The Golden Rule

"Treat others how you want to be treated."

That's BS.

Okay, before you click off this blog, let me explain. I had lunch with a friend today who just read a management book.

"It was a lot more spiritual than I thought. Compared with a lot of the stuff we talk about, which is more nuts and bolts," he explained.

I wondered if we have been having the same conversations. We certainly do talk nuts and bolts; he does our billing, so it's more like dollars and cents. Our conversations are often practical and technical. But our more memorable conversations, for me at least, get to be a little more big picture, more global.

So, the first quote above was the take home message from the book he read. It might work out well in a spiritual sense and it is a great message. But in business it hasn't worked for us.

My business partner and I started out trying to design our business with that very principal in mind. We designed it the way we would want it to work if we were customers or employees of the company. What we learned, often the proverbial hard way, is that what we like and what motivates us is not always the same as our customers and employees.

Think of it this way. Do you think Ray Kroc wanted a burger? Do you think Henry Ford wanted a Model T? I don't know if they did. But their customers did. They knew their customers.

And that's the key. Know your target audience. Michael Gerber calls it marketing. Others call it market research. But learn all you can about your customers and potential customers, what motivates them, excites them, frightens them and worries them. Learn their hopes, dreams, aspirations and fears. Then address those through your business.

So, instead of "Treat others how you want to be treated." You can "Treat others how they want to be treated!"

It's not about you. It's all about your customer.

Emails & Contact

Right after putting up the last post and mentioning contact with patients and clients to keep your services in their mind and let them know that they matter to you, I stumbled upon this article, It's no LOL: Few US doctors answer e-mails from patients. If you don't use email to correspond with patients, it's worth the read.

On our clinic websites, www.SFPhysicalTherapy.com and www.WestBayPT.com, we have all of our therapists' emails listed. We also put them directly on our business cards, the ones we hand out to patients. It makes for an easy way to interact with patients, send them occasional updates and reminders, and provide them another level of access. The remarkable thing is that it has hardly ever been abused.

And as Dr. Sands puts it in the article, "Any message that takes more than two volleys back and forth should not be done by e-mail." At that point you just pick up the phone or recommend that the patient come in to see you.

If you are not using email to communicate with patients, consider it and maybe run a short pilot. You might be surprised at the results.

Lifetime Market Value

For most healthcare providers, thinking in terms of Lifetime Market Value is new. In a system where everything we do costs money, it is essential to have an understanding of the issues Mr. Straight brings up below.

Lifetime Market Value can be applied to any business, healthcare or otherwise. How many times do you get coffee in a week? I probably buy a coffee 3-4 times a week. I'm simple and only get the cheap, small kind. The coffee costs $1.55 and I also tip the servers. I'm out of town a bit, so let's say I buy my coffee at my favorite store at $1.55 each time, 3 times per week for only 40 weeks out of the year. I'm worth at least $186 per year to the coffee store.

We can complicate things with up-sells and cross-sells, all the tactics they use as a business to get me to spend more money when I'm there, and I often do. My real value might be closer to $250-$300 per year. And I bring friends sometimes or my kids or wife, and even if I'm not the one buying that day, the coffee store still gets their revenue.

And the servers? If I only tip $0.45, the change left over from my coffee purchase each time, then I'm worth at least $54 to them this year, too. And I often leave them more than that.

So, I'm worth a base of at least $350 per year to the coffee store and their employees. But I bring others. I buy a sandwich sometimes. I'll buy my kids a yogurt or milk, or sometimes the fruit salad, which all serve to raise my value to the store. And I'll go there for the next 5 years, as long as my office is where it is. So, I've turned my $1.55 a day habit into a Lifetime Market Value of about $2,000 for this one store. And this started out as only coffee, and the small, cheap one at that.

You can use this type of analysis to take a look at pricing, services offered, how much an average client spends, how many referrals you get from clients, and then make better decisions about where to devote your resources.

