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. 

#  #  #

Comments are closed