Winter 2002

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The Value of Media-Generated Referrals

By Woody Oakes, DDS, FAES
CEO/President, Excellence in Dentistry



About the author

Dr. Oakes was awarded with a Fellowship in the American Endodontic Society in 1987, and in the same year founded Excellence in Dentistry, Inc. He is also the publisher of The Profitable Dentist newsletter. In 1990, he founded Oral-Vision, Inc., the manufacturer and distributor of the intra-oral camera. He is also the founder of the renowned Dr. Woody Oakes Lecture Series and has authored numerous books and articles, including "The Winning Combination" series. Dr. Oakes has given over 250 lectures and presentations throughout the US and Canada. He can be reached by e-mail at woody@theprofitabledentist.com, toll free at 800-337-8467, or through his Web site: www.theprofitabledentist.com.

 

New patient flow is the lifeblood of a thriving practice. Today's successful dentist must be not only a skilled clinician, but also have a good understanding of how to attract and keep new patients (or hire someone who does). Since only about half this country's adult population visits the dentist regularly, plenty of new patients exist. The problem many dentists have is they don't know how to reach this large segment of the population, bring them into the practice, and convert them into long-term patients of record who happily refer others for treatment.

Internal marketing-satisfying existing patients and creating referrals from them-will always be critical to practice growth. However, in our ever more media-driven society, consumers aren't as likely to get dental information from someone they know as they were in the past. An ADA consumer survey found that while 13% cited friends as their source for dental information and 12% looked to family, 31% cited television, 26% magazines, and 24% newspapers! A growing percentage of dentists are now promoting their practices externally and focusing on media-generated patients to help their practices grow and remain independent from managed care plans.

As consumers become more sophisticated, the method of reaching out to them is also changing. A recent survey conducted by Dental Practice & Finance magazine found that dentists are now relying less on one of the profession's traditional marketing avenues: phone-books. Yellow page advertising fell nearly 7% from 1994 to 1998, although this type of external marketing is still the most favored. The survey found that more creative and pro-active methods of advertising such as newspaper and other print advertising, direct mail and radio advertising gained significant popularity during that period.

However, as the magazine stated, "marketing budgets remain meager." Over 50% of respondents spent only 1% of practice income on marketing (and that figure is probably inflated, as many marginally marketing-related activities-golf with a colleague-are often lumped under this expense category.) Most small businesses with comparable incomes spend a minimum 7% of annual income on marketing. Less than 9% of dentists spend even 5%. Even more alarming is that 7.1% of the survey respondents weren't even sure what their marketing budget was! What many dentists don't seem to realize that effective advertising doesn't really cost anything-it pays for itself many times over by increasing new patient flow and therefore practice production.

DDS and DMD degrees don't come with an MBA, and many dentists find practice marketing mysterious and intimidating, especially with the wide array of external marketing alternatives. Marketing-savvy practices often combine more than one method to obtain the new patient flow they are seeking. As mentioned earlier, the phone book is the old stand-by, but it is difficult to differentiate your practice from the masses. If you have the time and the inclination, community public relations is a good way to get exposure for your practice. Join organizations, volunteer, participate in career days and public service programs, and write columns for the local paper.

Other ways to attract new patients are through practice newsletters, local newspaper/magazine/ radio advertising, and direct mail pieces. All these methods can be successful in the long run, but many dentists give up too quickly. External marketing requires consistent repetition in order to be effective. There are two reasons for this: First, research has shown that we have to see an advertisement at least seven times before we are moved to take action; second, people are not very likely to have a perceived need at precisely the moment they first see your ad or become aware of your practice.


One marketing program that recognizes this is the 1-800-DENTIST® referral service. For twelve years they have run television commercials promoting dentistry and encouraging those without a dentist to call this number to find one nearby. The phone number has become a household name in many states, so when the desire or need for a dentist arises, people automatically think: 1-800-DENTIST®. Whenever a new member joins this cooperative advertising service, they get the benefit of all those years of name exposure. By pooling the resources of thousands of dentists, 1-800-DENTIST® can produce commercials and buy network television air time that most dentists can't afford to do on their own. They also offer-at no additional cost-expert staff training on how to handle and benefit most from media-generated patients
.

No matter how you go about getting them to call you, media-generated referrals must be handled differently than those you receive by word-of-mouth. Many times dentists will give up on external marketing when it isn't the marketing method that failed, but rather practice protocols and systems were not adapted to media-generated patients. Since no built-in trust exists (by association with family or friends), these patients require a different approach in order to maximize return on the marketing investment.

Media-generated patients may be more difficult to appoint initially, especially for staff without the proper training. But because they don't visit a dentist regularly, they often have extensive restorative treatment needs. These procrastinating patients, once converted into patients of record, can become the best advocates a dental practice can have. They're more likely to refer because they don't take quality care for granted-they want to tell others about how you've changed their lives. Advertising can only bring patients to your door; it can't welcome them into your practice. It doesn't make sense to spend time and money on external marketing and then not make the effort to learn how to handle these people properly.

Another key to successful external marketing is not to ascribe short term value to individual patients. You need to know all data to assess your return on investment in any marketing program. A media-generated patient may not have any significant treatment completed immediately, but may refer others who pay for thousands of dollars of treatment. Recognize that you are building a referral tree. Each new patient comes with several others attached and new patients are more likely to refer than existing patients. When patients become familiar with you and part of your dental family, they don't talk about you anymore. Most patients make referrals within their first three months in the practice.

This is where the combination of external and internal marketing becomes a very powerful tool for building your practice. By satisfying the new media-generated patient and then consistently asking for referrals, the actual return on investment in external marketing can be multiplied many times over. For instance, a three-year 1-800-DENTIST® member is doing thousands in increased production a month from primary media-generated patients, and tens of thousands a month in production from the three years cumulative referral tree!

Of course, the only way a practice will know the return on investment from any external marketing is to diligently track where their new patients come from. In the same survey cited earlier, almost one-third of the dentists said they do not track the source of their new patients! Without effectiveness statistics, dentists are simply using guesswork to determine future budgets and business plans. As Dr. Howard Farran said, "Using 'guesstimates' as the deciding factor to start, stop, increase or decrease a marketing strategy or tool is like driving your car at night without headlights." This is very dangerous to practice health.

Of course, the only way a practice will know the return on investment from any external marketing is to diligently track where their new patients come from. In the same survey cited earlier, almost one-third of the dentists said they do not track the source of their new patients! Without effectiveness statistics, dentists are simply using guesswork to determine future budgets and business plans. As Dr. Howard Farran said, "Using 'guesstimates' as the deciding factor to start, stop, increase or decrease a marketing strategy or tool is like driving your car at night without headlights." This is very dangerous to practice health.

Don't be intimidated by external marketing alternatives. Take advantage of the opportunities that are now available to market your practice, train your staff to handle media-generated referrals and track your return on investment. You and your patients will benefit.






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