After many years in business, I have found one thing to be true – Business is hard and it doesn’t’ seem to get easier regardless of how long you have been in business. Experienced and novice business owners both seem to struggle with operating a profitable practice and then staying on track once you discover what you have to do to make or maintain profitability.
Knowing and evaluating business metrics is critical for making quick decisions. I recently made a bad decision to lower prices because of my fear of losing patients to third party payers. That decision cost me tens of thousands of dollars in a short period of time.
I know every business owner has a lot to do but tracking key business metrics is the Number One Key to Success in Business.
Tracking Your Business Metrics
There are so many things to monitor – Gross revenue, net revenue, % of sales from new patients, % of sales from current patients, return for credit, cost of goods, and so much more.
So… what is the most important thing to track?
I know I sound like a broken record, but if there is one key thing to pay very close attention to it’s the Help Rate of every professional in the practice.
A Help Rate represents the number of patients that you were successful in convincing to get Help for their hearing loss. This ratio is determined by dividing the number of patients who purchased hearing aids by the total number of patients who were tested and needed hearing aids.
Most of my colleagues insist their Help Rate is 90% or better, but industry trends suggest very different findings. I have read that the typical Help Rate of a professional in this industry is less than 50%. This would suggest that hearing health professionals THINK they are better at convincing patients to purchase aids than they actually are.
There is some interesting new data coming out from the latest MarkeTrak study that supports the fact that most patients wait years after their initial diagnosis and recommendation before moving forward with amplification. This information supports the contention that most professionals don’t convince patients to get hearing aids at the time of their initial diagnosis.
Impact of Help Rate on Business
Help Rate can have a huge impact on a business. Think of how much it costs to bring a new patient in the door. It’s usually hundreds of dollars for each new patient and consider the potential revenue the practice is losing when a patient isn’t to get the Help they need.
This statistic is simple to track and can be as elementary as keeping a piece of paper marked with two columns – One entitled Needed Help and the other with Received Help.
Before calculating a valid Help Rate, it will be necessary to establish a hard and solid definition of a hearing aid candidate and then to stick to that definition for every patient. Most established practices will include current patients that have hearing aids that are a certain age in this definition. For instance, we include patients that have hearing aids four years old or older in our definition of a candidate.
Regardless of the description, just stick to it and start tracking. I can assure you probably be surprised at the results.
Numbers tell the story of whether a business is growing or dying. Tracking your Help Rate is a simple and effective way to determine the difference. Once you know it, you can work on improving it and tracking and improving your Help Rate is the Number One Key to Success in a hearing healthcare business.
Gyl Kasewurm, AuD, has owned and operated Professional Hearing Services (PHS) in Saint Joseph, Michigan for many years. The practice is known as a benchmark for the patient experience across the country. Dr Kasewurm has a Master’s Degree from Western Michigan University and went on to receive her Doctorate in Audiology from Central Michigan University. Kasewurm served on the Executive Board of the American Academy of Audiology for five years and is a Past President of the Michigan Academy of Audiology. Dr. Kasewurm has earned many awards and honors including a Distinguished Achievement Award from the American Academy of Audiology but is most proud of the Leadership Award that was bestowed upon her by her local Chamber of Commerce. She was also recently honored as a Distinguished Alumnus by the Health and Human Services Department at Western Michigan University, an honor only bestowed on 98 of 17,000 graduates. Dr. Kasewurm is a well-known author and sought after speaker and prides herself on her advice on taking a practice from Fine to Fabulous!