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Are You Referral Worthy?

Would you be interested in a fool-proof method of tripling your case acceptance rate?

Based on research conducted with one of our featured providers, PatientPlus has calculated that patients referred to a practice by other patients were three times more likely to proceed with a recommended course of treatment.

Three times more likely!

Research from other industries echoes these findings:

  • Referred customers generate 16% more in profits than customers obtained by other marketing channels. And the ROI (return on investment) for referral programs is about 60%. [Harvard Business Review]
  • Word of mouth is the primary factor behind up to 50% of all purchase decisions. [McKinsey]
  • Patients referred by other patients have a 37% higher retention rate. [Nielsen]
  • 92% of consumers trust recommendations that come from people they know more than they trust advertising. [Nielsen]

So, would you be interested in finding a source of new patients without any spending on advertising or marketing?

The answer is hidden in these folders:

A lot has been written about the value of new patient referrals. This article (part 1) will focus on the how's and why's of patient referrals. Part 2 will focus on creative ways you can stimulate referrals from your existing patients. Some ideas in this article are borrowed from other businesses and professional service disciplines, but the underlying concepts are similar for medical practices.

Making It Easy to Be Referred

Referrals are a powerful and important part of your marketing efforts.

When you can crack the code that makes patients refer their friends, the growth potential for your practice is greater.

In “Referral Engine”, author John Jantsch talks about the psychological underpinnings of why people make referrals. “We register pleasure in doing good and being recognized for it, and it’s home to the need to belong to something greater than ourselves,” says Jantsch. “This is the social drive for making referrals.”

There are benefits of word-of-mouth marketing, but there are also unique risks. According to Ivan Misner founder of BNI - Business Network International, one of the largest international business networking groups, “when you give a referral you give a little piece of your reputation away. If the business you've referred someone does a good job it helps your reputation. But if it (the business) does a poor job, your invitation maybe hurt.”

This insight is useful when you consider asking for referrals from your patient’s point of view. If a friends, co-workers or family member asks your patient for a recommendation, their reputation is on the line, not yours.

Accordingly, your patient is unlikely to refer you to their “network” unless their experience with your practice has been a grand-slam, “out of the park” home run.

This is why it's so important to focus on a superior patient experience in your practice.

The first rule of getting referrals: closely examine every aspect of your current patient experience. Are your patients getting that 9/10 or 10/10 experience that results in a natural referral?

The Psychology of Referrals

According to a marketing survey conducted by Texas Tech, 83% of satisfied customers are willing to refer products and services. But, only 29% actually do.

Why do 1:3 happy patients want to give you a referral? The answer can be found in social science. The term ‘reciprocal altruism’ is a fancy term that describes the behavior of “human back scratching”. When someone does something that benefits you, you start to like and trust that person. You’ll also feel motivated to return the favor by doing things that benefit them—or in technical terms, to “reciprocate” their “altruism”.

People like, trust, and are nice to people who are nice to them. People tend to avoid people that are indifferent or don’t return the sentiment.

In the diagram, think of the “favor” as a great patient experience and outcome. In a sense, when you deliver an outcome beyond the patient’s expectation, the patient can feel a sense of obligation: a ‘favor’. This is perhaps the best argument for a relentless focus on superior patient experience: delighting a patient in delivering far beyond their expectations creates a sense of obligation that can be reciprocated with referrals and reviews.

Research shows that people show reciprocal altruism even when they are not consciously aware of doing so—and even when they are actually trying very hard not to! (That’s one of the drivers governing ethical standards against fee splitting or other referral fees.)

To leverage the concept of reciprocal altruism to get more referrals, many marketing experts suggest that the best time to ask a patient for a referral is immediately after a successful treatment regimen. This is a powerful inflection point, when the patient’s satisfaction level is highest and they are most likely to reciprocate.

  1. Compliment & reaffirm the patients’ good results:
    “Those results are great.”
    “It looks like you had a terrific outcome.”

  2. Pivot to Reciprocity
    “We’re always looking to help others with similar cases.”
    “Do you know anyone else who might benefit from Dr. _______?”

  3. Make it Smooth, Seamless and Rewarding
    “Here’s a special card with our unlisted referral phone line. Any new patient you refer gets a free ________. And you will earn _________ as our thank you.”
    “Click on this link to share your outcome with someone you know.”

PatientPlus is building an internal referral platform that notifies patients of their positive clinical outcomes, then allows the patient to broadcast those results to their own network (social media or email). Best of all, the system then tracks new patient referrals as a result of those actions and provides certain rewards/recognition to the existing patient.

In our next post we'll cover some of the ways you can seamlessly ask for patient referrals. 

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Do Doctors Hate Selling?

One of the greatest medical mysteries of our time is the aversion doctors have toward selling.
Doctors “sell” all the time, but they hate “selling”.

Yet without selling the practice fails to grow. Payrolls can't be met. Services can't be delivered. Patients won’t get well.

What’s the disconnect?

In his 2015 book entitled “Adversaries Into Allies: Master the Art of Ultimate Influence”, sales guru Bob Burg argues that effective selling “... is about moving others to accept our ideas whether we’re deciding which movie to see with a friend, selling our product to a new prospect, or trying to get a better service from a difficult rep, we are selling on a constant basis.”

