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| Dear Friend,
What's a customer or patient really worth to you? A complete answer depends on the concept of "lifetime value".
I’m writing this as I’m waiting for a flu shot at a Costco pharmacy. And waiting. And waiting.
Like a dry cleaner, healthcare providers have to screw up to lose a customer’s loyalty. Dry cleaners know that once they attract a customer, it’s extremely likely that he or she will continue to patronize the store for years unless the dry cleaner does something to wreck the relationship. Like break the buttons on your shirts two weeks in a row.
It’s all about customer satisfaction.
But the larger the organization is, the lower the overall buy in-to customer satisfaction. The more removed someone is from the bottom line, the less the loss of any single customer is perceived to cost him or her. The employee, or so he thinks, will continue to collect a paycheck and, maybe, just maybe, get measured by his “efficiency,” such as, in the case of a chain store pharmacy, the number of pills the employee pushes out the door each month.
Compare a big box pharmacy with one owned by an independent pharmacist. The independent pharmacist knows that she profits from filling more prescriptions but she also knows that without a customer there are no prescriptions to fill. And, very importantly, even at a $13 profit on the average prescription transaction, if the customer has a family of 4 whose scripts she also fills, the customer is worth at least several thousand dollars in profit over a four or five year period.
So what’s this mean for you?
Done right, a customer isn’t a discrete transaction. Instead it’s a long term relationship with a lifetime value. And, it’s the same if your “customer” is a patient, a referral source, or a hospital . . . or anyone or anything else. Appreciate the value of that lifetime relationship. It highlights the essential fact that you can invest far more than you thought in money and in interaction to create and nurture it.
It’s easier for smaller competitors to compete for business that depends on a relationship than it is for larger ones. And, all business depends on relationships. So if your practice or business is small, take advantage of it. Develop deep and lasting relationships.
If you’re the leader of a larger organization, be afraid of what you don’t consider to be your competition. There might be economies of scale in terms of purchasing and administration, but customer service is one at a time. Make sure that your hiring focuses on the skills required for customer satisfaction, train for it, fire for lack of it, and reward those who deliver it, not only for how many pills they push out the door or how many billing units they generate.
I’m still waiting for that flu shot. And I’m about to Google for another pharmacy. |
| | | Business Life in the Time of Coronavirus Mini-Series
The coronavirus crisis caused a short term economic crisis for many medical groups. Our mini-series shows you the way out. Plus, many of the concepts discussed are applicable during both good times and bad.
[If you haven't already seen them, follow this link to watch our entire series.] |
| | Watch Tuesday's video here, or just keep reading below for a revised, more polished transcript:
I want to talk with you today about a very common, self-defeating negotiation error, an error that, unfortunately, medical group leaders make far more often than they should.
Here's how it works:
It basically has to do with you allowing the negotiating rug to be pulled out from under you.
Or even worse, you help the other side pull the rug out from under yourself.
Let's say that you're negotiating for some agreement with a hospital. You've come to terms on some of its provisions, but not on all of them.
Then, the hospital begins putting pressure on you: “We have to have this agreement signed by next Tuesday." Or, "if it's not signed by next Tuesday, we might send this thing out to an RFP”.
Or perhaps you're told things like: “How could you be demanding these points? They're very minor. In fact, it's insulting for you to bring these points up." Or maybe, "the agreement is fine like it is. So why are you just going back and forth on this when we have better things to do? We should be moving forward with the deal.”
But if you bite on one of these, it's like a fish biting on a hook with a nice juicy salmon egg on it. In fact, it's worse than that; it's biting on a shiny lure, there's not even any salmon egg to swallow before you're hooked.
You've basically fallen prey to pressure, to a scare tactic that makes you believe, or rather feel, which is worse than "believing," that you might be losing the deal.
The tactic works even better on you if you have no option to the deal, if you've ignored my longstanding advice to have multiple deals in place so that no one deal is required for your group's continued existence.
Don't fall prey to being divided and separated by yourself. Do you press for provisions that you know you need, or do you cave because the deal is going to be yanked, or so you're being told?
Don't negotiate against yourself.
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| | How to Deploy the Secret Sauce of Opportunistic Strategy
Webinar On Demand
They say that COVID-19 has changed the world, creating the "new normal." Many of your colleagues and many hospital administrators are running scared.
Others, leaders like you, know that crisis means opportunity.
Let me provide you with the strategic tools and insights that you need in order to seize opportunities, whether they’re in the context of your current business relationships, the expansion of your business activities, or the creation of new ventures.
You will learn:
•Defense as a defective default: It’s necessary, but not sufficient.
•Exploiting weakness: Drop the guilt and identify opportunity.
•Flat line negotiation is fatal: Understand its myths and limitations.
•Negotiation reality: Learn to identify and deploy on multiple planes to affect the outcome.
•Maneuver: Harness the power of maneuver, both in overall strategy and in specific negotiation strategy.
Others see a crisis and freeze in fear. Learn how to see the opportunities and obtain the tools to increase your odds of obtaining them.
The price to attend is $479. The cost of not attending is astronomical. |
| | | Wednesday - Why Your Medical Group Might Be Headed Down the Cliff, and How to Stop It - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
You're all set to embark on some new project or endeavor, such as expanding the scope of your medical group’s operations to the neighboring community, or even to a site hundreds of miles away. Great. These are the type of projects that engender excitement, commitment, and passion, as well as bring profit.
