. In this world the stats we gave you at the beginning of this piece are very much in line with great performing marketing! Furthermore, if we ignore everything but the number of contract starts per week/month/year (the only number that matters) then the rest is extraneous anyway. The point is that we are getting many times better results in terms of production and case starts than any other startup we know of AND doing it on 3 days a week, 9-3, 44 weeks a year!
But it gets even worse (or better if you take our POV). The conversion rate we work with traditionally is limited in time meaning that we look at it on a per month basis generally. There is nothing wrong with that, but it fails to account for another big difference between the traditional marketing mindset and our point of view. Essentially, once someone decides they are interested in a product or service then they will eventually get what they want at some point in the future. Think about the last time you considered getting something you wanted then decided you didn’t have the time or the money at that point in time. Did you forget all about it and never think about it again? Probably not – you’ll come back to it a few times and eventually pull the trigger. Same happens when someone in the market for braces no shows or doesn’t return the initial call. They will come back to us at some point – and our advantage is that they can’t get the attractive price we are offering elsewhere! The net effect is that our conversion rate will climb over time and because we are dealing with huge numbers due to our market position and pricing, these straggler conversions will amount to hundreds of contract starts!
Look, it’s totally up to you to decide your mindset and your target demographic. What we are suggesting is that the traditional way of looking at new patients, conversion rate and “quality leads” may be flawed. All that matters is how many cases start per week/month/year. This fact is hard to argue with. Do yourself a favor and at least consider the possibility that the way we have always done it may not be the best for our practices, our lifestyles or our patients!