I had an interesting conversation in a coaching meeting this morning. The client already does a great job managing their data regarding patients. In this case, the practice was a cosmetic surgery practice but the solutions we discussed can apply to a dental practice as well, or really most small businesses.
We talked about peaks and valleys in cash flow. These doctors could easily identify which months were traditionally the slowest, July being one of them. Usually, when someone sees a lull coming, they overcompensate by spending heavily to drive more web traffic and thereby leads or somehow take from future business for cash flow now (such as a sale or a special designed to sell now at all costs). Both of these common scenarios perpetuate cash flow peaks and valleys. But, don’t worry, there is a better way.
It is true that there is immense value locked away in everyone’s databases. The trick is knowing how to extract it and, in the case of patching cash flow valleys, knowing how to do so without disturbing future cashflow. Here is an example.
Let’s say there are two practices that are both slow in July. Practice A decides to go for some easy cashflow and pushes a special on injectables, let’s just say Botox™ Cosmetic for example since that has the best brand recognition. Practice A advertised specials on paid search, puts the special on their web site, email blasts it out to all their contacts, puts up signage for foot traffic to see and promotes the special. They get a broad response that meets their cash flow needs... that is good. However, a lot of Botox™ customers simply move up their future appointments to buy now because of the special. The cash flow valley has been bridged but in a way, it has created a smaller cash flow shortfall in the future. This is a very common scenario when you use a broad sale to bring in business. It is one of the ways that not measuring your business data can cause you to create a cycle of peaks and valleys on top of the natural business cycles you cannot control.
So how to do it better? Practice B has the same scenario. And, they are going to do a Botox™ promotional sale, too. However, they are going to be selective to whom they make the offer. Instead of borrowing business from the future, they are going to create new business by being smart and aggressive. In their database, they find all Botox™ patients and divide them into two groups: regular patients and infrequent patients. The regular patients come in regularly for their Botox™ and the infrequent patients either do not have a pattern or have come once or rarely. By restricting the promotion to the infrequent patients, Practice B can be generate cash flow on the same promotion without tapping into forecasted business from the near future. The value lies in the database. The trick to avoiding peaks and valleys in this case is knowing how to use it.
This is a 1:1 Marketing principle. If you are interested in learning techniques like this and applying 1:1 Marketing to your practice, please email me today about my coaching program at donald@dogstarmedia.com.
