Episode Transcript
Key Takeaways
- Attrition can significantly impact the growth of a medical practice.
- Losing patients is costly and affects predictable income.
- Customer service and patient engagement are crucial for retention.
- The Zagarnik effect can be leveraged to improve patient retention.
- Reactivation of past patients is a cost-effective strategy.
Introduction
Welcome back to another episode of Practice Perfect, the show for medical professionals, plastic surgeons, and anybody running a professional services practice as opposed to a bricks and mortar store. This is episode number seven, and today we’re going to talk about how to keep patients coming back to your practice. We are, of course, talking today about attrition. It’s sometimes referred to as churn rate, and I’d like to talk to you about why it’s important.
The Cost of Attrition
The first thing that we need to understand is that plastic surgery practices will lose about 80% of their patients over a four-year period if they do nothing. What that means is that of the people coming into your practice, 80% or more will not come back after a four-year period. So they may stick with you for a year or two. Year one, you might lose 20%, 30%.
If in your practice you add about 100 new patients a month and you lose 80 of them, 80 of them never come back, it would be very, very hard for you to grow your practice.
It means that you’re fighting for new patients every single month because you don’t have the advantage of predictable income and having them come back to your practice.
The Importance of Customer Experience
89% of consumers in the US start doing business with competitors after having a poor customer experience. All right, so if your staff is making mistakes, if your staff is not treating people right, that is probably one of the biggest reasons why people will go to your competitor.
An estimated 83 billion is lost each year due to poor customer experience and customer attrition.
So this is a big problem across multiple businesses, which is why, if you can take care of this, you will have an unfair advantage over your competitors.
Compounding Revenue
If you manage to keep those 20 additional patients, what happens is that you start to get compounding revenue. You’ve got the revenue coming in from new patients, and then you’ve got the returning revenue. And the same as it would in a bank, like compounding interest, you get more the year after the year that you’ve collected the interest, it’s the same with this.
The Zagarnik Effect
I want to teach you about something called the Zagarnik effect. And what the Zagarnik effect is, is a mechanism in the brain that keeps you from burning the house down, and I’ll get into that in just a little bit.
It’s a mechanism in the brain that helps you to recall unfinished tasks.
In marketing, we take advantage of that effect.
Practical Retention Strategies
So what can you do in your business? Very simply, you could copy the ice cream shop. You could set up some sort of loyalty program that when people have gotten their Botox or a certain number of Juvederm syringes or laser treatments, cool sculpting cycles, whatever it might be, you can take advantage of the Zagarnik effect by putting people on a journey.
Reactivation of Past Patients
Reactivation is crucially important. Once you start tracking, right, tracking is the number one, start tracking your patients, see when they come back, look for the patterns, identify the ones that haven’t and send out reactivation sequences.
Conclusion
If you can take care of this seemingly very boring topic, it can exponentially increase the growth of your business, and that stability and that free money that keeps coming back will let you advertise more aggressively and put your competitors where they belong, which is in your rearview mirror. I’m Nick Dimitri. This has been episode number seven. I will see you on the next episode.