But can you pull it off if your practice is built as a metaphorical house of cards? Not a house built on flimflam, but one built of negligence or perhaps indifference, or one bending too far to the will of the crowd.
Growing up in Southern California, I’d see the cliffs rising near vertically above Pacific Coast Highway, running from Santa Monica up towards Pacific Palisades, a towering, sheer face of dirt that year after year, day after day, was slowly giving way. The beautiful homes perched on top were inevitably headed for the slow lane of the highway below.
That's a perfect metaphor for the false belief that there’s a strong foundation holding up the structure of your group. In reality, the truth can be much different.
Consider the group that discovers but it wasn't actually formed as a medical corporation 34 years ago; it was formed as a general business corporation and is engaged in an illegal business operation.
Consider the group with a defective governance system, such as those with fully collaborative decision-making structures.
These and other defects put your group on the same footing as what was once a $20 million mansion, now about to slide over a cliff.
The fortunate thing for medical group leaders, and where the analogy breaks down, is that it's far easier to correct foundational defects in medical group structure, than it is to shore up a house headed down a 200 foot cliff.
Start with a structural audit.
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| | | Listen to the podcast here, or just keep reading for the transcript.
While at a business lunch this past Friday, I couldn't help but notice that the waiters and waitresses at the fancy restaurant were wearing uniforms almost identical to those I wore as a cook at Magic Mountain during the summer of 1976. A top with vertical earth tone stripes over gray pants.
What uniforms are worn by your staff, employees or colleagues? Green scrubs? Dark pinstripe suits? Light khaki pants, blue shirts, and white lab coats?
Uniforms send a message to others. Witness the quintessential example: the police officer. Even security guards and TSA workers don faux police uniforms with iron-on badges to manipulate people into a high degree of compliance.
But a uniform can create tainted uniformity among its wearers, uniformity of thinking and uniformity of action.
Uniformity is a form of compliance imposed on the uniform wearer, too. "You'll wear this uniform because we told you to." Or, even more tribal, "We wear this uniform because that's what we wear."
But uniforms mask individuality and comparison. Just as no two police officers are alike, so too, none of the physicians in your group are identical. Yet, in healthcare, uniforms play no small role in the fact that many refer to their wearers as "providers," and that some claim that providers can easily be replaced, presumably by someone else in scrubs or in khakis, blue shirt, and a lab coat.
How then, do you achieve the balance between the message sent to third parties, which itself must be modulated, and the message sent to your staff?
I don't have the answer. I have the question, which I've now gifted to you.
Certainly, in the context of last Friday's restaurant, the uniform played a role in creating an atmosphere supporting the price point. In the glassed-in kitchen at Magic Mountain, it created the impression that an 18 year-old knew something about food handling safety. Those are not too different from the sorts of messages sent by scrubs or lab coats or blue pinstripe suits.
Yet there's a danger in uniformity in areas requiring creativity or higher-order
decision-making. "We always do it this way," or "That's not my role," or "Stop, doctor, that's the wrong leg!"
The chef at that restaurant was wearing a chef-like jacket over jeans and black cowboy boots. He'd never signal that he's just like anyone else.
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| | | Calibrate Your Compass
Read our exclusive RedPaper to guide you through this evolving situation.
The coronavirus crisis caused a short-term economic crisis for many medical groups. Our RedPaper shows you the way out. Plus, many of the concepts discussed are applicable during both good times and bad.
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| | Help Us Help You With Helpful Content
What tailored content would you most like to see during this
time? How can we focus on solutions to your most pressing strategic concerns?
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| | | | We all hear, and most of us say, that the pace of change in healthcare is quickening. That means that the pace of required decision-making is increasing, too. Unless, that is, you want to take the “default” route. That’s the one is which you let someone else make the decisions that impact you; you’re just along for the ride. Of course, playing a bit part in scripting your own future isn’t the smart route to stardom. But despite your own best intentions, perhaps it’s your medical group’s governance structure that’s holding you back.
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| In fact, it’s very likely that the problem is systemic. The Medical Group Governance Matrix introduces a simple four-quadrant diagnostic tool to help you find out. It then shows you how to use that tool to build your better, more profitable future. Get your free copy Free.
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| | | | Whenever you're ready, here are 4 ways I can help you and your business:
1. Download a copy of The Success Prescription. My book, The Success Prescription provides you with a framework for thinking about your success. Download a copy of The Success Prescription here.
2. Be a guest on “Wisdom. Applied. Podcast.” Although most of my podcasts involve me addressing an important point for your success, I’m always looking for guests who’d like to be interviewed about their personal and professional achievements and the lessons learned. Email me if you’re interested in participating.
3. Book me to speak to your group or organization. I’ve spoken at dozens of medical group, healthcare organization, university-sponsored, and private events on many topics such as The Impending Death of Hospitals, the strategic use of OIG Advisory Opinions, medical group governance, and succeeding at negotiations. For more information about a custom presentation for you, drop us a line.
4. If You’re Not Yet a Client, Engage Me to Represent You. If you’re interested in increasing your profit and managing your risk of loss, email me to connect directly. |
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