No business course or lecture is complete without mentioning that a retained customer/client/patient/member is much more valuable than a new one. New people come with a cost of acquisition (COA) and risk. The risk is that only a percentage of these new ones will successfully matriculate through your system, gain value, and provide you fair remuneration. Therefore, as much as the acquisition of new people is always important; managing attrition is most valuable to the organization and the customer/client/patient/member over time.
To really and dramatically impact someone’s health, it requires long-term care. This is true of any area of healthcare; particularly chiropractic. Some of the most important research in chiropractic is predicated on patients under wellness care receiving adjustments over an extended period of time.
After getting my Masters in Industrial and Organizational Psychology, I’m now finishing up my PhD in Business Administration. Most of the business conferences I have been to outside of chiropractic spend considerable time discussing the value of retention over the value of a new customer. For example, the cost of acquisition on a retained customer is $0 rather than what can be $100s of dollars in cost and man-hours for each new one. Getting new patients is also famously difficult. It is radically easier to keep the patients that you have.
The retention opportunity is measured based on the Customer Lifetime Value (CLV). CLV is a critical “business” number. This includes not only the initial payment, but other monies earned through referrals, products they purchase, re-signing into new plans, and opportunities they create like lecturing at their work or social club. Where paying for an initial plan could be a few thousand dollars, the CLV could be $30-40,000 or even 100s of thousands of dollars.
Here’s the problem, while critical health care like chiropractic and gyms have the sole purpose of taking care of people for life and most all businesses are looking for a lifetime consumer, retention rates are usually painfully low.
A COMMON MENTAL MISTAKE.
You often hear chiropractors say, “I had 100% re-signs last month” – thinking their retention is at or near 100%. This is a gross miscalculation. If you had 100% re-signs, your visit per week volume would be 3-5000/week in an average clinic (10,000+/week in a big one).
It’s common for offices profession-wide to be doing 20+ conversions each month for a decade or more. In other words, they have converted approximately 2000 new patients into care over 10 years. Yet, for many, they are re-signing 8-15/month into wellness plans. In other words, out of 2000 initial, signed-up new patients, only 100-150 are still in the practice 10 years later. If you do the math, that 1850-1900 people that have left the clinic or a 93-95% attrition rate! Or, what is known in the business world as corporate suicide.
Few offices actually get new patients, they get “re-platients” – they just replace the people they are losing. Some people will leave no matter what you do. My goal, however, is to take you from 5% retention to 80% retention. That extra 75% is millions of dollars, 100s of lives saved, and a far easier, more satisfying way to practice.
To go from 5% retention to 80% is not as simple as some would make it, but it’s not rocket surgery either. Over the next several e-mails, we’re going to cover the 3 core areas and multiple secrets from both in and outside the chiropractic industry for retention.
Please share the emails with your associates and anyone in any business as well as watch for our posts on Facebook, Instagram, and LinkedIn to gain retention mastery over the next 30 days with us.
Have fun saving the world
Dr. Ben