Effective doctors understand this. They ‘sell’ everyday. They persuade patients to comply with drug regimens. They convinced obese overweight patients on the importance of exercise. They nudge without needling.

The best doctors use a full repertoire of sales tactics (stagecraft) to effect good patient health.

  • Professional demeanor
  • Intimidation
  • Cold rationality
  • Good, ol’ fashioned guilt

When dealing with patient behaviors, a great doctor pulls out the stops. She truly believes in the ‘product’ she is selling.The conviction and confidence of her sales pitch comes through and can literally save a patient's life.

However when it comes to transactions that involve money, using any such tactics suddenly seems unethical. A medical device, a surgery, a treatment regimen can be absolutely necessary and highly efficacious, yet the doctor is reluctant to use those same powers of persuasion since he is the one that will get paid.

The issue is especially important for dentists, since 74 million US patients are not covered by insurance. So, as a matter of survival, dentists need to learn how to convince patients to obtain the necessary treatments they require, when no third party is paying the bill.


The Three E’s of Selling Dentistry

In her 2014 ebook, Selling Dentistry, author Janet Hagerman describes the three essential elements of ethical selling.

The first “E” is for ethics: treatments must be clinically indicated, objectively supported with documented examination findings, radiographs, periodontal screenings and other concrete diagnostic tools.

Hagerman’s second “E”, is being Effective.

As she explains:

“The difference between selling and educating is that the very definition of selling results in a specific action of Acceptance in exchange for monetary compensation. We can educate and motivate all day long, but how effective are we if our patient does not say yes to recommended treatment?”

In other words, monetary compensation does not necessarily undermine medical judgment or ethics. In fact, it can be argued that, for clinically indicated treatments, case acceptance and physician compensation is a fair and justified reward for good patient health.

Finally, Hagerman argues that the third “E” stands for “elegance”

“Sales skills will never be effective if they seem contrived forced awkward or fake. To be successful your approach must be genuine and confident yet calm and reassuring.”


Improving Your Selling Skills

As the publisher of Modern Healthcare magazine for more than 30 years, Chuck Lauer has spent a generation observing changes in the medical industry.

“Physicians are in a great position to sell... but it's not so easy to be successful.. it's much harder than it looks”

While some people think physicians are not natural born salespeople, they do have some great qualities that sales make people successful.

  1. Excellent listening skills
  2. Superior intelligence, especially deductive and inductive reasoning to diagnose medical conditions.
  3. Confidence
  4. A caring, empathetic attitude
  5. Ego: a desire to achieve

Well these skills are necessary to be a great salesperson, they are insufficient if they are accompanied with off-putting personality traits that alienate patients.

Finally the most important aspect of selling is actually closing the sale. This can be quite challenging even for sales people with years of experience. You have to get the patient to agree to treatment. So you need to understand how to cure that universal patient condition, cold feet.


Patient-to-Patient Selling

A relatively new phenomenon of selling is employing social networks where patients convince other patients through word-of-mouth endorsement.

This is the most powerful form of selling and it can be influenced and managed. In fact, PatientPlus is developing systems that accelerate the referrals, making it easier for enthusiastic patients to connect with your practice, and rewarding them when they do so.

Most doctors recognize the power of an online review to influence patient behavior. A bad review is likely to cause an otherwise strong referral from calling for an appointment. In fact 75% of patients surveyed said as much.

What about the good reviews? How can a good review turn into more new patients?

In a 2003 Harvard Business Review article, researcher Fred Reichheld established the concept of a net promoter: how many people would willingly promote -- minus those that may possibly detract from -- your practice. The “net” difference is an indication of the relative satisfaction of your customers.

Interestingly, if patients are asked a single question about their satisfaction with your practice, on a scale from 1 to 10, anyone who gives you a score of less than 7 is likely a detractor. Tough crowd.

These patients are not particularly thrilled by your service and in all likelihood they will not visit again. Further, they may damage your practice reputation through negative word of mouth.

In fact, you need to achieve a score of 9/10 or 10/10 before patients will become truly enthusiastic promoters of your practice.

These net promoters are not just the ones that leave you a 5-star review. These are the ambassadors that can absolutely grow your practice with positive word-of-mouth.


This is perhaps the best argument for embracing salesmanship in the practice of medicine. As an effective salesperson, you create more satisfied patients. And, in turn, you create passionate, enthusiastic sales people who can grow your practice.

Even better, our own audits of procedure revenue versus the marketing channel (source) of new patients found a remarkable statistic: patients who are referred by other patients are three times more likely to accept cases versus patients won from the internet.

In summary, being a good salesperson makes you a better doctor. So long as your clinical recommendations are sound, selling helps patients get better.

Further, by making those patients healthier, you are recruiting a new generation of salespeople. And the patients they bring in will be pre-sold on your clinical recommendations.

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Are you interested in a new platform that helps you recommend necessary procedures without giving patients the "hard sell"? Click here for a demo of the PatientPlus system.