This article originally appeared in the Principles of Practice Management e-newsletter. Subscribe to this informative twice monthly practice management ENL here.
At a recent peewee basketball game, I saw a great example of business instincts in action. The funny thing is, the seven-year-old players had a better grasp of business principles than many people in our field. Humans have two foundational mechanisms that we can usually count on. We’re typically risk-seeking when dealing unlikely gains, and we’re typically risk-averse when it comes to protecting against losses.
Basketball is a game of offense and defense, and both positions are equally important. (This is no different in business.) In basketball, the players who wear both hats and hustle on both ends usually win the day. At my son’s game, whenever a child scored a point, there was an 84% chance that the same child would be the first person down the court to play defense. In our game, this ratio was 21:25. If the scorer wasn’t first player down the court, then he was the second 100% of the time. This behavior was exhibited by both teams, and by a variety of children with a wide range of skills.
There is no role-based rationale for this. These are young kids, so their games are pure chaos in motion. In fact, if you were to speculate, wouldn’t you guess that the scoring child would be swept up in self-adulation and be the last kid back down the court? Yet, again and again, those kids switched quickly from offense to defense.
Don't complicate things
What I witnessed was our inborn response and instinct to protect our direct contributions and the resources we provide. Sometimes in business, we complicate this picture. We prioritize the wrong metrics or put up barriers to communication that leave our “points” unprotected. We focus so much on scoring the next basket that we lose sight of how we’re falling behind in the game.
To improve your business, look at how you protect what you’ve already achieved. When you score a point in the office, are you the first one back on defense? What would that defense even be?
What good are top-line revenues when deals with PPOs, out-of-control attrition, and failing patient relations are not protecting your efforts? Some owners play defense by agonizing over supply costs, raises, the thermostat setting, lights left on, and a million other distractions that, combined, barely move the bottom line. The fastest way for me to gain true insight into the state of a company is to check the quality of the toilet paper provided for their employees. Bad toilet paper means a struggling business. While the owner’s defensive instinct may be correct, his defensive strategy is faulty and cannot protect his gains.
Instead of focusing on the thermostat or supply costs, take a look at your patient retention budget. Many practices pay top dollar to attract new patients with marketing, but then they don’t play defense to ensure that those new patients become established patients. The kids on the peewee team understand what these owners do not. It’s a better long-term strategy to protect the points (or patients) you already have than to ignore defense and count on shooting more baskets.
On average, retaining a patient costs one-fifth as much as attracting a new one. In addition, the economic implications of most PPO plans dictate that you need to see the patient a minimum of two (often three) times to even see a profit. So if you’re not retaining patients, your marketing is actually losing you money.
A good defense
Develop defensive strategies that help you turn new patients into long-term patients. Basketball teams develop routines to navigate sticky situations. You need to create scripts to help you succeed at defense in your practice.
Here’s an example of a solid defense against the patients who say they need to talk to their spouses about finances, when in reality they’re just going to price-shop the treatment plan.
“Mrs. Jones, I’m glad you’re going talk to Mr. Jones. Dentistry can be tough for patients to evaluate. Think about cars. When you need a new car, you know exactly what to do, where to look, and what questions to ask. Driving down the road you can easily spot cars that won’t be on the road in a few years, and some that shouldn’t be on the road now. I want your car (your teeth) to be on the road for the rest of your life. If you’re going to call around to a few other dealerships (pause for laughter), I can guarantee you that we’ll never be the least expensive. But I can also tell you that after folks do make those calls, the majority choose to put their faith in us. Just in case that’s true for you too, I suggest we go ahead and make the appointment, but we’ll put it in pencil. In a few days, if we don’t hear anything from you, we’ll switch it to pen. Does that sound fair?”
There’s no pressure in this defense. It adds no additional work for anyone, and most of the time, the penciled-in appointment ends up written in pen.
Where do you need to improve your defense? Where are you too focused on new points, while letting events chip away at your lead? Spend some time evaluating your team and the game you play. Be first on defense and you’ll be in the championship game in no time.