A great article that addresses this in the context of customer retention is at http://www.marketingprinciples.com/customer-retention-plan. Staying in touch is a huge step toward retention.

Do the exercise for your practice, whether you are an internal medicine physician, an orthodontist or a podiatrist. Estimate the services you provide to an average patient over the course of treatment or on an annual basis. Multiply by the number of years, recurrences or new care episodes, and then multiply by the number of friends or family they will send to your practice. Now think about what you do to stay in touch with that patient and what you can do to help them recommend you to their friends and family.

Marketing and maintaining contact doesn't have to be expensive, it just needs to be focused.

Please contact me with questions or comments on this or any of the articles at sturdy@rocketmail.com.

What’s a Patient Worth?

I wanted to first thank Jerry and Sturdy for the opportunity to post on their exciting new practice business website.

I’m David Straight, PT and my passion is helping physical therapy private practices with marketing especially through the use of the Internet. My company provides physical therapy private practices with top quality and affordable:
· Websites
· Newsletters
· Survey systems
· Search engine listing
· Pay-per-click advertising
· Corporate identity – logos and stationery

I wanted to talk about a concept that isn’t taught in school and is often overlooked by new practice owners and seasoned PT professionals alike. It is the concept of “lifetime market value”.

Lifetime market value describes the value of a patient or referral source over the lifetime of your business. Let’s think of this concept in terms of a patient. When one patient comes in your door and you see him/her for one course of treatment, you may make, say $800, for the sake of this discussion. If you treat that patient well, exceed their expectations, they may come back to you 3 to 4 times over the lifetime of your business. In essence, that patient is really worth $3200.00. You can quickly see why it is so important to provide the best service possible and the potential rewards for you hard work.

Let’s take the concept a step further. The patient goes back to the doctor and talks you up. That same patient also tells two friends. The lifetime value of that patient could then be worth tens of thousands of dollars.

How does this concept relate to what my company, www.e-rehab.com does? We provide you with a website that will provide a great image of your practice, answers FAQ’s, and describes how patients can benefit from PT. Our newsletter system welcomes patients to the practice even before their initial evaluation and stays in touch with them after discharge.

The Five Second Marketing Plan
If you want to be successful in a service business, here is a marketing plan that is sure to lead to success:
1. Realize that your patients are customers and they have expectations!
2. Exceed those expectations.
3. Look for ways to improve your service every day.

My parting thoughts are that you need to realize the lifetime market value of your customers (your patients), provide great and dynamic customer service, and if you need help using the most powerful communications tool to do this (i.e. the Internet) give me a call.

David Straight, PT, MPT, OCS is the President of www.E-rehab.com. He can be reached at 800-468-5161, email: dave@e-rehab.com or on the web at www.e-rehab.com .

Salary Negotiations—Comparing Apples to Apples

Last week we held a class on finding and interviewing for the right job. We promoted it to students at the local physical therapy programs. The students who attended were sharp and had great questions. We also received very good feedback on the class.

One of the questions we addressed was asking for and negotiating salary. Most advice to business owners is to have the candidate tell you what they think is fair for the position. That's also the same advice given to the candidates. Neither side wants to show their hand. But that is not really where I think most people make their first mistake. I believe they get into trouble before ever even getting to that step by not really knowing what they want and not understanding all the components of an offer.

So, we ran a couple scenarios with our soon to be job seekers. One scenario had a starting salary of $60,000.00 and a very good benefits package. The other had a salary of $65,000.00 and the usual health and standard continuing education benefits. Of course, our clinics offer great benefits, so you know where this is going. The cost to the employer in the higher salary scenario was greater by $3,894.50, and the employee actually got to keep $95.50 less in the higher salary scenario.

When assessing job offers or negotiating pay, make sure you are comparing apples to apples. And, if you are the one offering the salary, educating your candidates in dollars and cents may make very good sense.

Want to see the comparison? It's available on the JDSM website. Whether you are the prospective employer or employee, you won't get a better return on investment.

New Resources Coming

We're working on several projects to get more content up and available for you.

