There is a fundamental and potentially catastrophic failure we see many private practices make daily. And because it could be ripping profits right from your practice pockets and stripping clients of the care they need, this is an important article. I recommend you read it in its entirety and share it with others in practice because…
“If you don’t know where you are at this moment or how to measure success, you simply won’t achieve the massive results you deserve and your community needs.” – Sara Condon
See, we track many things because we understand it is essential for triumph.
How do you know your diet is working? You measure your starting point and then jump on the scales or pull out the tape measure regularly, right?
How might you gain insight into how your therapy is helping a client with depression or anxiety? Have them complete a DASS at frequent intervals.
Yes, you focus on KPI’s without naming them as such in practice because you truly want to help your clients.
The fundamental way to get somewhere is to understand the starting point, decide on the destination, and plot a considered course that is monitored often to allow and accommodate for corrections. (That sounds like therapy, yes?)
We do this in many areas of our life, so why is it easy to overlook – or ignore – this in practice, where it really matters?
I’m sure part of the reason is the terminology.
Key Performance Indicators… KPI’s…
Sounds scary, daunting, and very number-y. Not many therapists love this… That is, until they understand the massive momentum and increased profits knowing these numbers creates.
And in reality, with the advances in automation and technology, earnest tracking is not nearly as overwhelming as it may sound. By investing the time, resources, and energy into your private practice in a focused and informed way, you will in turn, help your bottom line – significantly.
Key indicators of a successful practice
There are many key indicators of a successful practice. Let’s take a look at some of the simple, powerful ones.
Your professional website is crucial to your practice success. It enables people to find you – this is an important start, to discover what you do, engage with your brand and its values, and connect with your content to begin building a relationship. These components are key to building online trust and rapport, which can transform a potential into an actual client.
We specialize in creating therapy websites that make a powerful impact on your bottom dollar and practice success, so I wanted to share a free tool that can be used in conjunction with your site…
This free tool helps you track where people come from – in other words, how they found you, how long they spend on your site, which content they engage with most (good) and which they don’t (not so good), whether they are new to your site or returning after following a previous visit. I could go on but the point is, Analytics enables you to identify patterns and uncover areas that need improvement and those that work well.
As Investopedia states, “A… lead is a prospective consumer of a product or service, created when an individual or business shows interest and provides contact information.”
These can come from advertising, social media, networking events, website visitors, referrals, and many more places.
It’s important to track where each lead comes from.
If your key performance indicators reveal that you gain significantly more traction from website visitors than forum comments, you know where to spend more time and money for greater success.
Hint: In this example, it’s not the forums!
While simply having visitors and interactions is important, conversion of these leads (or potential clients) into actual clients is what your practice is built on.
Once these leads convert to new clients, it’s essential to track this too. Understanding how many new clients your practice sees per week, month, year, and per therapist allows intelligent business decisions.
It tracks an improvement or reduction in close rates. While I know that term might sound cold, if you can’t get a potential client to commit to care, you can’t help them.
You also need to look at where new clients come from, which is a reflection on your leads KPI. This helps you identify if you have a lucrative source of leads-new clients.
*** Speaking of New Clients… Are you attracting the right ones? Find out with our Ideal Client Quiz and receive 3 FREE Marketing Tips to reach your Ideal Client. ***
If you spend 10 hours on social media and secure 10 leads and one new client, this translates into 10 hours of your time for one new client. If you earn $30 per hour, this equates to $300 spent to get that one fresh-to-your-practice client.
You might also have a Google pay per click campaign (PPC) running, which costs $100 to procure one new client.
With this in mind, you have solid figures to point you in the direction of greater success. In this example, for the same money, PPC would be three times more profitable than social media.
Note: If you’re unsure what Google PPC is, read our insightful article Paid Advertising – Does It Make Sense for Your Private Practice? to find out.
Bear in mind, where a client comes from – and any offers that enticed them into your practice in the first place – may impact on their future consultation decisions with you. So we need to also consider…
Client lifetime value
Key indicators of a successful practice are broad, but one of the most important is the lifetime client value.
This is, as it states, the amount of money a client spends over their time in your practice.
As your averages are key in decision making, I discussed this in the article above and will again here:
“… a client’s average lifetime value; that is the amount of money one client, on average, will spend in your practice over the course of their time with you. The most straightforward way to think of this is to figure out how many times a client, on average, comes to see you. Then multiply that by your session rate (if you’re a cash-based practice) or insurance reimbursement rate. And that’s your average lifetime value.”
Understanding this KPI is imperative as it drives your marketing judgments.
You may have already discovered that, in practice, it’s easy to throw good money after bad in the area of advertising. So much so, some therapists simply chuck their hands in the air and give up. Yet, what if you understood your average client lifetime value so you knew how much money you could spend to secure a new client in a profitable, productive way?
For example, if you knew your lifetime client value were $2100, you could dedicate $100, $200, even $500, to finding a new client and still leave great margins. If your lifetime client value were $400, your choices would be very different. Which brings me to your…
Return on investment (ROI)
Your return on investment is absolutely one of the key indicators of a successful practice. If you have an exact, monitored KPI for this you’ll be able to pinpoint how much you can spend to attract new clients. If not, you won’t know whether your marketing choices are wonderful or dreadful, keepers or those you needed to ditch yesterday.
By understanding your key performance indicators you can ramp up your winning campaigns, approaches and marketing and bring more profitable clients into your practice.
You can stop or reduce those approaches that are costing you more than they’re worth.
And by investing the time, resources and energy into your practice, you can help more people and make a lot more money.
Because without using KPI’s, you are diving into the deep end with your eyes tightly closed.
Download our KPI infographic, and if you absolutely love it, leave a comment, share it with your friends, and come back soon for more private practice marketing advice.
P.S. Have you checked out our brand new segment, The Brighter Spotlight, where we sit down with a long-time BV customer to learn more about them and their practice?