Chiropractors Test Rule of 80/20 – 5 Points Can Track and Improve Your Ratios
Thursday
How do you know where the majority of your practice revenue comes from?
When you look closely, do find most of your income can be traced back to a small percentage of your patients?
If so this phenomenon is called the 80-20 rule (also known as the Pareto principle after the man who first described it.) One way this rule can be applied to your practice is the fact that 80% of the revenue generated in a year comes from 20% of the patients.
Put this principle to the test in your practice. Make a list of your best patients. Define “best patient” by the number of referrals they brought in and how good of a patient they were — were they friendly, did they make their appointments, etc.
Try to come up with a list of about 20 names, a VIP list if you will. Look at your patient accounting software and record the amount of each case brought in.
If you figured up what those 20 patients spent, plus what their referrals had spent in the last year, it will probably be close if not almost exactly 80% of your total collections for the year.
If this test proves to be true you might be asking “How can I get more of these types of patients in my practice?”
You see, it’s vital to find out who your best patients are and where they come from…so you can get more of them! By doing some investigative work, find out where the majority of these patients come from. Do you find that most of those patients are from a specific ad you had placed? Or were any of those patient’s referrals? If so, look further into your stats. You might find that the original patient that those referrals came from, were from an ad too.
If you’re finding that many of your best patients came from a specific ad, then that just proves another application of the 80-20 rule…
“80% of your new patients come from 20% of your marketing efforts.”
You might have seen this rule hold true before in your practice when you noticed certain chiropractic marketing strategies just work better than others.
So here’s what you can do after compiling this VIP list of patients…
Send them special “VIP letters” letting them know how much you appreciated them. Try to include a small gift with the letter. Of course you want more patients like these VIP patients so put in two referral gift certificates with instructions on how to use them as well. At Christmas you can send them a nice gift basket letting them know how much they mean to you.
Start implementing a “Referral Stream Letter” so that we can create more VIP patients. Send this letter out to every new patient who has started care in your practice. It welcomes them to the practice and builds a rapport. Also include two referral gift certificates for them to share with friends and family.
Both letters will work like a charm. The Referral Stream Letter alone will bring in 80% of the referral patients coming into your office (80-20 rule at work again?). In fact, you may never have to ask for referrals again…you simply let the letter do the work for you.
• Create a VIP list of 20 from you patient data
• Track the revenue brought in from each patient
• Back track to find the source (ads, referrals)
• Send out “VIP letters” to the names on your list
• Begin a “Referral Stream Letter” system
Another application of the 80-20 rule…80% of the money being spent on chiropractic is being made by 20% of the profession. Are you in that 20%?