In the meantime, send me an email telling me what you would like to see on this blog and on our website: www.JDSMManagement.com.

The current plan is to add more information from experts in marketing, billing, metrics, entity formation, asset protection and HR. What we need to know is what products will make your life easier? What would you like to see offered to help you run your practice better or make your start up easier?

If you have suggestions or burning questions about your business or practice, please send them along to sturdy@jdsmmanagement.com. I'd love to hear from you.

Goals & Planning

"Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success." -- Pablo Picasso

Starting and Owning a Business—What I Would and Wouldn’t Do Again

I recently received the following request from a person I am mentoring who is starting her own personal training studio: “I’d like to hear about your experiences starting and owning a business—what you would/wouldn’t do again, and what you wish you knew then that you know now.”

That's a great question. I told her so and that I can probably turn it into an article. That's actually one of the things I wish I had known when I started my first, second, third, fourth, fifth and sixth businesses, leverage, or multiplying the power of your work. If you do something, how can you use it in different ways, multiplying its power and effectiveness?

Don’t let the number of businesses scare you off. It’s been a great ride and the businesses didn’t all fail. Three did, two outright and the other just didn’t make enough money to support my partner and me at a time when we both needed the support. Two of them made some money and were sold for a further profit. The sixth was rolled into the seventh when I joined with my current business partner to expand, and after four and a half years we made a conscious decision to learn more and change the seventh from a business that just supported us into one that made an actual profit. Add two more years and that one is now growing and paying us while funding its own further growth. It is also allowing us to start the eighth together and the ninth on my own. It does get a little confusing. And none of this even takes into account the lawn mowing, candy selling, and writing reports with my best friend back in high school.

To read the rest of this article, go to www.JDSMManagement.com.


Sturdy McKee is CEO of san francisco sport and spine physical therapy and JDSM Medical Management. He can be found at www.JDSMManagement.com.

So, You Want To Start Your Own Clinic

So, you want to start your own clinic? You have spent years honing your clinical skills and expertise. Your patients love you and respect the quality of care you provide. Now you’re at a crossroads, seeking more independence to make decisions that affect your patients and that could give you more control over your practice. Or maybe you are just toying with the idea for whatever reason. This is an exciting time! But there are questions and obstacles facing you. What insurance companies do I take? Should I take Medicare? How am I going to turn my satisfied patients into more patients? Where will the referrals come from? What is Excel? Do I incorporate or work as a sole proprietor? This is a time when it’s easy to get carried away with the excitement. You may ignore all the questions. It’s easy to get the cart before the horse.

Create a written plan. Before you run out and get an attorney and incorporate and before you sign a lease, you need to create a written plan. It is vitally important that you create a written business plan. Your plan and timeline for set-up/start up will precede the actual start of your business. So, you'll actually have 2 plans, your start up plan and your business plan. The start up plan will be all the things you need to do before you open your doors for business. The business plan will be your plan for operations for the first 1-5 years.

Fail to plan, plan to fail. It is as simple as that. If you don’t know where you’re going, you’re not likely to get there. And if you think you know where you’re going, but have never been there and leave without a map, you’re not likely to get there in any reasonable time and in the condition you left in. An idea is not enough. Write it down. Your plans should be written and changeable. As you proceed, you will learn new things to add to your plan and you will need to modify, edit and delete portions.

Your start up plan should include all the things you need to do in order to open your doors. In most places you’ll need to obtain a business license. You will want to have a lease, a bank account, billing software or a service, equipment, business cards, stationery and liability insurance to name a few. You will also want to sequence these items with an end goal in mind of opening your doors for business on a specific day.

There are many resources available for writing business plans. There are multiple software packages, books and websites. The critical pieces of your business plan are your:
Vision: Why, Where and What do you want your clinic/business to be?

To read the rest of this article, go to www.JDSMManagement.com.


Sturdy McKee is CEO of san francisco sport and spine physical therapy and JDSM Medical Management. He can be found at www.JDSMManagement.com.